Press Release 14/12/2006

Cairo Investment Forum Concludes with 2 Interactive Panels with
HE Dr. Ahmad Nazeef and Mr. Gamal Mubarak

The Second Cairo Investment Forum to be held in December 2007

The Forum Gathered Over 1100 Participants from 20 Countries

The Cairo Investment Forum held in Cairo on December 10 and 11, 2006 concluded with two interactive panels. The first was during the lunch hosted by AL-Iktissad Wal Aamal Group in honor of Mr. Gamal Mubarak, the Deputy Secretary General and Head of Policies Committee, National Democratic Party, Egypt, where he addressed the participants and had an open discussion with them. The second, was the concluding interactive dialogue with HE Dr. Ahmad Nazeef, The Prime Minister of Egypt who answered questions with the attendance of Mr. Gamal Mubarak, many Egyptian Ministers and Egyptian and Arab business leaders.

Mr. Raouf Abou Zaki, General Manager of Al-Iktissad Wal-Aamal Group had previously met with both HE Dr. Nazeef and Mr. Gamal Mubarak and discussed the investment climate in Egypt and the role that AL-Iktissad Wal- Aamal Group plays in promoting investment in Egypt, particularly in the light of the economic, fiscal and administrative reforms achieved. Mr. Abou Zaki also, expressed the feedback of Arab Investors on the new investment outlook in Egypt, underlying their serious interest in new projects provided by different ministries and the opportunities in various sectors.

Mr. Abou Zaki indicated that Cairo Investment Forum attracted more than 1100 businessmen and investors from 20 countries, highlighting the rising interest in investing in Egypt during the past three years. By the end of the Forum, HE Dr. Mahmoud Mohieldin thanked the participants, acknowledged the official interest in the Forum, and confirmed the decision to hold the Second Cairo Investment Forum in December 2007.

Concluding Statement:
The Forum comprised of an opening session and nine panel discussion sessions that covered a broad range of topics, including the economic reforms achieved and future plans for further reforms, as well as the performance of the main economic sectors, development projects being planned or underway, and investment opportunities in these sectors.

The Forum ended as it begun, with the Egyptian government expressing it’s economic reform strategy and to accelerate it in the next stage, taking into consideration all that is still negatively affecting the investment climate.
Main comments, remarks and conclusions from the panel discussions that can be summarized as follows: First: Economic Reform and its Impact on Development and Economic Performance

• There was an overall agreement on the importance and seriousness of the reforms achieved, especially as related to the tax and customs reforms, accelerating privatization plans, and the significant change in the investment climate since 2004.
• Emphasis on the fact that reforms aim at increasing profitability and creating new jobs.
• The admission that it is not easy to overcome all obstacles that face investment, and that the government still has many tasks in this respect to achieve. The Minister of Investment stated that the process of reform is not over yet, and therefore, that the ministry still has a role to play.
• The admission that Reform is a long-term process with effects that need some time to be felt by all strata of society levels, especially among limited income and un-employed groups.
• Emphasis on the fact that Egypt enjoys important economic advantages including low-cost manpower, diversified economy, monetary stability, an improving in fiscal situation and a strong resource base, which all combined will generate more investment opportunities in the future.
• Emphasis on the quantum leap in FDI in Egypt, expected to exceeds $ 6.1 billion this year, exceeding FDI in India.
• Awareness of the economic and political investment risks, while keeping in mind that these risks are natural and common among the countries of the Arab World and developing countries.

Second: Investment Opportunities in Banking and Finance

• The Forum emphasized the leading role of the Arab banks in economic growth, and called for deepening the Arab financial market and expanding banking and financial services to all social levels.
• Arab banking integration is possible provided that relations between Arab financial sectors are restructured.
• The importance of corporate governance, transparency, and separation between management and ownership, in addition to developing supervision as essential steps towards establishing a stable banking infrastructure.
• The necessity of achieving more economic and banking openness and allowing foreign banks to enter Arab market freely.
• The Forum called for the establishment of mega-banking entities through mergers and acquisitions, and allowing national banks regional expansion, while emphasizing on the importance of creating supervision entities able to implement International Standards.
• The Forum highlighted Arab and foreign interest in the Egyptian banking sector, as was shown clearly by the sale of the Bank of Alexandria for 6 times its book value.

Third: Investment Opportunities in Real Estate Development:

• The Forum praised the efforts and achievements of the Egyptian government in introducing new laws concerning the real estate sector, and highlighted the change in the real estate development policies.
• All participants agreed on the necessity of setting a master plan for Egypt that would form some kind of directory for real estate investors around the world.
• Participants urged the Egyptian private sector to play a vital role in solving the housing shortage which is increasing due to the need for 450 000 residential unit per year for the coming 30 years.
• The Forum emphasized the importance of domestic and foreign investment in the mortgage finance sector, especially that this sector is witnessing a fast growth, and that Egyptian banks are starting to provide mortgage finance services.

Fourth: Investment Opportunities in Transportation and Public Services:

• Participants stressed the vital importance of the transport sector in promoting investment in the Arab world. On the other hand, Egypt was seen as offering a broad range of investment opportunities in the transport sector including the rail metro, bridges, highways, and naval and river transportation.
• The participants concluded that the Arab world is suffering from a services crisis that can not be solved without solving the resources dilemma and establishing a partnership between the private and public sectors in executing mega projects.
• Emphasis on the need to restructure the role of the state as an official patron, supervisor and monitor of projects, provided that the private sector would be granted freedom of investment in establishing, managing and running infrastructure projects.
• The participants called for a re-consideration of all Arab transport agreements and customs regulations, and to unify standards in this sector in order to develop the Arab transportation sector.

Fifth: Role of Industry in Economic Development and Growth of the Petrochemicals Industry:

• The Forum highlighted the fast growth of the Petrochemicals industries in the Arab World in general and Egypt in particular.
• The participants acknowledged Egypt’s strategic location on the red sea allowing the country to export oriented petrochemicals industry.
• The Forum emphasized the role of industry in enhancing developing the economy in Egypt, and the importance of creating new industries such as manufacturing automotive components or medical industries, and therefore, shifting from labor intensive industries into skills intensive industries.

Sixth: Investment Opportunities in Information and Communication Technology :

• The Forum stressed that the ICT sector in the Arab World is witnessing a major shift from providing old-fashioned services into providing advanced IT services. Therefore, there is a need to increase investments in this sector parallel with the growing liberalization of global communications.
• The Forum noted the merger taking place between various communications services, especially as related to media and communication, which may lead to communications companies owning media.
• The Forum urged Arab telecommunication companies to seriously consider mergers and acquisitions in order to form giant entities that can compete globally.

Seventh: Investment Opportunities in Tourism:

• The participants agreed that inter-Arab tourism continues to face many obstacles and called for decreasing the cost of air transport, implementing open air policies, and canceling visa requirements among Arab countries, as well as diversifying hotel standards and availability.
• The Forum urged Arab governments to adopt and finance joint tourist promotional campaigns and unified marketing policies so as to avoid negative price competition among Arab countries.
• The participants agreed that the future of tourism in Egypt is bright given the country’s human and tourism resources, but considered that the tourism potential can only be achieved by encouraging investors to develop three new types of tourism: Yachting Tourism, Holidays Tourism and Conventions Tourism.
• The Forum acknowledged the importance of the human resources factor in the success of the tourism sector in any country, which highlights the importance of developing hospitality schools and training centers as well as consolidating cooperation with universities and international tourism academies.

Eighth: Investment Opportunities in Agriculture:

• The Forum focused on developing agricultural projects, including utilizing more land and using new products and modern techniques, and organic agriculture, as well as increasing agricultural exports.
• The Forum emphasized on the importance of the agro-processing industry and it’s role in Egypt’s economy, as well as the investment opportunities it offers including food industries and basic material.