I trust in the abil­ity of Egyp­tian com­pa­nies to get a share of Chi­nese mar­ket: Nas­sar

EX­CHANGE OF PRES­I­DEN­TIAL VIS­ITS BE­TWEEN EGYPT, CHINA IS GREAT PROOF OF STRENGTH OF THEIR BI­LAT­ERAL RE­LA­TIONS

The Daily News Egypt - - Front Page - By Nevine Kamel –Shang­hai

WE DE­CIDED TO START TAR­GET­ING AFRICA THROUGH A LIST OF 10 COUN­TRIES AS AN INI­TIAL STAGE TO ACHIEVE MORE POS­I­TIVE RE­SULTS

FOR­MA­TION OF AN IMA TEAM TO SOLVE THE PROB­LEMS OF THE FALTERING FAC­TO­RIES WITH­OUT OB­TAIN­ING THE SUP­PORT OF CBE

Four months after he as­sumed of­fice, Min­is­ter of Trade and In­dus­try, Amr Nas­sar’s ap­proach be­came more ob­vi­ous: fo­cus on ex­ploit­ing the avail­able re­sources in­ter­nally, and in­ten­sify the do­mes­tic in­dus­try in or­der to boost in­dus­trial growth and in­crease the lo­cal prod­uct’s com­pet­i­tive­ness. Nevine Kamel met with the min­is­ter in Shang­hai dur­ing the open­ing of the China In­ter­na­tional Im­port Expo be­tween 5 and 10 Novem­ber, the tran­script for which is below, lightly edited for clar­ity:

Egypt is cur­rently par­tic­i­pat­ing in the first China In­ter­na­tional Im­port Expo and has been se­lected as a guest of hon­our from among 10 other coun­tries, with ap­prox­i­mately 150 coun­tries par­tic­i­pat­ing in the ex­hi­bi­tion.

What is the sig­nif­i­cance of Egypt’s spe­cial pres­ence of in this ex­hi­bi­tion?

For the very first time, there is a Chi­nese im­ports ex­hi­bi­tion, whereas we al­ways talk about im­ports from China. China’s im­port ex­hi­bi­tion is new, and re­flects sev­eral as­pects: the be­gin­ning of China’s pas­sage­way to the world. This is be­cause China’s so­cial level has im­proved, and in­come is ris­ing ow­ing to its eco­nomic up­surge. Hence, the de­ci­sion was taken to start im­port­ing, which is a new ap­proach to China’s in­ter­na­tional pol­icy.The fact that Egypt is par­tic­i­pat­ing in this ex­hi­bi­tion is nor­mal, be­cause China’s mar­ket size is a huge op­por­tu­nity for any coun­try. If any coun­try suc­ceeds in gain­ing a share in this mar­ket—even up to half a per­cent of it— then we have suc­ceeded in achiev­ing a real in­crease in ex­ports, es­pe­cially with the coun­try’s sub­stan­tial pop­u­la­tion, es­ti­mated at 1.5 bil­lion. Egypt has an ex­cel­lent chance of get­ting a share in this mar­ket, but it is re­lated to the pro­duc­ers’ abil­i­ties and their ef­forts in achiev­ing this. I am con­fi­dent in their abil­ity to suc­ceed in this task, due to the qual­ity and com­pet­i­tive­ness of the Egyp­tian prod­uct. In short, Egypt’s choice as a guest of hon­our re­flects its po­lit­i­cal and eco­nomic value on the ground, the am­i­ca­ble re­la­tion­ship be­tween Egypt and China, and the prospects for pos­i­tive eco­nomic co­op­er­a­tion be­tween the two sides.

What is the im­por­tance of the Chi­nese mar­ket for Egypt cur­rently, and how is our in­ter­est in this mar­ket re­flected presently?

The Min­istry of Trade and In­dus­try af­fords im­mense im­por­tance to­wards sup­port­ing the Egyp­tian-Chi­nese re­la­tions, es­pe­cially as the com­mer­cial co­op­er­a­tion and in­dus­trial in­vest­ments be­tween Egypt and China con­sti­tute an in­trin­sic foun­da­tion in the joint re­la­tions be­tween both coun­tries. There­fore, the min­istry, in co­op­er­a­tion with the Min­istry of In­vest­ment and In­ter­na­tional Co­op­er­a­tion, is co­or­di­nat­ing with all rel­e­vant min­istries to en­hance co­op­er­a­tion with the Chi­nese side, es­pe­cially con­cern­ing pri­or­ity projects agreed upon be­tween the two coun­tries in the scheme of the tech­ni­cal com­mit­tee to in­crease pro­duc­tion ca­pac­i­ties— an im­por­tant in­stru­ment to­wards sup­port­ing Egyp­tian-Chi­nese in­vest­ments. The ex­change of pres­i­den­tial vis­its be­tween Egypt and China is a great proof of the strength of their bi­lat­eral re­la­tions and their de­sire to de­velop this re­la­tion­ship. These vis­its have re­sulted in re­mark­able out­comes and helped to de­velop the joint re­la­tions be­tween the two coun­tries in var­i­ous fields, in­clud­ing trade and in­vest­ment. In terms of trade, Egypt started to di­rect more ex­ports to­wards the Chi­nese mar­ket, es­pe­cially Egyp­tian ex­ports of agri­cul­tural crops, where many steps were taken to en­able Egyp­tian agri­cul­tural crops more ac­ces­si­ble to the Chi­nese mar­ket. In Novem­ber 2017, grapes be­came the se­cond Egyp­tian agri­cul­tural crops after cit­rus to en­ter the Chi­nese mar­ket as a re­sult of sign­ing a co­op­er­a­tion pro­to­col be­tween the two coun­tries. Egypt’s cit­rus ex­ports to China wit­nessed a con­sid­er­able de­vel­op­ment last year, ris­ing from $23m in 2016 to $78.3m in 2017, an in­crease of 240%,a sig­nif­i­cant in­crease re­flect­ing the sta­tus of Egyp­tian cit­rus in the Chi­nese mar­ket, and it pro­vided an op­por­tu­nity for fur­ther ex­ports of other Egyp­tian agri­cul­tural crops into the Chi­nese mar­ket. Fur­ther ex­ports of Egyp­tian agri­cul­tural crops are ex­pected to en­ter the Chi­nese mar­ket dur­ing the com­ing pe­riod, es­pe­cially from dates,

China is not the only des­ti­na­tion for the Egyp­tian govern­ment now, there is also a spe­cial ap­proach to­wards Africa. What is the sig­nif­i­cance of this long-ne­glected mar­ket for Egypt?

We look at Africa with a lens dif­fer­ent from all the other world coun­tries.We view it as a part­ner with whom we share our ex­pe­ri­ences, not just as a mar­ket we want to sell or ex­port to ,or as a source of raw ma­te­rial.We aim to co­op­er­ate with African part­ners in a mu­tu­ally ben­e­fi­cial man­ner.Why not man­u­fac­ture their raw ma­te­ri­als through Egyp­tian fac­to­ries and in­vest­ments? This is an ideal form of co­op­er­a­tion be­tween the two sides, and this is what we are aim­ing for.We want to de­liver a mes­sage to the en­tire world, that those who want to in­vest in Africa will only do so through us. Egypt will be the strong and sta­ble gate­way into Africa for the com­ing pe­riod. Here, I should highlight the im­por­tance of en­hanc­ing the role of the Egyp­tian and African pri­vate sec­tor in play­ing an ac­tive role to­wards de­vel­op­ing the for­eign trade op­er­a­tions, and at­tract­ing more Arab and for­eign cap­i­tal to in­vest in both Egypt and African coun­tries, as well as the need to move from bi­lat­eral co­op­er­a­tion to be­gin ac­tive con­ti­nen­tal co­op­er­a­tion. The con­ti­nen­tal free trade area of the three ma­jor African blocs, with a pur­chas­ing power ex­ceed­ing $1.3tn, is ex­pected to con­trib­ute sig­nif­i­cantly to­wards boost­ing eco­nomic co­op­er­a­tion among a large num­ber of African coun­tries as the first phase of the Com­pre­hen­sive African Free Trade Area, es­pe­cially with the pos­si­bil­ity of im­ple­ment­ing joint Egyp­tian in­dus­trial projects in the fields of trans­port, lo­gis­tics, in­fra­struc­ture, and elec­tric­ity, ma­jor projects, food, en­gi­neer­ing and leather in­dus­tries. In this con­text, we de­cided to head into Africa through a group of African coun­tries in the East and West, ini­tially reach­ing 10 coun­tries, in­stead of work­ing on 40 coun­tries.We will work on 10 coun­tries si­mul­ta­ne­ously. Africa has tremen­dous un­tapped wealth. In recog­ni­tion of Africa’s im­por­tance, we will host three events in Africa in December, the African In­vest­ment Con­fer­ence from 8-9 December, the In­ter-African Trade Fair from 11 to 17 December, and the African Trade Min­is­ters Con­fer­ence in Egypt on 12 and 13 December. At the end of the events, Egypt will start the new year with the chair­man­ship of the African Union headed by Pres­i­dent Al-Sisi.

The Min­istry of Trade and In­dus­try has adopted a new in­dus­trial ap­proach, what is the most im­por­tant pro­gramme of this ap­proach and what has been achieved in this re­gard?

The min­istry’s plan dur­ing the last pe­riod tar­geted a num­ber of axes, the most im­por­tant of which is to ex­ploit the ex­ist­ing ca­pac­i­ties in the cur­rent fac­to­ries ,be­fore ex­pand­ing and es­tab­lish­ing new fac­to­ries. If I want to achieve rapid in­dus­trial growth, I must fo­cus on what I have in a man­ner which achieves the best re­sults. While I was in China, I met with a Chi­nese com­pany that was run­ning 3 shifts and a half, and that is what we are try­ing to fol­low, be­fore ex­pand­ing any new plants. How­ever, that does not mean we will not de­velop new fac­to­ries. Iden­ti­fy­ing in­dus­tries that can be com­pet­i­tive is also in one of our new ap­proaches. It is im­pos­si­ble to man­u­fac­ture ev­ery­thing, but the main ob­jec­tive is to iden­tify the coun­try’s avail­able re­sources and to ex­ploit them ap­pro­pri­ately.

Re­gard­ing the ex­port sec­tor, what are the cur­rent chal­lenges fac­ing it and how does the min­istry ad­dress them?

Be­fore I men­tion the chal­lenges, I want to talk at the out­set about some im­por­tant points that we are fo­cus­ing on in or­der to boost ex­ports.We cur­rently fo­cus on two points: Egyp­tian prod­ucts with a com­pet­i­tive ad­van­tage, and the most at­trac­tive mar­kets for Egyp­tian prod­ucts. This is what we are try­ing to fo­cus on to demon­strate the re­sult of our tar­get.The min­istry then iden­ti­fied ex­port sec­tors in which Egypt has fine ex­pe­ri­ence, as well as mar­kets which can be opened soon.The tar­get mar­kets are con­cen­trated in 3 re­gions, Africa in the first place, and these mar­kets are also look­ing for in­dus­tri­al­i­sa­tion, so we sug­gested ex­port­ing ma­te­ri­als that will help African coun­tries in the man­u­fac­tur­ing process, which helps us to pen­e­trate them even more. After that, the coun­tries of Cen­tral Asia and then some of the coun­tries of Eastern Europe, are coun­tries that want pre­mium prod­ucts at rea­son­able prices. That does not mean that we ex­port to Europe.We have very im­por­tant ex­ports, but we are talk­ing here about the re­gions that are rapidly con­tribut­ing to the ex­port value. The real chal­lenges we face are the fierce com­pe­ti­tion from ex­porters play­ing at the same level—China, In­dia, Tur­key, and Morocco. This is a very stiff chal­lenge, as the ex­ports sub­sidy they re­ceive from gov­ern­ments are very high, which places Egyp­tian ex­ports in the mid­dle of a very strong com­pet­i­tive mar­ket.

What about Egyp­tian ex­port sub­si­dies, what is our po­si­tion on pay­ing ar­rears so far?

The prob­lem with ex­port sub­si­dies is that with the flota­tion of the pound, some of the ar­rears dou­bled in value, thereby in­creas­ing the value of ar­rears. Mean­while, the al­lo­ca­tions for the sub­si­dies have not in­creased, there­fore their value have been halved for ex­porters. We are try­ing with the state to re­fund ar­rears as soon as pos­si­ble in or­der to en­cour­age ex­porters, and to in­crease their abil­ity to com­pete with ex­ter­nal prod­ucts. This is one of my tasks and the coun­try has shown its full readi­ness to pay, and is ex­pected to do so as soon as pos­si­ble be­cause ex­port sub­si­dies are part of ba­sic ex­port in­cen­tives. The min­istry is cur­rently work­ing to solve ex­porters’ prob­lems, and de­lay the se­ri­ous de­lay of ex­port sub­si­dies be­cause this prob­lem rep­re­sents a nega­tive point for in­vest­ments, not only for ex­ports.

What about faltering fac­to­ries? Shouldn’t this file be re­solved to boost con­fi­dence?

The dis­tressed fac­to­ries’ file is a com­plex one. If we an­a­lyse these fac­to­ries, we find that the rea­sons for the fail­ure of each group of them is dif­fer­ent from the other. Most of them have de­faulted fi­nan­cially; while oth­ers con­ducted wrong fea­si­bil­ity stud­ies. This was the rea­son for the loss of money, and if we solve the prob­lem and give them money, they will lose it again. A third group has a man­age­ment prob­lem, and if we ex­clude these cases, the re­main­ing num­ber will be very few. This re­main­ing group, the min­istry is work­ing with them to form a team of the In­dus­trial Mod­ern­iza­tion Cen­tre (IMC) which is work­ing to solve their prob­lems, but with­out the sup­port of the Cen­tral Bank of Egypt (CBE).

What is the Min­istry’s plan to push in­dus­trial growth in the com­ing pe­riod?

The state fo­cuses heav­ily on in­dus­tries that have high added val­ues.We do not want to cre­ate a prod­uct where most of its raw ma­te­ri­als are im­ported, and this is clear to us as we an­a­lyse the in­dus­trial sec­tor with the Min­is­ter of Plan­ning and the Min­is­ter of Fi­nance.We are not a rich coun­try and if we have bet­ter re­sources, we should give them to sec­tors that rely more on do­mes­tic prod­ucts, and then en­cour­age lo­cal in­dus­tries. Hence the im­por­tance of the min­istry’s fo­cus on the in­dus­trial in­ten­si­fi­ca­tion pro­gramme, which aims to in­crease pro­duc­tion in­puts with good added value in Egypt. This is aimed at re­duc­ing the im­port bill, as the pro­por­tion of im­ports of com­po­nents alone reaches 40%, and if we can re­duce this ,it will make an enor­mous dif­fer­ence in the trade deficit.

For ex­hi­bi­tions, does the min­istry con­sider par­tic­i­pat­ing in in­ter­na­tional ex­hi­bi­tions to con­trib­ute to in­creas­ing ex­ports?

For ex­hi­bi­tions, we are in­ter­ested in choos­ing to par­tic­i­pate in those that our customers par­tic­i­pate in, and there­fore not all in­ter­na­tional ex­hi­bi­tions are im­por­tant to us. To­day’s ex­hi­bi­tions, with e-com­merce, are no longer the only way to in­crease ex­ports.The is­sue is com­plex, but with the Ex­port De­vel­op­ment Author­ity (EDA), we want to put in place a plan that will make us be­come more ef­fec­tive. Hence, we aim to at­tract some in­ter­na­tional ex­hi­bi­tions into Egypt in the com­ing pe­riod. Thus ,we al­low the par­tic­i­pa­tion of a larger num­ber of ex­hibitors who do not have the pos­si­bil­ity to par­tic­i­pate ex­ter­nally, and on the other hand, we al­low the re­vi­tal­i­sa­tion of tourism. There are ne­go­ti­a­tions with some coun­tries and in­ter­na­tional ex­hi­bi­tions such as Big Five, In­ter Tabac in Ger­many, and Pre­mier vi­sion to at­tract their ex­hi­bi­tions into Egypt. This is the pol­icy of ex­hi­bi­tion’s new di­rec­tion in the com­ing pe­riod.We have the in­fra­struc­ture which al­lows us to host these ex­hi­bi­tions, such asAl Ma­narah Con­fer­ence Hall and Sharm El Sheikh Hall. We want to tap what it avail­able.

If we talk about the Free Trade Agree­ment (FTA) with Tur­key, what is the cur­rent po­si­tion of the Min­istry of this con­ven­tion?

The FTA with Tur­key, like all FTAs, is pe­ri­od­i­cally re­viewed and has no ex­cep­tional sta­tus.The FTA with Tur­key is cur­rently be­ing eval­u­ated, and, ac­cord­ing to the re­sults, our po­si­tion will be de­ter­mined. If it is in the in­ter­est of Egypt, we will not ap­proach them.To say, if it could at­tract 10 times the Turk­ish in­vest­ment to Egypt, I would not be de­terred from do­ing so. Trade has no di­rect re­la­tion­ship to pol­i­tics.

Min­is­ter of Trade and In­dus­try, Amr Nas­sar

Min­is­ter of Trade and In­dus­try, Amr Nas­sar with DNE’s Nevine Kamel

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