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Egypt

[Source: NUSACC's U.S.-Arab Trade Outlook 2013]

“Egypt is starting to be perceived as a hub for call centers, and as the best one in Africa,” says Xceed CEO and Chairman Adel Danish. In 2009, global management consulting firm AT Kearney ranked Egypt as the top destination for outsourcing in the Middle East and North Africa (MENA) region. It was the first time Egypt broke into the top ten on AT Kearney’s Global Services Location Index.

According to Dr. Hazem Abdelazim, CEO of Egypt’s Information Technology Industry Development Agency (ITIDA), Egypt has successfully mainstreamed ICT as a part of its national development strategy during the past decade. “We are delighted that our investment in Egypt’s ICT sector and our efforts in promoting Egypt as a leading global outsourcing center have been recognized,” notes Dr. Abdelazim. The National U.S.-Arab Chamber of Commerce signed a Memorandum of Understanding with ITIDA in 2009 with a view to raising Egypt’s profile among U.S. high tech companies.

Despite the global economic downturn, Egypt has seen huge growth in the ICT sector, according to Dr. Abdelazim. Outsourcing generated more than $1 billion in revenues as of May 2010, and the goal is to produce $10 billion in revenues by 2020. Maadi Technology Village in southern Cairo is expected to put Egypt on the map as a pioneer call center. Launched in June 2010, the Village will provide 40,000 new jobs and 100,000 indirect employment opportunities once all four phases are completed by 2014.

Reflecting the gradual resurgence of global trade, Suez Canal tonnage increased by 17.6 percent through November 2010, with transit revenue climbing 12.5 percent during the same period, according to the Suez Canal Authority (SCA). Key services such as tourism and canal fees are major revenue generators in Egypt, as well as a barometer for economic recovery. Analysis produced by Beltone Financial expects canal revenues to reach $4.9 billion in 2010/11, a nine percent increase over 2009-2010 revenues of $4.5 billion.

Egypt’s Tourism Minister, H.E. Zoheir Garranah, predicts 2010 tourism revenues will have grown 17 percent to nearly $13 billion (up from 2009 levels of $10.8 billion). Egypt launched new campaigns to attract 14 million tourists in 2010, up from 12.5 million in 2009. A new partnership formed in 2009 between the city of Luxor, the Egyptian Government, and Microsoft resulted in the first official tourism web portal for Luxor, as well as the first official tourism website in all of Egypt.

According to the Ministry, tourism accounts for approximately 12.6 percent of jobs in Egypt and has grown seven percent annually over the past three years. Leading visitors come from Russia, the UK, Italy, France, Ukraine and Poland. Egypt plans to attract 16 million tourists in 2011, generating $14 billion in revenues. Egypt’s tourism value proposition – combining antiquities with vibrant cities and first-class resorts with close proximity to Europe and the Arab world – has kept FDI flowing steadily into hospitality facilities, with 212,000 hotel rooms under construction that will double existing capacity.

Egypt’s 2010 – 2013 industrial development plan is geared toward establishing new zones in Egypt’s governates with adequate infrastructure, utilities and manufacturing upgrades. The Egyptian Government will grant 12 new licenses for cement plants to meet the sustained construction boom, thus boosting production 40 percent to 80 million tons by 2015. The Government will also offer 12 new steel mill licenses to meet an expected supply shortage of five to six million tons by 2017.

Egypt’s new public-private partnership (PPP) law is targeted to rapidly improve Egypt’s infrastructure in areas such as hospitals, roads, railways, ports and wastewater treatment. After almost two years of preparation, the People’s Assembly ratified the PPP law in mid-May, thereby simplifying the procurement process and providing better transparency.

With more than 80 million people, Egypt is the most populous nation in the Middle East – with massive power requirements. Egypt’s Ministry of Electricity and Energy is requesting bids for eight 125-megawatt power generators as part of that nation’s short-term plan to augment its power-generation capacity by Summer 2011. Medium-term plans include upgrades to turbines in Aswan that will supply an additional 175 megawatt of production, as well as an accelerated launch of a 375-megawatt power plant and enhanced wind turbines.

Egypt’s long-term power plan calls for tripling production from 25 gigawatts to 75 gigawatts by 2027. Major transmission projects include an ambitious $1.5 billion power relay line connecting Egypt to Saudi Arabia. The 1,300-km line, which will be tendered in 2011, will have 3,000 megawatts in carrying capacity. Saudi Arabia will provide two-thirds of the financing. This could facilitate electricity trading between the two countries as early as 2013, according to Saudi Arabia’s Asharq al-Awsat newspaper. In August 2010, President Hosni Mubarak announced that Egypt’s first 900 megawatt nuclear power plant would be built at El Dabaa, on the Mediterranean coast. A tender for the plant, expected to cost $4 billion, is on track for the first quarter of 2011.

As the largest recipient of U.S. security assistance in the Arab world and a major non-NATO ally, Egypt is a critical Arab military ally of the United States. Egypt is a full partner in preserving regional stability, pursuing the peace process, promoting a WMD-free Middle East, and upholding mutual national security interests. In 2010, Egypt’s Foreign Military Sales (FMS) of more than $1 billion focused heavily on enhancing security in the Suez Canal and along the Gaza border.

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