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Since Egypt was swept up in the Arab Spring in 2011, its economy has faced difficult times. On news that the International Monetary Fund approved a $12 billion loan to the government, the Associated Press described the economic straights the most-populous Arab nation faces:
The vital tourism sector dried up over fears of terrorism, overseas remittances dropped because of low oil prices, and Suez Canal revenues diminished because of a decline in global trade. Investment and business activity also stalled, with inflation hitting 14 percent and unemployment 13 percent while the percentage of the unemployed youth is around 30 percent. Nearly half of the population is below poverty line; the budget deficit currently stands at nearly 12 percent of gross domestic product while the current account deficit is at almost 7 percent.
But with struggles comes opportunity.
American businesses have for decades valued Egypt’s market and have a long history of positive contributions to Egypt’s economy. A recent business mission organized by the U.S. Chamber of Commerce’s U.S.-Egypt Business Council was forward-looking – Partnering for Egypt’s Future. With the U.S. being one of Egypt's largest single trading partners with a volume of trade reaching $6.3 billion in 2015, the U.S. Chamber, working in close cooperation with AmCham Egypt and the Egypt-U.S. Business Council, underscored collaboration between both nations’ business communities and governments.
When there are trying economic times, there’s no room to be pessimistic, and the Egyptian government remains positive about improving its economy. “It is no secret that we are going through economic challenges. We are in a bottleneck, and I say a bottleneck because we will get out of it,” said H.E. Tarek Kabil, Minister of Trade and Industry.
The IMF loan helped provide confidence to investors and the business community and help restore economic stability and growth in Egypt. It also puts the Egyptian government in a stronger position in pursuing vital reforms to attract investment, bring about greater fiscal stability and enhance the economy’s competitiveness. The reduction in the energy subsidy is expected to free up money for needed investments in healthcare and infrastructure.
Likewise, the U.S. business community is bullish on Egypt. “American businesses are hopeful for Egypt’s future and confident that its best days are ahead,” said Khush Choksy, senior vice president for Middle East Affairs at the U.S. Chamber. “Two-way trade and investment have brought substantial benefits to both American and Egyptian companies, fostering economic growth and job creation in both countries, and we are excited to have this chance to explore new opportunities in a variety of sectors.”
In fact, U.S. businesses continue to make investments and expand their footprint in Egypt. David Welch, President of International and Government Affairs at Bechtel, described a “good picture” for Egypt’s future and highlighted Bechtel’s work on a major gas processing plant near Alexandria and a significant petrochemical complex in Egypt.
Cisco’s Pastora Valero shared they are “very bold” about digitizing Egypt’s economy and tipped her hat that the company will soon be announcing a direct investment in Egypt to support information and communications technology small- and medium-sized businesses and innovation.
“Our commitment to Egypt is absolute,” asserted Gary McGuigan of ADM which recently deepened its relationship in Egypt through a new joint venture.
Corporate Social Responsibility
Sound economies are more than dollars, cents, and Egyptian pounds. Beyond the major contributions to Egypt’s economy through jobs, investments, and knowledge transfer, American companies doing business in Egypt are making substantial impacts in the local communities where they operate through a variety of corporate social responsibility (CSR) programs and projects. A delegation from the U.S.-Egypt Business Council visited a community school supported by Save the Children Egypt and one of their private sector partners [who?] who support employment options for youth. Here are more examples of CSR projects underway in Egypt by members of the U.S.-Egypt Business Council.
The IMF loan reaffirmed faith in Egypt’s economy. American business now has to build on this development and work to grow and strengthen the U.S.-Egypt economic relationship.