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BDI President Keitel in Egypt

German industry wants to support Egyptian business

09/04/2011

During his trip in Egypt BDI President Hans-Peter Keitel confirmed that German industry would support Egypt.

During the first trip of a European industrial association after the political upheavels in Egypt BDI President Hans-Peter Keitel confirmed that German industry would support Egypt. Prof. Keitel called on the political actors of the country to pay attention to the importance of economic freedom for future prosperity and of promoting local entrepreneurship.

"German industry is willing to invest more in Egypt if the framework conditions are reliable," the BDI President said in Cairo on Saturday. The country is currently in a difficult phase of the transformation process. Although Egypt has been opening up the economy step-by-step since 2000 it has not succeeded in acheiving wide-based economic growth and boosting employment – despite an annual increase of an average 6.2 percent in gross domestic product during the past five years.

"Without free entrepreneurship there can be no economic prosperity, political freedom will remain fragile," said Prof. Keitel.

During his visit to Cairo on 9 and 10 April Prof. Keitel met with Amr Moussa, Secretary-General of the Arab League, Minister of Industry Ali Al-Sayiad and Minister of Energy Hassan Ahmed Younes, amongst others, to discuss the progress of the transformation process and the Egyptian government's economic and industrial plans. The BDI plans to enhance its economic cooperation with Egypt.

Facts about Egypt

Overall economic development

  1. During the past five years Egypt's gross domestic product (GDP) has risen by an annual average of 6.2 percent – also in 2009 (plus 4.7 percent despite the global economic crisis).
  2. Thanks to the reform-oriented economic policy, foreign direct investment increased by 20 billion USD in 2000 to 66.7 billion USD in 2009.
  3. The political upheavels make forecasting difficult. After production dropped to 20 percent in February due to work stoppages as well as massive problems in the transport sector (passenger and freight transport), some institutes corrected their GDP growth forecasts for 2011 from 5.5 percent down to 3.7 percent. It is feared that the tourism industry will suffer considerable damage.

Economic challenges

  1. Unemployment: The increase in prosperity has scarcely reached the general population at all. Economic growth was not accompanied by sustainable improvements on the job market. According to the United Nations, the unemployment rate among Egypt's young people rose to more than 25 percent in 2009. Creating jobs and investing in education and vocational training should therefore be key targets for the Egyptian government. Industrial diversification and developing small and medium-sized businesses should be promoted.
  2. Liberalisation: Parts of the Egyptian economy are still controlled by the state, such as the energy sector, for example. Two-thirds of the subsidies envisaged in the state budget are allotted to the energy sector. At the beginning of the year the volume of the subsidies envisaged for gas and fuel for the fiscal year 2011/12 was estimated at 15 billion USD.

German-Egyptian economic ties

  1. In 2010 German exports to Egypt grew to almost 3 billion EUR (plus 11 percent). Egypt is Germany's third most important export market in the Arab region – after the Arab Emirates and Saudi-Arabia.
  2. Egyptian imports to Germany in 2010 grew to approx. 850 million EUR (plus 15 percent).
  3. Opportunities for German business can, for example, be found in power-station and energy technology, electrotechnology, the oil and gas industry, informations and communications technology, the construction industry, transport infrastructure, automotive supplies, the health industry and environmental technology.