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Egypt - A Rising Economy with Promising Potential For Hong Kong Business and Investment

Egypt has maintained high annual growth rate at average 9.7%. *1 Its ranking among the world's top tourism destinations rose from 41 in 1985 to 36 in 1995. The fastest growing sub-group of tourism projects are tourist villages, complexes and entertainment cities. *2 The government plans to support the development of infrastructure in a number of new locations to attract beach tourism. Large-scale tourism developers are increasingly being encouraged to undertake of blocks of seaside lands for which they can provide and operate the infrastructure, plan and commercialize projects for investors.

A good example in this regard is the Riviera Resort; It is a major tourist site to be developed over an area of 7.7 million square meters, south of Taba on the Red Sea extending over 9.2-KM along the Gulf of Aqabah. This project would attract 900,000 visitors by 2005 and 1.3 million by 2010.

Egypt's long term target is to achieve a ten-fold increase by the year 2016 in hotel capacity and tourism revenue. *3

Against this background and the great potential that both Egypt and Hong Kong enjoy, the existing bilateral relations appear to be quite modest.

According to 1999 statistics, total trade was only about USD350 million, including re-exports to Egypt of USD296 million, with USD276 million balance in favor to Hong Kong.

However, some promising indications took place since the handover in 1997. Most important, a mutual visa-free access was put into effect as from December31, 1997.

In 1999, an initial bilateral agreement was signed to extend direct flights between Hong Kong and Egypt. With the final agreement, hopefully to be reached soon, we hope that direct flights will boost trade and tourism exchange.

Lately, the HSBQ Group has increased its shares in the Egyptian British Bank in Cairo, to become 90%. It has decided also to make new investments in Egypt of about USD145 million. *4

This new step reaffirms the confidence and trust of the international financial institutions in the Egyptian economy and its future.

In this context, we hope the forthcoming visit of the Chamber to Egypt, which comes in conjunction with its I 40s Anniversary, will open new windows of cooperation and lay a solid foundation for future prominent trade relations between Hong Kong and Egypt.

In preparation for this visit, you may consider forming a group representing Hong Kong - Egypt businessmen. You may also consider a protocol of cooperation between your distinguished Chamber and the Egyptian Chambers of Commerce Association.

Ladies and Gentlemen, I wish you every success in your endeavors and thank you for your kind attention.

*1  from 1982 (with 1,000,000 visitors) to 1999 (with nearly 5,000,000).

*2  There are now as many as 205 tourist villages and 21 complexes under implementation.

*3  The government has exerted several efforts to develop tourism services, which include improving existing airports and adding new ones.

*4 As the Banking Group has decided to expand its investments in the Egyptian market, the Bank's Board of Directors in the Middle East held its meeting in Cairo last month chaired by Mr. John Bond who met the Prime Minister of Egypt and other high ranking officials in the government and the private sector, to discuss the bank's contribution in the Egyptian economic, monetary and investment plans.

Main References:

• Investment Policy Review "Egypt", UNCTAD, UN, 1999.

• Country Commercial Guide Egypt 2000, Embassy of the USA, Cairo, Egypt.

• General Authority for Investment and the Free Zones (GAFI).

• Egypt Watch Bulletin, Xinua General News Service, September 23, 2000.

• ALAHRAM, November 6, 2000, Cairo, Egypt.

• Time for a new vision for the Middle East, speech delivered by H.E. Amre Moussa, Egyptian Minister of Foreign Affairs, Davos, Switzerland, January 29, 2000.

• Egyptian Economic Bulletin, November 2000.

• The Economist, 23 October 2000.
  
  

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