CAIRO: Officially, the theme was trade between Egypt and Germany. A German-Arab commerce group sponsored the talk. Yet there was relatively little mention of Germany.
At a business lunch Tuesday, Trade Minister Rachid Mohamed Rachid outlined broad reforms for the Egyptian economy and fielded questions on topics as diverse as export subsidies, sales tax and regulation of the cement industry.
While the global economy is in recession, Egypt’s will continue to grow through 2009, Rachid said during his address. “I think we will be able to achieve 3 to 4 percent if we look at the calendar year for 2009, he said. “Even if you grow 1, 2 percent, this is an exception in the world today.
In order to sustain this growth, Egypt must focus on developing human resources, infrastructure, and productivity and on decentralizing political power, Rachid said.
The first priority, human resources, is a familiar issue in Egypt. The gap between the skills demanded by a modern economy and those provided by the Egyptian education system is a source of widespread complaint among businessmen here.
But improving human resources should also extend to the public sector, the minister said. “We need badly to improve the quality of our leaders in every part of the government as well as the private sector, he said.
“Who are the top 500 people in this country in the government? What are we doing to ensure these are the right 500 people? he said. “Do we know how to hire them, do we know how to train them, and do we know how to fire them if they don’t perform?
The second priority is infrastructure, Rachid said. Here, private companies should do more, he said, pointing to Orascom Telecom, which has developed infrastructure both in Egypt and other countries.
The third is boosting productivity, Rachid said. “We are not a rich country, but we have the potential to become a rich country, he said. “We need to make it clear in our mind why we are not a rich country. It is because we lack productivity… it is not because there is a conspiracy or a plot by the people around us who would like us to be limited in our resources.
The fourth priority should be to spread political power, giving governors and other local officials more sway.
“Today, as we all know, all the authority and all the power sits with ministries in Cairo, he said. This centralization stymies efficiency and economic growth, he said.
“Governors are always under pressure, but what authority do they have? Almost none.
A list of anonymous questions moderated by Naguib Sawiris, chairman of Orascom Telecom, ranged from hopeful to aggressive. One electronics manufacturer said that he faced “unfair competition from Asian exporters who did not meet Egyptian quality standards, yet still managed to sell in the local market.
Another asked whether Egypt might ever see a governor who is not a general or an ex-general. One question challenged the idea that democracy is necessary to long-term economic growth.
Trade in goods between Germany and Egypt reached nearly ?3.9 billion in 2008, up from about ?2.9 billion in 2007.
While the challenges now faced by the two countries are distinct, they may complement one another, Rachid said. Germany, for instance, must deal with a shrinking labor force and higher production costs, while Egypt faces unemployment, poverty and fast population growth.
“It doesn’t take a genius to see there is a complimentary situation here, Rachid said.
One representative of the German chamber suggested tourism could continue to Egypt despite the recession in Germany. “Vacation is our holy cow, only to be slaughtered in extreme circumstances, he said. “We don’t suffer from extreme circumstances in Germany.