Great opportunities for cooperation between Egypt, US, in economic domain

The American administration showed readiness to foster cooperation with Egypt in the various economic spheres mainly in the domain of Information Technology, but expressed concern over bureaucratic red tape.

A prominent American official, requested not to be identified, told MENA that: "The potential for more cooperation in the field of information technologies between Egypt and the US is enormous, perhaps even unlimited." He went on to say: "Any business community looking at the Middle East sees first and sometimes only Egypt because of its size, stability, educated middle class, and its labor force." From the perspective of technology, there is every reason to believe it can go more quickly, he said. A generation of software lasts about eight months; a generation of hardware is about 15 months. A regulatory procedure, legislation or a reform effort can take close to three or five years, he noted.

"There is always going to be a lag of time between the desire to move forward and the ability to have the infrastructure to do so," he added.

The American official said that all agree that in the economic domain, Egypt is on the right path and there is a genuine wish by the Egyptian government to achieve economic reforms, but many consider that things are slow. They are looking for more action, he added.

He noted that Washington has "invited the business communities from both Egypt and the United States to meet together and give recommendations both from the governments in Washington and Cairo about how to see this path moving quickly because everybody agrees we are on the right path." "We have a special program that is largely funded by the USAID and we have customized programs for Egypt. Egypt has been very happy with that and we have seen that translated into action," the American official told MENA.

Admitting that Egypt's path is right, the official said that in order to make businessmen feel more confident that their) business will be profitable, some factors should be there.

The American official said that part of such factors are: l transparency, open partnership, environment of openness and competitiveness, stressing the need for privatization, especially in the field of information technology along with the pending! Issues of customs and the handling of commodities and shipment.

"With all of the difficulties, US exports to Egypt increased by 10 per cent and Egypt's exports to the US increased by 30 to 40 percent last year. Even with the difficulties we are seeing growth," he said.

The official ruled out the possibility of keeping intact the Mubarak-Gore initiative, a framework for Egyptian-American cooperation worked out under the outgoing Clinton administration.

"What I am confident of is that the Egyptian-US economic relationship is strong, deep, wide and it is going to continue and be enhanced because it is in the interest of both Egypt and the US," he said.

Signals are sent from the American bureaucracy that Egypt is important, that we want to see this relationship expanding, he said. On the possibility of initiating negotiations on a free trade agreement, he said the US and Egypt have already been engaged for about a year and a half now in discussions on the Trade and Investment

Framework Agreement.

The American official said that the Egyptian and American sides would hold a meeting in Cairo in the spring. If Egypt is not a World Trade Organization (WTO) compliant, there will be difficulties, said the official.

"I am not going to say what should come out of the Egyptian parliament, the laws Egypt sees fit to keep its course consistent", he said.

There is an opportunity to share views between the US administration and investors about how we see a country going, about reforms, policies adopted, the financial sector, privatization in the banking sector, opening up in the taxation and customs areas... there is vibrant dialogue as our relations re continuing, he said.

Points to look at, and I understand that Egyptian decision makers and policy leaders are thinking about, are that today 50 per cent of the Egyptian population is under the age of 20, Egyptian unemployment is somewhere around 15 per cent, this year Egypt will need to come up with about 558,000 new jobs so that unemployment the next year will remain the same," he added.

Businesspeople say that in order to do so there has to be 7-perecent growth... it is now around 4 percent, he added.

There is a need to grow the economy to meet these challenges, he said. American companies need to see growth in id Egypt. I do not accept that any standard can be imposed, he added. On the possibility that an Egyptian-EU agreement may hurt Egypt-US trade, he said the United States and Europe are competing everywhere.