Executive Director’s Letter

Internal Audit Systems

You may wonder why the EIoD chose the theme of internal audit for its Third Annual Conference, held in June 2009. The reason is that despite the importance of internal audit systems, they are rarely looked at or implemented properly. Some practitioners think that the objective of audit is to fish for mistakes in order to punish the management. This is quite far from the truth. Internal controls and audit systems compose a one integrated system designed to protect the company, rights of shareholders, and all stakeholders in both the short and long term. The system begins with establishing a system of work and internal oversight at And in order each unit in the company or financial institution. The system should be based on “ the principle of separating the executive authority from the supervisory one within for the control each department using a proper documentation system. Hence, the role of the head system to of internal control/audit is to verify the completeness of the system and the correct application on the departmental level. In doing so, the head of internal audit directly be complete, works for the interest of the CEO to ensure that the company’s control system is shareholders functioning. need a After that comes the role of the Audit Committee, one of the major Board committees. The committee has oversight on the overall internal control and audit mechanism system adopted by the company, as well as the company’s risk management system. to verify that Audit Committees have many other tasks to perform. We, however, do not have enough space to mention those tasks here, but they are detailed in the EIoD audit the company committee manual released in 2007 and posted on our website. is being Consequently, the audit committee assists the board to play its role in the follow-up and supervision over the management. Furthermore, the audit committee highly managed depends on the work of internal control/audit director. The committee shields him/ in a way to her in the event of any irregularities or deviations from the management, for he/she may be changed only by a reasonable and acceptable decision issued by the Audit maximize Committee. returns on And in order for the control system to be complete, shareholders need a mechanism to verify that the company is being managed in a way to maximize returns on their their money money. This mechanism is the external auditor. This illustrates the importance of ” the external auditor being highly qualified as well as totally independent of the management and the board. He/she should be sufficiently qualified to comment on the integrity of the financial statements as well as on the company’s status in general. Finally, the audit and internal control system must operate in a harmonious and coordinating way, for the imbalance in any part of it may lead to gaps in the internal control system. This would then increase the level of risks faced by the company. Ashraf Gamal El-Din

Executive Director Egyptian Institute of Directors \ Egyptian Corporate Responsibility Center Editor’s Letter

Businessmen: patriots too?

“Good governance, Governance, Social Responsibility” though not exactly new terminology, these concepts are only just becoming prevalent on the economic street, joining the list which fairly recently stormed the business glossary, such as transparency and globalization. These terms have all been generated by use context and environment performance as well as trends in economic growth all of which produce new vocabulary and standards that did not exist before. “The In short, every age creates its laws, and makes its men. Success of these men is based not community of only on their talent and potential, but also on their ability to absorb those laws and new vocabulary while utilizing their skills in employing those elements. This is done while in businessmen pursuit of development and implementation of the most recent models of management, in Egypt is not such as disclosure, with all its pros and cons, throughout all exercise of their institutions. Businessmen should not forget, while creating projects, that social responsibility must new, nor is the be voluntary, realizing that this action cannot be compared to the loss felt from paying, private sector say, for a wasted bill; in one way or another, the company as well as the businessman will receive the benefits of that first step many times. No business project, no matter a foundling what it is, works in a vacuum or isolated from society. Indeed, the more it interacts without a successfully with its community and surrounding environment, the more it will grow and succeed in its own right. legitimate The community of businessmen in Egypt is not new, nor is the private sector a father. And foundling without a legitimate father. In the era before the July, 1952 Revolution, there were many national models of the pioneer spirit of business who are today there were viewed as the “fathers” of their particular fields of interest. Presented in this issue of many national the “Executive” are a few of the vivid examples of the patriotic “pashas” who were in conflict for success and profit, while trying to uphold the nation and promote Egyptian models of the products and brand names’ reputation. pioneer spirit Today the pioneer spirit remains as there are always struggles and great minds to help of business solve them, but the nature of approaching society’s problems has changed. For example, if the state is moving in direct support of low-income families by more than EGP 70 before billion, it has, on the other hand, provided unprecedented support for businessmen in the 1952 the form of a proper legislative and legal environment, various incentives, and exports support. Successive governments have been under harsh criticism, and were described in Revolution. some cases as “businessmen’s government”, that is, government favored them, worked ” for them, and made decisions to support them. Those critics do not know that the government, through this policy, actually opens new employment horizons through the gate of “businessmen”. Thus government plays its role, but by playing more than one “tone” at a time, it is able to maintain its controlling role over business while at the same time preventing market monopoly and manipulation. Nahla Kamal

Assistant Executive Director Egyptian Institute of Directors Read Mohammed Nassar, Mohammed Al Banna, Hany Abu-Fotouh,

For Linda Eagle, Mohamed Youssef, Basant Isaac, Mustafa Hunter

“Our red lines will not Towards a “Business prevent us from disclosure!”, Case” for CSR in Health exclaimed Alex Shalaby from Editor-in-chief the 34th Floor. Nahla Kamal

Managing Editor Earlene Gentry The Third Annual Conference 8 -12 on Corporate Governance Art Director 14 56 Audit & Business Top Ten Things Egyptian International and Arab tourism Sustainability Ahmed ElMaraghy sector decline seen as result of Bankers Should Know About Environmental, Social & 18 -20 Design Director the U.S. Bank Secrecy Act financial and epidemic crisis Governance Index: ESGI Egyptian Nesrin ElMehy and Money Laundering How the West Was Wrong 22 -24 Editiorial Production Internal Audit 26 -29 The First Defense Line Hind ElFalaky Creating an Effective Board 30 -32 Nermin Helmy for an Islamic Bank Mohammed Halima Role of Banks: New concept 40 -41 Gift from the Ministry of 34 66 for an old meaning For Advertisement in Executive Banks’ BoDs magazine, kindly contact the EIoD at: Investment to Cairo University Selling wave dominates: 42 -43 and the Financial Crisis main index ell by 12.5% Tel.: +202 33352765/ 37482769 The land of Al-Ahram Fax: +202 37629028 Beverages .. scientific Mohamed Nosseir 48 -51 email: [email protected] research center The man wo led Egypt address: Junction of Salem Salem & into age of information Abdel Azim Rashed st., 4th floor, technology Agouza, Giza, Egypt Advancing the CSR Model 58 -60

The Executive is a leading magazine United Nations- Global 62 -64 for business community and business Compact Communication on decision-makers. Packed with lively and Progress…How to create it! informative features and shorter advisory 70 -73 items, it is an essential quarterly reading 38 Egyptians are challenging for directors of companies in all sectors 44 the the three crises of CSR Partnerships: “Talaat”, the Pasha who and of all sizes. summer Getting a Head Start to a provided the poor with a real The Executive is editorially autonomous and the opinions expressed are not those Meaningful End leg to stand on ... Recession Dominates Real 74 of contributors’ employing organizations, Estate Market Bits are on unless explicitly stated. Egyptians returning from The contributors points of view do not abroad necessarily reflect the views of the EIoD, ECRC nor that of the Ministry of Gold market Slightly revives 75 Investment New crisis hits cement market 76 Printing: Police Printhouse 52 86 Iron prices to reach stability 77 corporate attention, as reflected from an initial result of a current study attempted by the EIOD.

Dr. Ashraf mentioned that The Third Annual Conference corporate governance applications are still facing some difficulties and challenges, on on Corporate Governance which the EIOD is working. He stated that the total number of Egyptian directors who acquired a “Certified Director” Audit & Business Sustainability certificate by taking the Board Development Series Program - provided by the EIoD - reached 116 directors from both public 15th June 2009 and private sectors. This is in addition that the EIOD provides training programs, most of which contributing to develop a are accredited by the National flexible arrobas business strategy independency of the supervising 8 he Egyptian Institute of Association of Corporate Directors is what is needed for progress. and auditing authorities, and 9 Directors organized its third (NACD), and the total number And that the new challenge finally the human resources annual conference on corporate of trainees, since January 2008, is to conjoint the roles of the and capabilities in this field. governance in cooperation with reached 680 participants, and governments and the businesses, She highlighted the importance the UNCTAD and the OECD. IT who are considered as corporate in order to build a partnership. of the application of corporate was held on 15th June, 2009 at the Four governance pioneers in their And that this new challenge governance principles to the SeasonsT Hotel, Nile Plaza, Cairo, Egypt. companies. requires new knowledge, which is financial sector and how it is very This year’s conference focused on “Audit obviously created by the Egyptian critical for its protection. & Business Sustainability”. It aimed at The key speakers of the opening Institute of Directors that has been strengthening the audit tools (Internal, session were Dr. Djordjija very well known by creating new During his speech, Mr. Hazem External and Audit Committee) within Petkoski, Head of the Business, training programs to build new Hassan mentioned that there are corporate governance best practices and Competitiveness and Development knowledge of dealing with such many hindrances affecting the the business sustainability. The conference team at the World Bank Institute; issues through intensive work with authorities of Egyptian corporate discussed the current global financial crisis Dr. Hala El Said, Executive Director other international partners. audit committees. He explained and the role that the audit function could of the Egyptian Banking Institute; that audit committees support

have played to prevent it. Mr. Hazem Hassan, Chairman Dr. Hala El Said’s speech focused boards in applying corporate Corporate Governance of the Egyptian Association for on the impact of the economic governance through four key multinational a period of an unprecedented Accountants and Auditors. crisis and that it led to an urgent areas: financial reporting, internal companies, economic crisis, which shed light, need for dealing with corporate control and risk management, regional and again, on the theme of corporate Dr. Petkoski talked about the governance issues in an objective internal and external audit. Mr. international governance. Dr. Ashraf also economic crisis and how it makes way and re-evaluating the its Hazem also noted that audit fi n a n c i a l noted that many countries and people feel they are in the middle codes, rules, and applications. committees in many Egyptian experts from international organizations started of a natural disaster, and in this She noted that there is a strong companies are lacking effectiveness Egypt and the to revise all corporate governance context there are several trials relation between applying because of the unclear nature The conference was organized MENA region. codes and applications, after to find simple technical solutions corporate governance principles of committees’ roles, tasks, under the auspices and they were assured that part of to face the financial crisis, which and the existence of an efficient and practices. In addition that participation of H.E. Dr. Mahmoud The opening session began with the crisis was caused due to the is not easy. He also noted that and effective internal and external committee members are not fully Mohieldin, The Egyptian Minister the speech of Dr. Ashraf Gamal failure of applying these codes, corporate governance is a part audit system. Dr. Hala also qualified. And there is no regular of Investment. There have – the Executive Director of the especially auditing and disclosure of much broader engagement mentioned the fact that the crisis and systematic preparation for been around 600 participants EIoD. He started his speech codes. He highlighted that there of corporations, which could revealed a severe negligence in the committees’ meetings. Finally, from various backgrounds that by welcoming the guests and are good indicators that corporate link - together with corporate practices of risk rating business, most committees are in need of include: Policy makers, leading speakers, and he noted that governance applications is growing social responsibility - business to receivables management, sufficient resources. He mentioned businessmen, financial institutions, this year’s conference comes in inside Egypt and receiving good the society. He mentioned that corporate governance rating, the that the basic issue is that the for markets by organizations Development Series Program” with no supervising entity or took place. effective control system on their works and their ratings. The graduation ceremony was And that The most important followed by the speech of Mr. thing is to enforce a control Philip Armstrong, Head of of a high quality, and not to Global Corporate Governance tighten the control rules to Forum – the Keynote Speaker; a degree crippling economy and Dr. Mohamed Omran, Vice and not sustaining the market Chairman of the Egyptian Syock efficiency or the effectiveness Exchange – the Commentator of the supervisory system. on the Keynote Speech. Dr. Mahmoud Mohieldin highlighted the importance Mr. Philip’s keynote speech of revising and developing was focused on the financial corporate governance codes crisis and lessons learned. in light of the international He highlighted the missing events and situations, as well aspects of corporate governance it is a culture and as activating the role of the in companies, which is the idea a system of controlling the internal and external audit, of director development in terms relationship between owners supporting Business Sustainability”. 10 board does not fully understand from the international experience and the reporting system of board training. He showed and executive management and The moderator of this session 11 the role and importance of the in training programs. New The Minister mentioned at the end his perspective on some of the all stakeholders. Thus, the more was Dr. Hala El Said, Executive audit committee in corporate dimension was reached, by which of his speech that the Government background of the financial corporate governance is applied, Director of the Egyptian Banking governance application. Added to corporate governance was linked is deliberating a comprehensive crisis, and gave an outline of the more society is benefiting. He Institute. And the speakers were that, the lack of communication to corporate social responsibility, corporate draft law, “New Unified some of the issues that arise noted that the main consequence Mr. Khalid Deeb, Director General between the committee, the in order to protect environment, Company Law”, which is the result from this background. At the of the current economic crisis of Abu Dhabi Center for Corporate board, and the management of human rights, labor rights, and of two years efforts. The law aims end, he mentioned some issues is discovering the gap between Governance; Mr. Hesham Guemeih, the company. to stand against corruption. That to unify the rules controlling all concerning corporate governance corporate governance principles Director – Internal Audit Division development in applying those Egyptian companies, taking into which, regardless the crisis, are and their application. at Piraeus Bank – Egypt; Mr. At the end of the opening session, principles and standards was account corporate governance important to think about. Mohamed Nassar, Group Internal H.E. Dr. Mahmoud Mohieldin – the a part of the comprehensive principles, shareholders rights, The conference was composed Audit Director at AlKan Holdings; Minister of Investment, overviewed economic and financial reform transparency and disclosure, Dr. Mohamed Omran mentioned of three sessions, the first one Mr. Omar El Sayeh, Chairman in his speech the development process. In the context of the boards’ responsibilities and that corporate governance is focused on the “Role of Internal of Barclays Bank Egypt; and Dr. of corporate governance third conference, Dr. Mahmoud commitments, and external not only about respecting codes Audit and Audit Committees in Samir Hassan, Head of Internal understanding and awareness over Mohieldin mentioned the impacts and internal audit systems. It is and literally explain them, but Audit at Amer Group. The session

the past years mentioning that of the international economic expected to solve problems facing discussed issues related to the Corporate Governance the first conference emphasized crisis and how it showed that the current law’s application. internal audit such as the selection on corporate governance corporate governance and Dr. Mahmoud Mohieldin also of the chairperson and members principles, and the application of disclosure principles were not mentioned that this month of the audit committee; the transparency, disclosure, equitable efficiently applied. This non witnessed many activities related identification of the stakeholders treatment, and accountability. effective application of corporate to companies, in addition to this and qualifications of committee H.E. also noted that Egypt is governance codes was the main conference and the draft law, as members; meetings schedule; the first country in the Arab and reason that boards were not aware Mr. President decreed the bylaw of the effective communication African world to issue and apply of the severe financial situation, the Egyptian Financial Supervisory between the audit committee and corporate governance codes, the instable liabilities, and the Authority, taking effect in the 1st board members; the evaluation according to the OECD standards. mismanagement of risk. There of July 2009, in addition to a of the committee and the board; H.E. mentioned that the second was negligence and violation decree for a new regulation for and the risk-based audit. Mr. conference emphasized on the role of corporate governance codes the Egyptian Stock Exchange. Khaled Deeb discussed the of companies’ board of directors concerning boards and general role of the internal audit in in corporate sustainability. The assemblies. In addition that audit After the Minister’s speech, the sustaining corporate governance performance of the EIOD, by the and control authorities were not graduation ceremony of the principles. He also discussed date of organizing that conference, efficient too. H.E. noted that 39 participants of the 6th, 7th, the role of the audit committee, was developed after benefiting credit and risk rating was provided and 8th intakes of the “Board based on independency and objective evaluation of company’s Chairman at the Capital Market Development team - World Bank procedures. He highlighted the Authority. Institute. importance of the audit committee as a change and education tool The speech of Mr. Mohamed Dr. Anthony Miller focused on inside the company. Tarek Youssef focused on the the auditing procedures and traditional and modern audit tools corporate governance disclosure. Mr. Hesham Guemeih mentioned in banks and companies. He also He mentioned that auditing the importance of the internal highlighted the importance of the functions are a cornerstone of committee and its tasks and external auditor. corporate governance and that responsibilities, in addition to the the disclosure of these functions role of the board in specifying clear Mr. Pietro Fioruzzi’s was about is the key to building investor authorities and responsibilities. forwards-looking statements and confidence. He noted that the He noted that there are steps updates in times of crisis. He disclosure of auditing issues is of structuring the internal audit compared between the approach relatively poor in many markets. plan, according to a risk based to the forward-looking statements He also stressed on the fact that method. of the United States and the strengthening disclosure in Egypt, European Union. particularly in the area of auditing, Mr. Mohamed Nassar discussed remains a key objective. the role of the internal Audit in Mr. Christopher Razook explained fighting corruption. He talked the IFC methodology as defining Mr. Ahmed Ragab’s speech focused 12 about the corruption phenomena the key dimensions of corporate on the role played by the Egyptian and the reasons behind this governance. He mentioned that Transparency Center in spreading phenomena. there are principles that should be awareness about transparency encouraged in the environmental and anti-corruption issues. He Mr. Omar El Sayeh gave an management control. In addition highlighted the importance of example on the role of the internal of the importance of having having indexes that calculate the audit in banking institutions to be consistent standards progress done by the companies able to be sustainable. concerning the implementation of Dr. Ashraf ElSharqawy talked in his anti-corruption and transparency Dr. Samir Hassan discussed speech about the Egyptian Capital procedures. risk-based audit committees. Market Authority’s auditors’ quality He explained that there must control unit and its authorities and Ms. Alissa Koldertsova talked be a link between the audit responsibilities. He mentioned the about the internationally accepted committee strategy and the international principles governing OECD standards of corporate detailed objectives of company’s this unit, in addition to its structure governance and the importance main objectives. He mentioned and achievements of having accounting and auditing that there are challenges facing standards as well as benchmarking the committee in light of limited The third and last session of the disclosure practices in Egypt and information. conference focused on “Disclosure in the MENA region. and Accounting Standards”. The The second session focused on the moderator of this session was Mr. At the end of this session, the “External Auditors and Business Mohamed Yehia, Partner – KPMG. annual disclosure competition Sustainability”. The moderator The speakers were Dr. Anthony ceremony took place where the of this session was Mr. Graham Miller, Corporate Transparency winners from different participating Minter, OECD. The speakers were and Accounting Program – companies were awarded trophies Mr. Mohamed Tarek Youssef, UNCTAD; Ms. Alissa Koldertsova, for the best annual reports and Principal Partner - Grant Thornton; Policy Analyst, Corporate Affairs websites. These companies were Mr. Pietro Fioruzzi, Partner - Cleary Division – OECD; Mr. Ahmed Telecom Egypt at the first place, Gottlieb Steen & Hamilton LLP; Ragab, Executive Director - Mobinil at the second place, and Mr. J. Christopher Razook, Senior Egyptian Transparency Center EGYTRANS at the third place. And Operations Officer at the IFC- – Ministry of Investment; Dr. the trophies and certificates were World Bank Group; and Dr. Ashraf Djordjija Petkoski, Head of the given to the chairmen of these ElSharkawy, Senior Advisor of the Business, Competitiveness, and companies. Alex Shalaby from the 34th Floor Our red lines will not prevent us from disclosing!

t a height of 34 floors Alex Shalaby, Chairman of Mobinil, sits in his office viewing the Nile and, in the distance, the Pyramids of Giza. Other Cairo landmarks--- large and small, imposing or modest---make up the details seen by the head of Mobinil as he works. These humbling sights may assist him in drawing a map of success during heated and ruthless competition, while reminding him there is a price to pay for being on the top---a position not guaranteed. With his office windows open Ato maximize the awesome view while watching/listening to the BBC World channel---this is how we met Mr. Shalaby, providing a strong indication of the way he directs the company. The meeting was not the usual interview, for it came after the company won second place in the annual disclosure competition organized by the EIOD. Though it is near the top position, it is nevertheless not the first position, which was awarded to the company last year. Disclosure was the focus of our interview with the President of Mobinil, but we also addressed the standards of governance and the matter of service and social responsibility that must be borne by such a huge company like Mobinil. 14 15 changes than that. Therefore, if there was a decline, it is a very limited one. Interviewed by: Nahla Kamal Some people imagine that disclosure is limited to only financial information. What is your comment about that statement? Mobinil discloses non-financial information as well, At the outset, we want to approach the such as its activities. Since Mobinil is a services strategy of Mobinil, which made it rank provider company and rates of subscribers range

second in the competition for the annual around 45% of the market, we therefore allocate a Interview disclosure prize. portion of profits to activities. We are also working to provide social services such as health, education and We have a disclosure department responsible for culture services. making ongoing comparisons between the position of our company and other companies. Another of Mobinil is interested in projects and services that its duties is to reconcile the laws through which the increase the rate of participation among employees, company is operating or the general laws governing such as volunteer projects and convoys. By this is the work of private institutions. On the other hand, meant medical convoys and social convoys sent, for it does monthly as well as quarterly reviews to keep example, to contribute to the rebuilding or renovation up with those changes, in addition to applying all of houses in the Egyptian countryside. Another updates for disclosure and to publish this on the example is our volunteers who help in schools in company’s website. We also release annual reports crowded areas such as Imbaba. in addition to monthly meetings for the presentation In addition, young people form working groups that of our financial position. present ideas such as “desert tourism” and “Laptop suitcase”. These youth groups were one of the most How do you explain the decline from first important and successful ideas and projects under to second place in the competition of this the global “achievement” projects. year? Of course, I would prefer to maintain the first place, Are these programs still seasonal? but I imagine that the difference between the two No. These are ongoing programs with specific plans, ranks is not great, and we are in a market that is not seasonal at all. We have special programs for full of moving variables, so you can expect more educational activities not just during the school year. The successful manager must love people, and listen more than speak.

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company led to competition and improved services We have already separated the two positions, with There are also annual or biannual competitions. How does Mobinil, the first mobile with lower prices. Therefore, I did not have any careful delineations between their roles and duties. Furthermore, there are convoys sent in Ramadan telephone company in Egypt, maintain its reservation on the establishment of the company, for There are also committees emanating from the to the Egyptian countryside for people with special position on top? now we have diversity of services, lower prices with Board of Directors. The idea of follow-up in the needs. Mobinil is the only mobile telephone company technological growth, and all of these are positive company aims to achieve continuity and to prepare listed on the Egyptian Stock Exchange. Of 11,000 effects. new leaders. Each department manages a screening How do you balance between disclosure shareholders, 99% are Egyptians, though a small process. There is a committee to determine annual and the company’s red lines? proportion of foreign investors are involved. How did the problem of shares acquisition promotions, and there are some cases where the

There are many matters that are disclosed, such as affect the company performance? committee is held in mid- year. Interview financial results: quarterly, half annual and annual The majority of the company owners are Egyptians, I would imagine that the dispute between “Orascom results. But there are investors who interfere in the and you can see that the second part of the Telecom” and “France Telecom” will not lead to What are the characteristics of a successful details to find out more, and here we enforce red company’s name is the name of the Nile River, with significant negative effects, and I think that this manager in your opinion? lines to preserve trade privacy and competition. But all its emotional implications. partnership is good for Mobinil as each of them has its The success of any manager is based on how to all results are generally disclosed. This is in addition to the sophisticated services, own particular experience. Orascom is able to utilize manage. He/She must love people and be happy network quality, and advanced technology, along its experience in developing countries in Middle East with himself, and to listen more than speak. Do community, market conditions, with special emphasis on customer service. and South Asia, while France Telecom has experience competition, and the future of service help in commercial distribution and technology. this trend toward disclosure? What about companies’ evaluation reports? When should one be a democratic director There is no decisive answer to this. I would say These reports disseminate awareness and disclose How many employees are in the company, and when a dictator? yes and no at the same time. Yes, as the market is corporate services in a clear and unbiased manner. how are they are being trained, and what He/She must be democratic at all times and to be able still promising, and there is an increase in services, The advantage of such reports is that they regularly about the size of investment? to understand people around him. If each individual income, and the number of consumers, and the re-measure performance nationwide. They are The number of employees in the company ranges is in the right place, he/she shall work without the company continues to grow. But no, when we segment objectively dealt with, as they are issued by neutral between 3200 and 4000. Training of personnel is a need to be a dictator. the market to business, geographical areas, and the authorities. continuous process, and we pay 1% of revenues to levels of income, then we will find that each company the State for the purpose of training and qualifying. What does modernity mean to Mobinil? has its own plan. There are companies with a focus There were some reservations on the As for the budget, it is reviewed every 13 months. Modernity is when mobile telephone networks are on youth, work opportunities, or rural areas outside establishment of a third mobile telephone different from the TV networks or other devices, when major cities. As for the level of expenditure on service, company. Do you have any comments To adapt investment with growth, what there are four thousands sites, when state-of-the-art voice and non-voice communications, we retain our about this? about separation between the role of the technology is adopted, when the most advanced 3G right to keep this information undisclosed. There were two companies providing a good service, Managing Director and the responsibilities technologies are adopted, and when our network is prices were not as now. The emergence of a third of the Chairman? considered as a good, reliable network. Environmental, Social & Governance Index: ESGI Egyptian

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and future financial performance (either long- or are annually selected from 70 companies. short-term). The index companies are quarterly evaluated in order n line with the continuous cooperation between the to adjust their rankings. Ministry of Investment’s Egyptian Institute of Directors ESGI Constituents: (EIOD), the Egyptian Stock Exchange, and Misr Clearance Companies’ volume of activities is ignored, and only In case degrees of one of the index companies are (MCSCD) which has aimed to create a national environment the EGS performance is taken into account. adjusted, then its index weight will be decreased or promoting the principles of corporate governance (CG) the company is to be delisted if necessary. and corporate social responsibility (CSR), new efforts are The index structure differentiates between the Ibeing made to design a special index for corporate governance levels of performance and profitability based on the In case an index company was de-listed during the and corporate social responsibility (ESGI). Such an index is The understanding of CSR standard capital market and the levels of performance year, then no other company is to replace it during

desirable in order to study the degree of consistency of the has greatly evolved in order and profitability based on the EGS index. the year. The index will be counted without the Corporate Governance companies’ strategies with the State’s development goals and to reach the current index delisted company. to evaluate the companies’ performance at the basic elements concept due to belief in: The last three years are fixed as the “comparable of good governance, protecting the environment, participation The possibility of measuring period”. ESG Evaluation Model in societal development and the anti-corruption efforts, in business performance using It is possible to identify a group of measurement addition to protecting the rights of all company’s stakeholders. environmental and social Companies are ranked in descending order, based on elements by which the company’s ESG performance standards in a method similar degrees of EGS performance. is evaluated: to financial standards. Standard&Poors is to provide the required technical The close relationship between the ESG application In order to stabilize the companies constituting the The degree of disclosing the ESG policies. support to sustain the index performance, similar to index, no companies are to be de-listed during the what it did for the Indian ESG index in January 2007. year in case its degrees dropped by 10% or less, The degree of complying with the CSR and CG The index will be officially adopted by the end of compared to the year in which the company was first principles. this year (2009). It should be mentioned that ESGI listed on the index. is totally financed by the British Embassy, Orascom Based on the above-mentioned criteria, the Telecom, Orascom Construction Industries and The index is to be annually restructured on the first methodology of companies’ evaluation of ESG MCSCD. The EGX70 constituents will be the subject business day of the year. performance will be as follows: of evaluation, based on a number of basic CSR and CG standards. Results are counted for the index companies, which Pyramid Base: Disclosure & Transparency: 20

• Shareholders Rights • Internal Auditing & Control Pyramid Top: Relationship with • Financial & Operating Indices Stakeholders • Management & BoD’s Qualifications • Ownership Structure This is to be evaluated through a tailored survey. • Business Ethics 127 indices of CG disclosure • Environment 70 indices of CSR disclosure • Staff • Society Inquiries & Surveys • Clients • Products Community, government, media, and company statements Pyramid Middle: Quantitative Evaluation Annual reports (and also other reports) issued by the Analyzing the information and data collected from company70 indices of CSR disclosure independent sources (NGOs, NG Media) and also the company’s sources (website and CSR reports).

Sponsors: simply overlooking the risk fluctuations in the market itself. were ignored, neglected, or noticed too late, leading to How the West Was Wrong: 4. Lack of Communication severe repercussions. Communication is a key factor. As was the case with 6. Capital Reserve Requirements The Mismanagement of Risk in the Western Financial Sector the West, no matter how One of the leading factors advanced a company’s behind the mismanagement risk management software of risk experienced in the or capabilities are, if this Western financial sector was knowledge cannot be clearly the lack of adequate capital translated to its Board of reserve funds. In many 2. Focus on Narrow Measures Directors and Chief Executive instances, increased risk led Prior to the financial failure, Officer (CEO), failure is the to increased profit. However, many Western financial only possible result. instead of saving this profit institutions used a system of as capital, the money was monitoring risk which focused distributed in the form of on daily measures. However, bonuses to top executives and this narrow focus led to severe “Mismanagement managers. When these risks problems when assets couldn’t of risk is the most began to falter, there was no 22 be sold quickly. This method back up, leading to the turmoil 23 didn’t actually measure risk significant factor currently being experienced at all; it poorly predicted an attributed to the by financial institutions across institution’s actual overall the globe. financial health. While many current financial companies thought they crisis. Risk Management in Egypt were well off with only a few ” Within Egyptian financial risks, they were actually in institutions, the implementation lthough the cause of the current financial crisis within the United far worse trouble than their and focus on risk management States and beyond can be attributed to a number of factors, measurements showed. 3. Failure to Manage in Real is still in development.

the most significant of these is the mismanagement of risk. Time Nevertheless, the importance Articles Risk management, in one form or another, has always been the 3. Disregard of Knowable Risks are in a state of of risk management cannot be cornerstone of American banking. However, the current crisis has and Concealed Risks constant, daily fluctuation. overlooked. After a 50 percent revealed a number of factors within risk management that have led to the Risk management is dependent When institutions view risk rise in net profit, Egypt’s National Afailures experienced across the Western financial frontier and beyond. upon discerning which risks are management as a task rather Societe Generale Bank (NSGB) the most volatile, and dealing than a process, they face stated that to continue on a path with these accordingly. When severe repercussions. This of productivity, they will continue The Six Major Factors of the backbones of Western risks are ignored, disastrous is exactly what happened to to focus on risk management. The six main ways that risk was risk management since its results follow. This scenario a large number of Western Likewise, Ahli United Bank Group mismanaged by Western financial inception. Nevertheless, this was played out with many banks which failed to made risk management one of institutions, are: was one of the main factors Western financial institutions consistently monitor their its main priorities after buying that lead to the recent which mismanaged risk by evolving risk profile. Sudden Delta International Bank in 2006. • Reliance on historical data. mismanagement of risk. The • Focus on narrow measures. simple explanation? Times • Disregard of knowable and change. Every situation is concealed risks. different and comes with its • Lack of communication. own set of variables. History Mohamed Elbanna • Failure to manage in real can be used as a guide, but time. the varying factors that come Chief Compliance Officer for Galaxia International Service • Poor capital reserve requirements. with time make it too feeble to be used as a total support A special advisor for Middle Eastern banking 1. Reliance on Historical Data system for risk management. Historical data has been one industry.

Adherence to Basel II Many U.S. institutions didn’t adhere to the strong capital reserve standards implemented by Basel II to employ strict laws and regulations specifying how much capital should be held to protect institutions from risks. Egypt, on the other hand, is Basel II based, and because of this, is further protected from one of the most important factors that led to risk mismanagement within the United States.

Islamic Banking Finally, Egypt is populated with many Islamic banks, which allows 24 for a clear advantage when it comes to risk management. While Western banks are mainly credit- based, Islamic banking is more reliant on an asset-based banking system. Because of this, Islamic banks do not have the same risks that conventional banks have, due to the fact that risk is largely a function of credit.

So What’s the Risk? Although Egypt stands in a better position to avoid risk mismanagement than the West, there is still a great deal to be learned from the mistakes of others. Once risk management develops within Egypt, it will become susceptible to all of the same issues and problems Egyptian Corporate Responsibility that have recently devastated the Western financial sector. To And, unlike the West, Egypt is a fairly young science, only gaining prevent this, Egyptian financial Center better positioned to successfully wide acceptance within the last institutions must develop quality implement risk management few years. Although this poses a training programs throughout the procedures. The top three reasons few problems, mainly, that risk organization to help manage risk. Our mission is to engage, increase and empower businesses for this are: management knowledge is still What Egyptian banks and financial with responsible conduct and encourage their true commitment Risk management is young. developing, it also allows for many institutions need to remember is Adherence to Basel II. advantages. Without an existing that although learning sometimes to the principles of United Nations Global Compact. Islamic banking. foundation, risk management in involves making mistakes, it is Egypt is better able to evolve with always better to learn from the Risk Management Is Young the times and address the current mistakes of others, than from your In Egypt, risk management is still and future risks that challenge the own. Junction of salem salem & Abdel Azim Rashid St., Agouza, Cairo, Egypt Tel: 002- 02- 33352765/ 37482769 Fax: 002- 02- 37629028 Website: www.eiod.org businessmen are now aware department must complete, that they need an internal line which is to identify itself by all of defense in order to follow possible and necessary means, up, test, analyze and then in order to communicate with monitor the alarm bells ringing the rest of the company’s in a timely manner before departments, including senior Internal Audit any incident, and before the management, through the “disease” spreads in the body following channels: of the patient and treatment Workshops and seminars. becomes difficult and costly. Training courses about internal The First Defense Line controls, business risks, Unfortunately, this interest and corporate governance... etc. need from boards of directors Website and e-mail on the and businessmen has not grown company’s internal network. enough in the Arab world; it Awareness leaflets to be only tentatively appears in distributed to the departments. some international companies because the foreign partner is These procedures aim to establish the one who requests a review mutural trust and ensure the of internal management along internal audit accomplishes its 26 the lines of the parent company in treat himself while avoiding seeking mission efficiently, easily and 27 Europe and America. Such upper advice from a specialized doctor. effectively. level interest may also appear in a Imagine how many attempts, and few large economic entities. the amount of random drugs he In general, however, the majority would need to use to alleviate of local companies’ boards in and mitigate the pain. However, the Arab region consider the bringing a specialist doctor would “Good selection of establishment of the internal shorten the time and effort and working cadres in audit department pointless and lessen costs. Continuation of the without benefit for them. This policy of trial and error assuredly the internal audit occurs despite suffering long increases the vulnerability of the is a key element in years of administrative disorder, patient to increased risks, while he internal audit profession was for many years absence of proper procedures, he ignorantly believes he is on his determining the neglected and ignored as being of little importance. low or lack of profitability, liquidity way to recovery. extent of its success It was tasked to persons with no aspiration or problems, and financial deviations in the defense of persons transferred from other departments for or thefts. Only a small number of The qualified and experienced Corporate Governance one reason or another. companies ---especially in Egypt internal auditors, professional the company, and and generally in the Arab world- and armed with international the guarantee to T -- have established internal audit certificates, are the companies’ The profession was conducted after the serious collapse of several departments. doctors. They do check-ups its sustainability, as a simple or low-level routine major American companies in 2001 and preventive tests, and they despite internal and whose scope might include which resulted in the American Man, by nature, is the enemy of describe appropriate tonics and examination of invoices and daily Congress issuing the Sarbanes the unknown. That’s why there vitamins---for prevention is better external risks. logs, in search of any error here Oxley legislation, the interest might be an excuse for the owners than treatment and/or cure. If the ” or there, lost documents or an in the internal audit profession of companies and the boards, as disease is detected early, it may unclear signature. As a result, the amazingly increased and the they do not know what an internal be eliminated before it spreads, No one disputes that all companies issued reports were ignored by American Society of Internal audit department can do for even if it becomes a matter of work to achieve the goals for which Mohammed Nassar senior and even medium-sized Auditors became very active them, and what the internal audit eradication of poisoned parts, in they were established. Whether management. and was successful in attracting profession can accomplish for the order to avoid the contagion of profit-making companies or non- Fellow of the American attention to the profession, its business community at large. other vital units. profit entities, boards of directors Society of Internal Auditors But with the massive and rapid assets and standards. and managers are in constant Certified expert in CCSA Certified public accountant developments in the business Imagine a sick person suffering Therefore, there is an essential need to find and identify the risks world since the 1990s,, especially Boards of directors and from serious pain, trying hard to duty that the internal audit of the business they manage, and and follow up, since and contractors, constitute an they are specialized in obstacle when compared to what the analysis and design auditors are able to provide. The of internal control ability to study, mediate examine systems, they can and analyse, is available to enable the prevention internal auditors because they are and control of errors, independent and not required for or irregularities and any operating functions within the deviations in a timely framework of the routine work of manner. the company.

Similarly, it may be remarked that external auditors (legal accountants), or external consultants are able to accomplish such a task. This may be true, but only for a limited period of time equal to the duration of the assigned task. In addition, they which may prevent them from are not dedicated to one customer- 28 reaching their goals. However, in --they are committed to a specific 29 this context the means and tools time and a specific cost of work and their resolution through environment characterized by the staff and workers. vary according to the different which cannot be exceeded during a scientific method following: cultures and references of the the advisory service. On the • The ability to make 9. Effective and continuous decision-makers, and in the absence contrary, full-time internal auditors decisions 1. Transparency and disclosure channels of communication of methodology or guidance, can fully service their companies between the different everyone may go astray. regardless of the degree of depth 3. Keen to ongoing training 2. Design and implementation administrative levels, and the Risk identification and assessment Internal auditors are characterized it requires, in terms of time and in various management. of an easy and practical consolidation of the principle is the core role of senior by their ability to follow up the effort, for the completion of the specialities organizational structure, of “open doors” to senior management, to maintain the progress of work in the company. audit examination or analysis. comprehensive for all the management, to ensure sustainability and the entity of the They are completely dedicated 4. A good monitor for the departments the non-isolation from the company. On the other hand, the to the test, the evaluation, the Then what are the specifications various sources of public company’s activities. presence of a method and a guide access, the analysis, the reach of required for the internal auditor in education (a minimum of daily 3. Autonomy and adequate is essential, and these are, in my results and the development of order to be eligible for the role of newspapers). support for the Department 10. Activated code of ethics and opinion, demonstrated in internal solutions, as well as the follow- Senior Advisor to the management, of Internal Audit professional integrity.

audit experts and specialists in up of their execution. They are and the basic reference for 5. Characterized by good personal Corporate Governance the science of risk assessment thus prepared to update the guidance and awareness to all qualities, such as courtesy 4. Composition of a strong and In the end, the human element and management. This leads us to management on the company’s departments? and good appearance. effective Review Committee was, and will continue to be, the the fact that senior management situation, the problems it faces, key player in the system. Physical should seek advice from internal and the degree of discipline The Internal Auditor, in order to In this regard, it must be noted 5. Foundations of corporate or technological means alone will auditors in the development of a needed in the application of its be convincing to the management that the department should have governance and the training never be the key to success, no strong framework which enables policy and regulations. and the surrounding business a role in the search for such a of the staff, according to matter how abundant they are. the management to: community, should be: model of auditors, then a delayed their different levels, on its It might be said that senior role in the maintenance of its concepts and requirements. Therefore, good selection of Follow up risks in all departments managers are able to perform 1. Academically qualified by existence if it is serious about working cadres in the Department and on the company level, this task within their daily work. professional certificates the treatment and prevention of 6. Good and fair practices of the of Internal Audit is a key element Know the reasons of their Be assured, however, that this is future problems. policies and the applications in determining the extent of its occurrence, and Their impacts. quite difficult because the burden 2. Posessinging the following of human resources success in the defense of the of detailed daily operational and basic skills: The key to the gate of the company, and the guarantee to The internal auditor’s strong communication problems between • Communication and treatment and prevention is 7. Decentralization and delegation its sustainability, despite internal point appears when there’s a departments, problems in dealing presentation skills essentially in the hands of senior of authority. and external risks. In fact, it can need to control the risks.. By with suppliers, customers, • Report writing management, which must ensure be not only the first, but also the developing procedures for control banks, government agencies • The analysis of problems the establishment of a working 8. Training and development of last line of defense. and practices. The question is whether or not the CEO believes in the importance of Creating an governance and how strongly he or she is committed to board development. Trying to build a strong board without the CEO’s interest and Effective Board for commitment is like driving a car with the brakes on.

• Solid board development an Islamic Bank program. The concept of “board development” is not defined consistently in either conventional or Islamic meeting materials, and taking well-constructed board and banking organizations. minutes. This simple support committee agendas that A comprehensive board model is largely inadequate focus the members time and he board of an development program should today. The quality of board energy on key governance 30 Islamic bank is no include the following: performance is enhanced priorities. The board should 31 exception. In any • A constant process for by top-quality staff support. receive accurate and relevant bank, the board measuring the board’s For some board committees information (not excessive cannot perform its changing needs for – such as the audit committee and/or unanalyzed data) in role effectively if its members expertise. – independent advice and a timely fashion. They also doT not have a reputation for • An active effort to attract counsel by persons or firms require board and committee moral integrity and are not board members who can with direct responsibility to the agendas that are linked technically qualified. They meet those needs committee is very important. directly to key strategic issues must be aware of the risks • A well-planned orientation Board members and CEOs and governance priorities. and complexities involved program for new board who plan to have effective Effective board meetings should

in the banking industry. In members boards should evaluate their focus on matters that involve Articles an Islamic system ,they • A comprehensive, needs– interactive deliberations, must have the additional based board education rather than passive listening to qualification of being aware of all Islamic • An ongoing board The CEO teachings related to business and finance. evaluation process “ • A “governance committee” should be to take responsibility committed to The board, CEO and compliance and the corporate to oversee the board management team should values, vision and strategy development program. building a strong develop a clear understanding that will direct the activities of governance of the board’s role, the Islamic bank. The board • Adequate resources to responsibilities, authority and of Islamic banks, in particular, assist the board and its structure and organizational relationships. should set the “tone at the committees. practices. Hany Abou-El-Fotouh Lack of clarity and/or top” that establishes a culture It is not possible for a board ” misunderstanding of the role of high ethical standards, or its committees to function Director Policy & Corporate of the board often lead to integrity and professional efficiently without staff and existing infrastructure and Affairs/Board Secretary – CI governance problems. conduct. logistical support. Boards need be prepared to invest more Capital Holding good secretarial, technical resources to support the board • Clear vision, strategy and • Support and leadership of and consultative assistance. and its committees. Key features of Effective corporate values. the CEO. Unfortunately, in many banking Boards in Islamic Banks This should be done through The CEO should be organizations, support is still • Ongoing access to • Clear Understanding of rigorous and diligent oversight, committed to building a limited to scheduling meetings, important information. roles and responsibilities. establishing Shari’ah strong governance structure packaging and mailing Effective boards should have presentations. Moreover they should use “consent agendas” for routine items that require formal board action but no deliberation, and for which the essential information can be read before the meeting. Board meetings should not start with routine reports, which is often boring and a waste of the board’s energy. Effective meetings also minimize repetition of matters that can and should be handled at the committee level. Board committees can be designated to perform certain functions perform better than similar assign Long–term responsibility on behalf of the board as long banks with less engaged for building (or refining) a board as delegation of responsibility boards. development program to a and accountability are clearly standing committee (preferably a 32 defined. Suggestions for board corporate governance committee). members and CEOs Board development should be • Sound board culture. Boards who share a commitment viewed as an ongoing process. A Good board culture is to improving the quality of Relate the remuneration of characterized by proactive governance may wish to consider directors to their performance in engagement of its members, the following steps. They are the way required by Murabaha a consistent pattern of encouraged to initiate and contracts. The directors should constructive dialogue and complete a serious examination be compensated for their actual debate ,and lively decision of their board, including how it is expenses and not be entitled to making processes. Effective organized, what it does and how it a fixed fee. The remuneration boards should be inquisitive does it. To be useful, such a review should be a certain percentage and dynamic in carrying out should be close and thorough. of the profit made by the Islamic their fiduciary responsibilities. This requires a strong board bank, if the bank has made a Many boards have developed chairman and CEO leadership, the profit. If the bank takes a loss, a culture of passivity but they board’s willingness to look at itself the directors do not get a fee for should be engaging in active, objectively, and readiness to make their management services, as in independent and informed changes. Murabaha contract. This should oversight of the bank`s Directors need to reflect on their be clearly specified in the terms of business and affairs, including review findings and decide what the appointments of directors. its senior management. kind of board they want to have and what it will take to achieve Strong leadership by board All boards have a culture that vision. members and strong support from that has developed over Boards and CEOs should set the CEO and management team time and each culture has clear priorities and timetables for are essential. Effective governance many elements. Governance strengthening their governance. is rewarding in many ways, but it is cultures vary to a great The priorities and timetables hard work and requires sustained extent from bank to bank and for these changes should be leadership and organizational strengthening that culture practical; responsibilities and support. Boards that embrace a is extremely important to expectations should be clearly real commitment to continuous improving board effectiveness. defined, with specific target dates improvement and that invest the Banks whose boards are for progress reports and formal necessary effort will increase involved, interactive and recommendations. their ability to provide effective proactive are more likely to The board chairman should governance for their organization. to its direct branch customers, (MENAFATF). The MENAFATF but was unaware that the same provides similar guidelines and laws applied to wire transfers, for regulations to the FATF. which the Arab Bank Group acted as an intermediary. In addition Identifying and Defining to the fine, the Arab Bank Group Money Laundering was forced to turn their New York Money laundering in its most basic branch into a federal banking form is the attempt to conceal agency, prohibiting the Group criminal proceeds. Most countries from conducting wire transfers. recognize three different forms of money laundering: placement, The Arab Bank Group’s situation layering and integration. Placement serves as an example for the is the process of physically placing many challenges that institutions bulk cash derived from criminal encounter in their compliance activities into the financial system efforts. Egyptian financial institutions or legitimate commerce. Layering can use the points below as a guide (FATF) is an example of an is separating of the source of to remain complaint and prevent international organization that cash from its criminal origins by money laundering. plays a significant role in money passing it through several financial laundering prevention. The FATF transactions. Integration is the 34 The Global Significance of has issued two sets of money process of combining illegal funds 35 the Bank Secrecy Act (BSA) laundering regulations with with legally obtained funds and Passed in 1970, the BSA is intended international reach. The FATF’s providing a legitimate explanation Top Ten Things to protect financial institutions Recommendations outline the for its ownership. from being used as intermediaries basic processes and procedures to hide the origin and movement that institutions should follow to Preventing Money Laundering Egyptian Bankers Should Know of criminal funds. The procedures protect themselves from money The best method of prevention is and processes outlined in the laundering. The Recommendations to train all employees on the laws BSA govern everything from wire have been integrated and and regulations governing AML About the U.S. Bank Secrecy transfers to information sharing. implemented in countries all over with regard to their positions.

Compliance with the BSA is the world as AML best practices AML training serves as a twofold Articles essential for companies doing and even law. purpose in terms of immediate Act and Money Laundering business within the U.S. or using and future prevention of money U.S. currency. Egypt is not a member of the laundering. nowing the signs of money laundering and taking steps to ensure institutional FATF; however it is a member compliance to Anti Money Laundering (AML) measures can be a natural, beneficial International Money of a FATF-style organization Egyptian law requires institutions process for Egyptian financial institutions. However, the financial institutions that Laundering Standards called the Middle East and North to establish an internal system to choose not to educate themselves and not to comply with anti money laundering The Financial Action Task Force Africa Financial Action Task Force ensure compliance with money laws and regulations can face severe, and often expensive, consequences. laundering legislation, as well as a detailed system of reporting K requirements and what qualifies In 2005, the Arab Bank Group was operating a branch in New as money laundering. received a 24 million dollar fine York at the time, was charged for after failing to comply with AML not reporting suspicious and/or Importance of Customer regulations. The United States large transactions, as required by Identification Office of the Comptroller of the BSA. The fine was imposed Customer identification processes the Currency (OCC) and the shortly after the OCC ordered the included in the BSA, and most United States Financial Crimes Arab Bank Group to take steps other global AML regulations, Enforcement Network (FinCEN) to preserve asset levels, pay off assist institutions in recognizing found the Arab Bank Group depositors and improve internal both a customer’s normal business guilty of violating the U.S. Bank money laundering controls. The activities, and conversely, Dr. Linda Eagle Secrecy Act (BSA). The Jordan- Arab Bank Group claimed that it highlighting attempts at suspicious based Arab Bank Group, which applied appropriate AML controls transactions frequently conduct non-face-to- face transactions.

Egypt’s AML laws stipulate that extra caution must be taken by Egyptian banks when conducting business with high-risk customers. In addition to high-risk persons and entities, some relationships in certain geographical regions are considered high risk. Conducting business with institutions that lack adequate AML procedures or governments with unstable financial systems pose a threat to Egyptian legislation outlines standards and educating the the bank. requirements for Know Your public and financial institutions Customer (KYC) programs regarding money laundering. International Cooperation which dictate the mandatory The fight against money laundering documentation each customer Foreign Relations Risks has evolved in recent decades 36 and/or entity must provide in The BSA restricts U.S. financial due to an increase of cooperation order to conduct business with institutions from establishing, and information sharing between the institution. maintaining, administering or nations. For instance, when FinCEN managing a correspondent receives a report of a suspicious Reporting Money Laundering account for a foreign shell bank. transaction, the information in Egyptian law requires suspicious Institutions must also ensure that report is forwarded to the transactions to be reported that accounts held with foreign appropriate authorities for further using a Suspicious Transaction financial institutions are not investigation. FinCEN can also Report (STR). STRs must include being used for criminal or illegal receive a request from a foreign certain information including the purposes. entity for information regarding nature of the transaction and suspicious transactions. parties involved, as well as how Similarly, Egyptian financial the suspicious transaction was institutions must abide by this In Egypt, the MLCU receives detected. STRs assist governments regulation if they have branches in and shares reports of suspicious in criminal prosecution purposes the U.S. or relationships with U.S. transactions. If the MLCU receives by providing clues to the evolving banks. In general, when starting a a request from a foreign entity patterns of money laundering relationship with a foreign financial regarding a money laundering schemes. institution, it is vital to ensure that report and if Egypt has an the institution has adequate bank agreement with that foreign entity, Reporting Bodies secrecy and AML regulations and the information is shared. In most countries, STRs are sent is compliant with those outlined to reporting bodies classified as by its country’s government. Money laundering continues to Financial Intelligence Units (FIUs). evolve with the financial climate. The job of most FIUs is to receive, High-Risk Relationships This evolution must therefore be analyze and distribute reports of High-risk customers pose a reflected in the laws, regulations suspicious transactions to various heightened risk of money and guidelines that govern. It is government regulatory bodies. laundering due to the types of vital for financial institutions to transactions they use and the understand their domestic AML Egypt’s FIU, the Money Laundering type of business they conduct. requirements, as well as the Combating Unit (MLCU) is charged Examples of high-risk customers legislation regulating AML in the with not only the basic roles of an include Politically Exposed Persons countries with which they have FIU, but is also responsible for (PEPs), non-residents, private relationships. Education continues creating customer identification banking customers and those who to be the best form of prevention. the board to deal efficiently with and the risks associated with each information directly from the bank’s the management. of them. executive departments, including In a number of banks that failed There was also a reference to a a plan to provide the board with due to the crisis, there was a study prepared by the INSEAD full information as well as ways to Banks’ BoDs clear weakness in the selection of University, France, on the German check the information. In addition, independent board members such banks affected by the crisis while this should be submitted in a form as the selection of unqualified taking the nature of ownership of which serves and helps the board, and the Financial Crisis celebrities or the elderly (over eighty these banks (public/private) into provided that this is excessive in years of age). The nomination of consideration. The study found size, nor less than necessary. independent directors was often that public sector banks have been One of the important observations left to the CEO, who was not keen more negatively affected because made by some former bankers at on the nomination of independent, of the lack of seriousness of the the meeting was that the current qualified members. Therefore, a board members and also because crisis could have been avoided more positive role must be played their qualifications were less than if new bankers had been more by shareholders and investors in their counterparts’ on the boards aware of the lessons learned from order to control banks’ activities of private banks. the experience of the thirties of and to question the accountability Experts agreed that there was the last century: Not to use any of the board. a clear imbalance in the risk complicated financial instruments management systems applied in or products and to rely on cash The chairman of the board plays banks that were hit by the crisis, and not on liquidity. Also, centers 38 an important role in the success to the extent that, in some cases, of directors are responsible for the 39 or failure of any bank. In a study risk committees in those banks provision of appropriate training by “Nestor Advisors” on the met only three or four times a programs for banks and all relevant performance of the governing year, while financial institutions parties, in order to provide an bodies of 25 European banks, that went beyond the financial integrated governance system. it was discovered that banks crisis had good policies in risk The meeting discussed in brief the headed by experts in the banking management. Risk committees of experience of Brazil, where the law industry resulted in much better those institutions sometimes met requires banks to establish audit results than those headed by non- twice a week before and during committees with most members here is no doubt that the global financial crisis has been a shock that strongly wobbled specialists. It is obvious that a the crisis. In this regard, auditors’ from outside of the bank’s board, the thrones of many venerable banking institutions. We have seen in recent months bank’s chairman has to understand competencies and capabilities where the average number is many of the repercussions of that crisis, such as changing the ownership structure of all financial products provided by should be built to be able to audit eight members, including from some of those banks and government intervention to save others. The world is still the bank and the degree of risk and comment on the performance one to three members from the learning the lessons of this crisis, which will inevitably affect this vital industry forever. associated with each of them. of corporate governance and risk bank and the rest from outside In an attempt to draw lessons from the current crisis, and also to develop some guidelines to avoid Though to separate between management, and not only on the the institution. The committee

Tsimilar crises in the future, the Global Forum for Corporate Governance held the first meeting of the Chairman and Managing Director financial statements. It was also shall have the right to directly Corporate Governance Consultative Group set up by the Forum to discuss the implications of the financial crisis on banks. is not always the optimal situation, stressed that risk management and contact the auditor in case the The meeting was attended by 24 corporate governance and banking experts worldwide. Egypt had it should be understood that the governance is not only a function board did not respond positively the honor to attend this conference and was represented by the EIOD and the Egyptian Banking managing director may become of senior management, but there to the committee’s warnings. This Institute. Since this meeting was the first, talks touched on a wide variety of topics in order to be the Chairman of Board and not is a need for training middle is contrary to the experience of discussed at the meetings to come. the other way around. As for the management in banks because France, which prohibits the use non-executive board members, they have a role in application of any bank from outside the But there were many lessons the decision-making process. they must become familiar with and in warning of malpractices in members of the Governing Council which have already become clear By: In addition, cooperation and all laws and regulations governing many cases. of the committees for review. from these discussions, which Ashraf Gamal El Din communication between executive the work of banks, and they Importance of information took largely focused on the boards of management and the board is must understand their duties and a good part of the participants’ Finally, there was a consensus directors. The entire audience essential to the success of any responsibilities. Furthermore, the interest during the meeting where that an obvious mistake being agreed on the importance of functions. New members of bank in predicting a crisis and banks’ audit committees should it was agreed that the board made during the current crisis is careful selection of members of the board must also be given dealing with it. This does not play a vital and important role in could not be left to the mercy of that countries and government banks’ governing bodies who have “Orientation” about the bank, diminish the importance of a good the verification of effective internal the executive management in the are focusing on legislation and the appropriate expertise, as well the nature of its work, products, regulatory system, and specific control systems, therefore they determination of what information issuance of governance codes while as the seriousness and enough branches and so on in order to performance indicators for must be aware of the technical should be obtained. There should neglecting control of the proper time to carry out membership be able to contribute effectively in executive management to enable work of the bank, its products, be mechanisms for obtaining the implementation of those codes. General of the United Nations, Role of Banks: Kofi Annan, launched an initiative which aims to activate the role of corporate social responsibility in the community. It was called New concept for an old meaning the Global Compact and includes a set of 10 key principles which perpetuate the concepts of cooperation between the business sector and the communities in which they operate.

Banks and financial institutions in general, in the framework of this system, are to play a key role in the service of social goals alongside the economic goals. The increase of profitability while maximizing the equity rights of shareholders of a employees in addition to the appropriate quotas for social bank or a financial institution (the surrounding environment of the finance. This may be done through 40 owners), assists the achievement workplace and the community as the imposition of legislation or the 41 of comprehensive development a whole. Thus banks and financial enactment of certain laws, for and influences the ongoing, institutions (such as insurance example, long-term and desired goals and companies) are believed to have taxes and duties. The development objectives. The change in the more responsibility compared to of tax legislation could allow either ocial work and corporate social responsibility concept of the responsibility of commercial or industrial companies. certain exemptions or reductions are, for the State, civil society and various banks and financial institutions has of taxes and fees, could encourage economic entities, new concepts of old resulted in the recent emergence There are important indicators banks to contribute to social meanings. Since the start of human existence, of social responsibility to be used to identify the success of work, or could lower interest rates man has looked to the future, but found only on the same level as economic a bank in fulfilling its role of for financed social projects. In co-existence and cooperation with others as a basis to responsibility. Similarly, the concept achieving the overall satisfaction addition, attention is directed to Sensure continuity and survival. This was the beginning of of representation of interests, of the community, including the the Social Fund for Development social work and concerted efforts of individuals, formed which emphasizes the responsibility shareholders, in order for the bank and its very important social role with the emergence of communities and evolved with the of the Bank’s management to take to become socially acceptable. in financing SMEs to contribute development of civilizations. With the advent of religions, into account the interests of many These indicators include, for to the eradication of the most

social concepts became more developed in detail. The parties, has evolved. New ideas example, an employment index, negative phenomena---high rates Corporate Governance holy books are full of decrees that urge us to help others. include responsibility which measures the labor of unemployment in developing Christians, for example, are taught to “do unto others to clients turnover and absentee rates and least developed countries. as you would have them do unto you”. Islam focuses on a n d as well as cases of delays and social integration through the adoption of a set of religious injuries. The community index Financial institutions are responsible “giving”, such as endowment, Zakat, and charity. measures the added value and for long-term investment, a field in the level of societal improvement, which private sector companies as well as measuring the ratios may be reluctant to be active and “Help one another in al-Birr like multinationals, it has become of the exhaust, noise, and waste, where there may be a part of its Mohamed Tarek Youssef and in al-Taqwa (virtue, necessary to develop criteria other and so on, and the impact revenues from long-term investors. righteousness and piety): but than the standard of profitability on the climate and Housing projects, for example, Assistant Secretary-General Arab Organization for Legal do not help one another in sin through which companies the environment and most of the old buildings Accounting Experts and transgression”. (Quran- might be evaluated. The most surrounding the in central Cairo are owned by Secretary-General – Arab Tax Surah Al-Maidah, Verse 2) important of these are ethical workplace. insurance companies which lease Society and behavioral standards, without units to individuals, families and Board Member - Egyptian Society of taxes With the intricate development of the abandonment of profitability The State should businesses, a matter which could, Fellow, Association of Egyptian interacting global bodies, such as goals. In the late nineties (20th e n c o u r a g e if well-planned, contribute to the Accountants and Auditors the emergence of giant entities century), the former Secretary banks to allocate solution to housing problems. indicators. First, a low trading Orascom Telecom Selling wave dominates: volume is anticipated during the The problem between Mobinil and summer holiday season as well as France Telecom had a negative with the holy month of Ramadan, impact on the market where the and yet it is expected that stock’s performance fell by 5.5%, main index fell by 12.5% consumer spending will increase with a general sector decline of Data stand until mid-July during this period. In addition, more than 17%. there is an increased volume of Talaat Moustafa Group (TMG) wave of substantial and progressive selling was expectations and raised fears of a real estate and related activities-- Expectations are that the stock recently witnessed by the Egyptian market. repeat of last February’s decrease? some groups of investors tending -all of which is reflected positively might improve at the end of its Last February recorded a selling high at Here we will try to answer these to waves of selling. in the overall economy which association with the court case of 3389 points, but the peak was 6379 points questions. Perhaps the end of the second will also continue to respond to Hisham Talaat Moustafa, causing in mid-June. Though this action raised some quarter of fiscal year 2009 will fluctuations in world markets, a rise in share price performance eyebrows, many analysts were optimistic in light of the Market bounce bring an important impact on especially with the continued in the real estate sector by 11%. Asuperior performance in most markets in the region. Most economists agree the reasons the domestic market as well as publication of conflicting economic behind this decline in the Egyptian foreign markets. There have reports. Also expected during the Gainers market in June may be attributed been expressions of expectations month of August is a final decision Real Estate Bank (95.91 83.3%) However, there are no estimates to both public and private following the completion of the in the trial of the former president National Housing (39.6 79%) for such a dream to continue sources. During the month of June, imposed credit settlement, with of Talaat Moustafa Group - Egyptian Real Estate Group (34.7 based on a set of technical apprehension among investors the injection of funds to add something that may affect the 61.5%) 42 indicators in addition to the prevailed towards the rhythm of additional pressure while the mood of investors in the the size Losers 43 developments in the general economic recovery, particularly with market is struggling to remain and quality of transactions. Eastern Tobacco (113.03 50.48%) economy as well as some the emergence of successive negative above the levels of support. Pioneer tourist (98.09 43.8%) unexpected events locally. reports on the volume of industrial Checkpoints during July Orascom Development (37.4 30.7%) Considering just two: The production and consumer confidence Expected in August EFG - Hermes The most active sectors owner of a major real estate and unemployment rates. Emphasis will be put on the results This company, ranked first among Real estate: 4.7 billion Egyptian group in the country, Hisham of the second quarter of the year, counterparts from companies trading pounds. Household Products: 3.1 Talaat Moustafa, is involved The Dow lost 7.7% of its value that time being seen as a crucial in securities of Egypt, issued a report billion Egyptian pounds. in a much-publicized murder before recovering again on the element in determining the steady indicating that the market declined Communications: 2.6 billion trial. Also, there has been the third day as the result of the economic recovery with positive 1600 points since peaking in June. Egyptian pounds. problem of Mobinil vs. France with low rates of inflation and cuts outcome of the second quarter Telecom. It seems only natural in the interest rate. It should also of 2009. This positive measure that a large combination of factors be pointed out that the majority helped to allay some investor assisted in the corrective process of expectations and evaluations concerns, though we are still of the market-which has indeed indicate an improvement in the dealing with some suspense and happened already! financial performance of the major caution in the atmosphere. The impact of the global financial Egyptian companies. Since it is At the level of public economies crisis has been made clear through known that the components of the there has been a change in some of the indicators as reflected overall economy play a role in such the composition of investors in the economy: rates have assessments, it can generally be and the impact of depth on the been declining in foreign direct said that the investor still retains performance of the market. By investment (FDI), in some cases his confidence and hopes that this is meant that the continued by as much as half, and increased things are bound to improve. recovery and strength of the the balance of payments deficits market depends on the continuity and, consequently, continued low Closer look at market trading of the same pattern of behavior volume of foreign investments What was the main concern of for investors. However, we find in the Egyptian Stock Exchange. market analysts in determining that Arab investors do not hesitate With volume given as around 6 whether the market had been to draw the market down without billion Egyptian pounds, this is seriously weakened as a result of having given an opportunity seen as small compared with the the current spate of events? What to other investors from other same period last year. But what has caused the market to alter markets. Thus the sovereignty of provides some optimism is that the prevalent trends seeing that such the debugging process has been growth rates of GDP began to rise dramatic levels exceeded most affected, with the addition of Gift from the Ministry of Investment to Cairo University Originally to be sold through facilities would include a section for public auction, contributions By: translation and printing, language made by university professors Mostafa Abdo learning as well as locations The land of Al-Ahram Beverages .. for the purchase of the land, as for access to and utilization of well as the collection advanced technology. of 5 million pounds In addition, plans scientific research center in contributions from include establishing a all strata of society, hotel for the reception enabled the auction of delegations and Launching a campaign to donate ... and corporate social process to be stopped foreign guests; and the land was completion will take responsibility is now part of the culture of bought at a nominal two years at a cost of price. It was bought 200 million pounds. from the Holding The second phase Company for Tourism includes plans for a who donated the right home for hospitality of access to space for for special guests the University of Cairo such as visiting 44 for 99 years. Part of professors and some 45 the ministry’s contribution for administrative buildings. In this gift was a pledge of 5 million addition, there will be a much- EGP for assistance with financial Dr. Hossam needed 4500-space parking expenses for a large consulting “ garage to help eliminate dense office specializing in design of Kamel: the traffic and parking problems on Canadian universities. the university campus as well as application of facilitate movement of faculty Involvement by the Ministry of modern concepts members. Investment was essential since of the educational

the land was to be used in a The third phase is characterized by The Deal plan to benefit the University process is what flexibility of design and purpose, by the establishment of an we aim to. according to new requirements and institution to serve the Egyptian ” needs as accessed for the general community at large. Dr. Mahmoud extension of the University. As Mohieldin directed research on much as 30% of new development the legal procedures necessary the university, has said the plan for allows for green and open spaces for investigating proper use of this land “Bein El Sarayat” consists for planned student activity. the land by the University of of three phases. In the first, a Cairo. Once studied, the Minister scientific research center will be The university’s president asserts announced the establishment developed where each of the 150 that, in regard to the establishment of a non-profit, founded under units will be of special character of a hotel, garage, research the auspices of the Ministry of to enable transfer of older work centers, and the other facilities, Investment and with the support units from within the old campus the university seeks to absorb of the public enterprise sector directly to the new project, thus and apply modern concepts of the companies as well as civil society eliminating some sources of educational process that go far he Minister of Investment recently attended the dedication of a large piece of land organizations. These are all aimed congestion in the university. beyond the traditional concept of to Cairo University. Located adjacent to the University, in an area referred to as at improving the quality of life and The establishment of a Convention education as existing only in lecture “Bein EL Sarayat”, the piece of land consists of 30,253 square meters. building community capital within Center with its many uses, such halls and labs. This new concept poor communities and slums. as documentation, could employ also presents the modern theories T Dr. Hossam Kamel, president of as many as 500 people. These of urban planning based on the use of land on campus. Academic such as the Center for Community specialists from the faculties of volume of foreign investment and villages located near the university use is only one of a number of Service, Research Center for Engineering and the College of growth in the volume of exports will begin a transformation into a possibilities based on a package Development and Planning Urban and Regional Planning. by more than 50%. model community/village. This of applications. Proper utilization the Center for Technological They have put forward issues will be accomplished through a of the campus design must also Research and Environmental for discussion at the Council of Everyone involved must work series of projects funded partly by include the cultural and social uses Studies and others, a total of 16 the University including a general hard to approach the target of the World Bank which will begin (such as a student union building centers. These centers or colleges trend to guide the major users of quality standards in international by upgrading the health of the and social hall), and services (such of the university will number the buildings and campus spaces. competitiveness of higher population, their environmental as restaurants and cafeterias). approximately 150. These centers Presently, a student’s ongoing education at the local level and awareness on topics important Presently, these are confined in are currently located within the Dr. Heba Nassar, Vice President costs are covered through the international standards. She to their lives, the organization the current university to a surface college facilities, both within the of the University for community exploitation of parts of other commented that authorities should of literacy campaigns and the area of only 500 square meters, campus or its annexes. service, has agreed to launch payments, but this situation could take advantage of what has been elimination of unemployment. while the actual requirement in a campaign next month in be improved upon establishing a learned from the plan carried These will all contribute to overall accordance with the rates of the He explained that the philosophy cooperation with the Ministry system for a full-cost entrants. out by the American University productivity throughout the latest Global design, 3360 square of the planned transfer of research of Investment and the Egyptian Other distinct objectives of in Cairo, where the financing of community. meters are needed, not including centers outside the university is civil society. This campaign that study aimed to encourage its new campus has encouraged special services and facilities based on three grounds. First, will encourage businessmen to universities in the conduct of individuals to contribute to the Other professors from the various as well as roads and parking the transfer of research centers, participate more and contribute to active scientific research through construction of their new campus. areas have praised the successful 46 spaces. Another appropriate which occupy several thousand the completion of the project. It the provision of scientific programs This has been a basic tool in experiences of the university, 47 example is the current parking square meters, will free that space was also noted that the university and research designed for a the promotion-that is, the right such as cooperation with the space available on campus, which on campus for the surrounding will contribute through its own number of outstanding students, of the donor to have one of the Social Fund for Development to can accommodate (according to colleges, resulting in a possible resources and contributions that distinguished researchers and university buildings or facilities train and upgrade the skills of the specialized studies) only about increase in the academic bodies of have been collected and added qualified staff. named after him for donating to students and the financing of small 1730 cars whereas premises to the university colleges available. to the contribution of the Ministry the establishment. The university projects. Note has also been made accommodate about 3400 cars An example would be the required of Investment and the start of Information Technology identified the value of funding for of the signing of a memorandum per day are needed. It should be numbers of current and future the first phase of the project. All Dr. Nassar noted that the study each component of the facilities of understanding with the UNDP noted that the planned garage, in students for either university or authorities are now studying how underlined the need for Egypt at of a new university campus and to achieve the Millennium Goals. accordance with the vision of the graduate studies. In addition, to implement this campaign and this time to pay attention to the provided this in detail for those In addition, cooperation with

project is an underground garage the provision of improved climate will be identifying the best method revitalization of high-tech exports. wishing to contribute to it. the Arab Banking Institute for The Deal and not a multi-storied building. and environment-friendly facilities to use in order to achieve positive She remarked that expected the training and recruitment of is essential for the growth and results quickly. revenues for this is could Community participation students was mentioned. Dr. Heba The importance of the role of development of these research generate significant economic She said she has made several Nassar invited all the institutions president of the university in the centers and the future in an Dr. Heba Nassar, before taking opportunities and distinctive work proposals to fund the construction of civil society and business to service of the university community, integrated manner. It is anticipated the post of Vice-President of the for these centers, many economic of new land and found that the support national projects that (education sector, students and that at the highest levels of University, had prepared a study benefits, as well as supporting most appropriate solutions are contribute to the development of the postgraduate studies and academic, scientific and technical on the development of alternatives sectors such as information and business initiatives as well as the society and the upgrading of the research) has expanded into the levels, an area of 25 thousand to land use and the expected communications technology. She contribution of sectors of civil nation’s human resources. community service sector. Within square meters of buildings may proceeds of such exploitation on also pointed out the need to society. This would include any the development environment, in be utilized. These research the basis of the establishment support the human element in relevant partnership between the For their part, many professors addition to its community, it aims centers will exhibit respect for the of two distinct areas. It will be this sector so that they can catch public and private sector to provide said that the project is especially to integrate the research process principles of the economics of the necessary to achieve the required up with developing countries public services such as security, appropriate for the renewal of a and the educational process. assembly, which will contribute to standards in international ahead in this area, such as India waste collection, in addition to the sense of belonging and national This planned development on rationalizing the use of services information and communication and the Philippines. There has contract for the establishment of spirit for all. Long ago, Previously the new land will be a full sector and infrastructure required. technology before proceeding. It been an estimated annual growth investment projects. Princess Fatima donated her of the University of Cairo, plus a was noted that the establishment rate in this sector in Egypt of 20% jewelry, money and land to build group of centers and research Emphasis on the new vision of more central facilities would contributing support to the public In a new experiment which a university, a giant entity called units. Like the present campus of and the current requirements reduce the pressure on colleges, treasury in the amount of 28 billion the university will carry out in the University of Cairo which the University of Cairo, there will of the project has contributed such as creating a supplement Egyptian pounds in about two cooperation with the Bank of Egypt became a beacon for learning for be direct centers of the University, to the formulation of a group of to the city>s student housing. years. Already seen is a rise in the next month, a selection of poor all. distress that he was forced to sell his furniture before getting a job repairing TV sets in the workshop of Haji Abdul Al Raouf (1966). He was very proud of this period, later telling friends about the lessons learned during those dark days. The first was that each person is composed both of evil and good, and we must be intelligent enough to deal with the good part of every human being to balance what occurs throughout our lives. The second lesson was the necessity of variation of investments in graduated in 1960. Prior to 1952, knowledgeable in the computers preparation for such events as specifically at the age of 14, he had field, especially since the company nationalization, which happened Mohamed Nosseir dreamed of becoming a politician had branches in Arab countries, in the sixties. because his father was a member such as Libya and Kuwait. of the House of Representatives Out of impasse 48 as well as the Constitutional No travel From 1967 to 1972 he established 49 The man who led Egypt into Liberal Party. Naturally, daily In the sixties Nosseir was banned and managed the Computer conversations at home dealt with from going abroad for a period Center of Al-Ahram newspaper as politics and political issues. But of twenty months because of mandated by his close friend, the age of information technology after the Revolution his dreams his relationship with one of the great writer Mohamed Hassanein turned to the world of business. key men in the revolution, Abdul Heikal, who had helped him through He started this career at the age Latif Al Baghdadi (known as “Al the banning crisis. After that he of 18 when, as a first year student Baghdadi with a magic wand”). worked in many diverse areas at the Faculty of Engineering, he Charges were fabricated after he such as oil and shipping. Indeed, bought a small plot of land in El arrived from London on his way oil was one of his first investments A volunteer for the October War with a Marg area. He grew cabbage and to Doha for the completion of a to place him among the rich, raised a small number of buffalos big business deal. Some of the when the price of a barrel of oil picture of Nasser in his pocket to trade in their dairy products. persons around President Gamal increased in 1973 from 2 dollars Tasks for this project had to be Abdel-Nasser were afraid that to 14 dollars a barrel. He began

completed during the early hours Al Baghdadi would get close to in 1974 to work full time on his Special Celebration of day, so that he could attend the Nasser in one way or another. His ealth might An engineer who grew up in a never ending wars throughout his first University lecture at 9 am. guilt was said to be for “the be destined, very politically aware family, he life--- from bankruptcy and a ban For his 1960 graduation project as overthrow of President but success was obsessed by “business” even on travel in the sixties, until the a telecommunications engineer, Abdel Nasser, through certainly does as a young man. He began his last moment of his life in his latest he devised a system of telephone contact with the not come by career at the age of 18 with the project for the implementation of networks for lines between Cairo enemies of the chance, particularly in areas purchase of a farm at El Marg. the Cairo Financial Center, known and Alexandria and which would regime”. After Wthat are related to wealth and Though he graduated from the as Citadel Towers. also feed Lower Egypt and Tanta. that, Nosseir influence. Competition may college of engineering with Naturally, the project received an was exposed become conflict, and either excellence, he was not ashamed Raised to be a politician “A” grade. to such gain or loss could ignite war. of working at a TV maintenance Mohamed Nosseir was born in fi n a n c i a l Involved interests often do workshop in Bab Ellouk; he was Cairo on the first day of September, After graduation not accept but one outcome. the first to introduce computer 1937; in 1954 he completed Directly after his graduation at The life story of the late sets to Egypt. He became the his secondary education at El Faculty of Engineering, Nosseir businessman Mohammed key Egyptian partner in Vodafone Noqrashy School, and then was one of the first Arabs to work Nosseir is a living example of Egypt Co., the owner of Alcan joined the Faculty of Engineering, in the U.S. Company IBM. The this idea. Group Holding, and official agent Communications Department, at company discovered its need of Renault and Kia. He fought Cairo University, from which he for an Arabic-speaking person empire and established “Alkan”, privatization deal in the history of that he was able to serve his at all, come and see for yourselves. businessmen in the media, saying, governorate, and Community taking advantage of the open Egypt. He received the company country through being a financially The highest place in the project is “It cannot be denied that there Development Association of Um economic policy initiated by with its 4000 workers and soon successful businessman working much shorter than the length of are a number of businessmen Dinar. The development plan President Anwar El Sadat after added another 1100 workers. on his own and not being served the fortress wall”. accused of corruption, but those of action includes awareness the October war. This group even His role in the birth of the idea of by a system of loans controlled by are exceptions. There are honest programs on reproductive health, now is on top of the Egyptian and privatization was immeasurable others. The Citadel Tower is a project to businessmen who are keen to how to protect the environment, Arab economy pyramid, including in the ensuing battles because establish a residential tower in the serve this country, and the media as well as ways to educate young under its umbrella many diverse of the lack of awareness of the Citadel Towers middle of the distance between the took advantage of a small group people about how to create companies, such as Alkan Telecom, importance of privatization. He The late Nosseir was a stubborn two most important citadels in Egypt. of businessmen to distort the employment opportunities and which has branches in a number whole-heartedly supported the person who defended well the The first is Mohamed Ali Pasha whole image. I constantly go to disadvantages of drug abuse. In of countries, including Sudan, principle of sale of government causes he strongly believed in. Citadel (registered monument No. the Qasr El Eini Hospital to assist addition, part of the plan included Kenya, Libya, Iraq, Saudi Arabia, holdings and privatization. When there was controversy over 455), established at the summit of the poor and the needy, I help changing the drinking water and Algeria, Burkina Faso, Sierra Similarly, he opposed government his hotel project in the citadel area Mount Mokattam in 1810. The second every poor family around my sanitation network in cooperation Leone, Niger, Dubai, Oman and intervention in industrial and he did not weaken or fail in front is on the face of Mountain Citadel house, and I am the guarantor of with the governorate at a cost of Madagascar. There is also Alkan commercial matters, often of the false accusations against (registered monument No. 556), four thousand families of workers about 3 million pounds. The first for Spinning and Weaving, Alkan remarking that it would be the him which had been raised over which was established by the Sultan in my companies”. stage of literacy already began Construction, Alkan Air, Egyptian private sector mentality which the years. He was prepared for the Al-Nasser Salah al-Din Yusuf ibn with the opening of 20 classes for International Automotive, and would create a competitive case and welcomed the People>s Ayyub between 1176 and 1207. The Helping Others adults, while the three existing the Cairo Financial and Touristic trend and capabilities for more Committees at the project site to project was approved by former Prime Mohamed Nosseir was the schools have been upgraded and Center. Mohammad Nosseir also innovation. see the work for themselves and Minister Atef Ebeid on 25/10/1999, in main sponsor last year for the their first computers provided. 50 founded the Egyptian British decide whether he was in any way the early days of his appointment as 32nd Annual Cairo Film Festival, Furthermore, a system of daily 51 Businessmen’s Association in Mobile harming Islamic monuments and a PM. providing the artists and cinema cleaning and recycling the order to promote Egyptian exports As early as 1991 Nosseir proposed antiquities. He even requested that industry with a beautiful and refined remnants of the village fields and open new markets in the the first draft of a mobile telephone the Egyptian Ministry of Culture Nasser Picture show that earned the event much is being set up. This is based UK, as well as to compete more network, but circumstances did not bring a Commission of UNESCO Mohamed Nosseir asserted during international praise and acclaim. on certain kinds of agricultural effectively in the global market. support this bold idea. In another at his own expense. In the end, an interview with “El Bait Baitak” crops that can be used to create He chaired the board of directors tender extended in 1994 he joined he accepted its opinion and final (Make Yourself at Home) talk Mohamed Nosseir also created feed for animals. Meanwhile, the for many years. with 33 other companies to make say in his case and implemented show, that the July 1952 revolution and implemented a variety of health unit has been upgraded the proposal again, but that architectural modifications as was the first step in the prosperity charities, one of the last being by providing a number of new Computer and Internet tender was also not completed. recommended by the UNESCO of the Egyptian economy. For that the adoption of the idea of medical devices as well as more Mohammad Nosseir was the Nevertheless, four years later there Committee, costing him millions reason, he declared, “I am one of developing the Um Dinar village. doctors and specialists. The youth first to introduce computers was another one, and Vodafone of pounds. All this he did so Gamal Abdel Nasser supporters. In collaboration with the Board of center has been upgraded to make and the Internet to Egypt and Egypt was announced as the that no one could say that his I served in the October War and Directors of Alcan Holdings, the it more appealing. Certain loans Lebanon, installing the first four country’s second network. It was project resulted in the distortion volunteered to cross the Canal, Rotary Club, and the Governor of have been provided for needy

computers in Egypt to be used in the habit of Mohamed Nosseir to of the ancient citadel area. and set off towards Israeli positions the Sixth of October City, a plan women in order to begin their own Special Celebration planning activities and also in the establish projects and then sell Nosseir asserted the importance with the image of Nasser still in for the village development was businesses. Similarly, 100 families management of post boxes. This them because he focused on the of setting up the project, which my pocket”. As a businessman, he adopted at the local unit of Kafr were selected after careful study, to very successful initial project was idea until it became a successful faced considerable opposition offered advice to young people, Hegazy at Imbaba County, Sixth of be given 1000 pounds to establish especially important because of accomplishment. “After that,” as due to its being considered as not saying: “To work in any profession October Governorate. Located on their own businesses. the large number of participants he frequently stated, “I always find adding value to the area, seen as is not wrong, hard work being the an area of 900 acres, the village is involved. After that the projects that there are people who can run the center of the most decent and first step to success, and rapid comprised of about 3200 houses, Mohamed Nosseir, the great came fast and got larger. Computers it better than I can.” This happened historical Islamic monuments in profit is a gift from God. Exerted and 25 thousand people. Issues businessman, died on May 22, were introduced to Alexandria several times, most recently with Egypt. Critics also declared that efforts are more important needing attention included 1500 2009, after battling cancer for University and Cairo University. his Alcan Pharma, which was sold the proposed location, directly in than strokes of luck.” He gave illiterates, 2500 unemployed, 1000 many months. His last three Through competitive bidding, to a Jordanian group, and he also front of the citadel, would block a personal example, describing needy women, 500 widows, and months were spent on a medical he obtained the first license to sold Vodafone. Mohamed Nosseir the view. Nosseir explained that his idea during his college days 300 orphans. Most villagers work trip, moving between Britain install telephones in cars in 1986- was a member of the NDP, but such a project was designed to establish a company for in agriculture, specifically about 17 and Germany, where he died. -the number of participants soon he was not interested in working for the benefit of Egypt, and he waste collection in the district of thousand farmers who constitute He leaves his son, Khalid, the reached an incredible 16 thousand in politics or entering any PA expressed strong dissatisfaction Zamalek, but he feared attacks by 70% of the total population of the responsibility of managing his subscribers. By the early nineties, elections, being totally focused on and disgruntlement to those who “scavengers” in the region. village. Village problems occurring giant business empire, especially when he purchased Pepsi-Cola at business. He believed that politics oppose the establishment of the since February 2007, were after his daughter, Aliaa, chose to EGP 157 million, he thus became should not be looked at as some project. He declared that, “The Nosseir also once commented surveyed in collaboration with move away from business into the responsible for the first complete sort of protection, and believed towers would not cover the citadel on the frequent attacks on the Rotary Club, Sixth of October art and engineering of decoration. Efforts are being made to one that is not within its scope of open new CSR channels and By: work. Once the company has been create opportunities for more Dr. Nader Nassif identified, the NGO should take partnerships between NGOs or a deeper look into its structure. CSR Partnerships: Private Sector/ Corporate Social the public sector and the private What is the company’s CSR sector. Organizations such as the Responsibility Team Leader agenda and track record? Who Egyptian Institute of Directors are they currently working with Getting a Head Start to a Meaningful End and the American Chamber of and why? Which of the NGO’s Commerce contribute to these activities would benefit the efforts by holding conferences, company and how would the workshops and other events NGO benefit as well? Once all in an attempt to spread of these questions have been awareness and understanding answered, a proper proposal about CSR, create networking should be developed, taking opportunities, and provide into account everything that a middle ground for match- has been uncovered during making between all involved the research phase. If the stakeholders. NGO does not have sufficient capacity in proposal writing, it When it comes to CSR, it should seek outside assistance 52 is clear that the roles of and perhaps outsourcing and 53 NGOs, the public sector, and the business”, they should actually additional capacity building for private sector will not change think like a business. For example, the future. in society. It is by nature that a one of the major challenges corporation will want to make a facing NGOs today is the lack of Corporations, on the other hand, profit and for an NGO to want to know-how before selecting and will look for NGOs that have raise funds for the execution of approaching an organization. strong skills, strong links with the development activities. What can Sufficient research and background community, sufficient resources, a and must change are the negative checking are necessary before highly active profile, and a shared stereotypes that they have of each contacting potential partners. vision. Corporations should not other. How can those images be An NGO should put itself in the be passive; they should keep an changed and improved? How can company’s shoes and ask: what open mind and look for potential a healthy environment be created does a private organization want? opportunities. Risk will always and nurtured? What is needed is Their needs and concerns should exist; corporations should not neutral and middle ground upon be anticipated before presenting look for or start a partnership which all sectors can operate them with a proposal in order for with an attitude that it will within their traditional roles, while the company to realize that this fail. It should, however, work at the same time finding ways approach was carefully planned with the prospective partner to to engage in CSR partnerships and well thought out. diminish any factors that may

in order to maximize efforts, cause failure before beginning a Corporate Social Responsibility resources and benefits to society. An NGO should also adopt certain project. The combined effort will orporate Social Responsibility (CSR) in Egypt is still in its early stages. Although selection criteria when considering increase the success rate of the its evolvement has reached beyond the budding stage, the concept still has no In reality, NGOs can be reliable a corporate partner. NGOs need project. For those corporations specific unified definition and is still easily misunderstood. In fact, a number of private sector partners for CSR to identify major industries and which have successfully achieved impediments to CSR’s growth are now being pin-pointed and addressed. For many initiatives, provided that they companies working in their area sustainable partnerships, they years now the different key players in society -- NGOs, the public sector and the are chosen using carefully of operation, find out how that should showcase them, share private sector -- who are usually involved in CSR initiatives have had the same challenges and selected criteria. There are over industry is doing, and if there is experiences whenever possible, Cproblems facing them. Some of these challenges and barriers are concerns about corruption, 25,000 NGOs in Egypt; of those room for the company to further and set an example for others. fear of impact on reputation (should something go wrong), different cultures, different goals, 25,000, just under 1,000 are develop within the industry. different ways of evaluating outcomes – in other words, they all speak different languages. In actually active. For those NGOs The NGO should not waste time In the end, there are certain addition, these sectors often have negative impressions about each other. The sectors circulate that are actually serious about preparing a proposal if it is unclear key elements to take into in closed loops created by their accusations and blame towards each other. implementing their development that the company is capable of consideration when engaging in activities and actually do “mean taking on a project, especially a partnership. Sustainability and sustainability of the project. An NGO should not expect a company to fully support it without mutual effort from the NGO as well. Both partners should be sensitive to each other’s problems and should be willing to compromise to accommodate each other. Trust and transparency are some of the most important indicators of whether or not a partnership will succeed. If these elements are missing, the deal should not take place as it will only lead to problems and eventually the possibility of failure.

Egypt is on its way to 54 increasing its CSR track record. Although they may not have received the proper attention, there are many partnerships and initiatives that have already evolved here under the definition of CSR. What is needed now is a conscious effort to increase transparency

win/win go hand-in-hand and are both key indicators of a successful partnership. Linking with potential partners with a common interest is essential in making and maximizing resources in a partnership; this paves the way to a win/win situation. Partnerships that offer significant wins on both sides will sustain the project and increase the chances of a long invest significantly. Owning up in order to avoid pre-judgment of term working relationship. Both to both sides of the agreement prospective partners which will partners should bring something and showing commitment to the only result in missed development to the table, and both should deal will also ensure success and opportunities for Egypt. These companies should would help in better evidence- work on pro-poor products based decision-making in health, Towards a “Business and business models. For cost containment, and improving example, pharmaceutical health literacy of the community. companies might work Nutritional industries could Case” for CSR in Health on creating generic and promote healthy food products, cheap drug formulas, free cheap packaging and food patency rights, create fortification with ingredients that address nutritional deficiencies in the poor communities. In addition to that, all companies should not forget that their main responsibility should be towards the health of their own employees, their families and their surrounding communities. They should apply explore the concepts of market- proper standards of occupational based approaches to CSR and health and safety, environmental their implications for health protection, abandon smoking while looking for possibilities and find innovative occupational 56 of successful business models for outlets to improve accessibility health finance and insurance 57 the healthcare sector that would of the poor to drugs, create drug schemes for their employees. be able to help the poor. financing schemes for the poor To conclude, companies should If we review the health CSR and invest in research for drugs change their mind-set towards ealth represents the real wealth of any community activities in Egypt, we will find out important for national health pro-poor investment models and and is the definitive measure for development. that they are more or less sporadic. problems. This would help these responsible business, rather than Healthcare represents one of the biggest challenges Companies with their core business companies to have a share in new charity. They should have more because of its complexity and the need for relatively in the healthcare sector can be market segments and would help bottom-up innovation in the fields high technical facilities as well as highly trained classified into pharmaceutical the poor in accessing affordable of health. There is a great need for personnel. Healthcare stakeholders are many with involvement of companies; health supplies drugs. Health insurance companies market-based research to find out Hmany industries and complexinter dependence between them. and technology companies; could try to create more inclusive pro-poor business opportunities health insurance companies and health insurance schemes and and help companies to invest in managed care organizations; work on micro health insurance them, as well as intensive training responsibility (CSR) activities rather than only its financial healthcare providers (clinics and models. Hospitals might create on CSR within the companies. though many have limited their resources. The third problem with hospitals). Despite the fact that outlets in poor areas, invest in Efforts should be made to direct CSR activities to donations and/or this approach is that CSR is seen these companies are the key efficient cost-effective healthcare the companies in investing their supporting activities outside their through a social perspective rather players of the industry, there is models or subsidize part of their know-how and experience in core business. There are several than a business perspective, little focus on their CSR activities. services to the poor. serving the health of the poor. problems with this approach which makes it difficult to attract There are some exceptions Other companies working More coordination is needed

to CSR. First, it creates a very finance to it especially in times such as activities sponsored by outside the healthcare sector between the corporate citizenship Corporate Social Responsibility passive dependent attitude by the of crisis. Companies should have pharmaceutical companies like should continue their present and business development poor. Second, donations limit the a proactive approach to develop awareness campaigns, outreaches CSR activities in the healthcare departments within the company support in financial issues where all the poor economies and deal with and drug subsidies. On the sector, but without going out of to create business models that companies are equal, and neglect them as active markets, rather other hand, there are intensive their core business. For example, would be beneficial for both the Dr. Mostafa Hunter completely the core competencies than having a reactive approach CSR activities of companies not financial institutions should create poor and the company. There Lead Expert for the of companies represented in their to their critical needs. The perfect working in healthcare, which innovative financial tools to should be intensive communication Healthcare Sector know-how. Focusing the CSR model would be if CSR was able frequently have little relationship support the creation of healthcare between different stakeholders of EIoD- Ministry of Investment activities on the core business to generate profit. This would to their core business. units and hospitals or support health in Egypt to coordinate CSR fields of the companies would align both the humanitarian and Companies should start focusing training programs for healthcare activities in an efficient way and make the poor benefit from product business approaches in the culture on their core business while doing leaders to improve their financial create synergy between different Many companies have health innovations, managerial skills, of the company and would put CSR their CSR activities. The role of skills. Information technology and industries in addressing health and education as the top two business experience and technical as a priority of top management. the key players in the healthcare communication industries could problems of Egypt to maximize priorities for their corporate social competencies of the company, In this article we are trying to sector should be highlighted. work on creating products that the outcome for the community. often influenced youths, the company enabled by international them to work in a small-scale soap Advancing practices driven packaging production unit and by reporting become employees of Unilever. requirements to s t a k e h o l d e r s , Externally, philanthropic giving brand loyalty, and continues to be the most popular the CSR Model image-building form of corporate engagement in motives. Large supporting the community. SMEs local companies usually make charitable donations have been driven with no expressed expectation partly out of a of return. Larger family-run desire to ‘do companies often establish good’, and partly foundations and focus in areas to improve their such as health, education and image, balancing make ad hoc contributions to help their focus on employees and others in poor genuine outreach communities. while getting a larger market There appears to be a limited 58 share from the number of multinational and 59 act of giving. In large local companies focusing the case of SMEs, on implementing business basic he past three years have witnessed continued success of understood as a company achieving there is no clear initiatives wherein a company may corporate social responsibility (CSR) initiatives, revealing the a balance between economic, business motivation; their actions develop products and services concept as it evolves in the Egyptian context. Despite its brief environmental, and socially vital are more out of sincere concern to meet the needs of poorer history, CSR ignited a microcosm of discussions around the issues while simultaneously for local communities. customers such as the Kheir Zaman macro problem of how to intensify the development process addressing stakeholder chain of supermarkets managed in Egypt. Much research has been conducted to study this phenomenon expectations. Nevertheless, the From the internal implementation by the Mansour Group. Also, Tand provide corporations with directions on how to adopt CSR and small and medium enterprises side, an apparent trend - few among them are conducting hence participate in the country’s development. These various research (SME) definition is still shaped -- predominantly among commercial initiatives in the studies are empirical and should be ongoing since they illustrate the by religious convictions using multinational companies and community that support directly evolution of CSR and highlight how companies can move forward. This terminology appropriate for small to large-scale local the success of the company and article summarizes the outcome of this research and offers a model charity. companies --- is adherence to promote its corporate brand through which corporations can strategize the CSR concept as a source Multinational and local laws while still satisfying identities. The Mokattam recycling of progress for both the company and the community. large local companies Accordingly, the current trend the urge to seek accreditation to school established by P&G is began to realize that among multinational companies international standards in areas an illustrative example. Though focus on the brand and large-scale local is to appoint such as labor rights, health and the project aims to protect the The fast evolution of CSR indicated is no longer enough, enterprises CSR managers with international, safety and the environment. company’s shampoo bottles from

that it is not a new phenomenon. need to be distinguished by the business and development Though these applications being refilled fraudulently, it is an Corporate Social Responsibility Egypt has a powerful tradition role they play in the communities backgrounds to draw up CSR confirm the companies’ internal income generating mechanism of giving practiced in both the where they operate. Linking their strategies and professionalize responsibility, CSR is about going and an educational medium giving Christian and Islamic faiths. businesses to the moral case for voluntary contributions. beyond minimum compliance. young garbage collectors the CSR has become vital. Companies such as Mobinil, It has largely been multinational opportunity to recycle the bottles, Businessmen played a vital social Vodafone and Barclays Bank are companies which have succeeded earn incentive and become role and had a long history of Affected by the culture of giving and adopting this model. At SMEs, chief in surpassing these basic literate. philanthropy. In recent decades, the globalization trend, variation executive officers are the main compliances by thinking creatively globalization has created a crucial in defining CSR and differences on decision-makers for conducting about taking these compliances On the other hand, an increasing Passinte Isaak need for companies to develop how companies adopt the concept a CSR initiative, with almost no a step further. Unilever’s ability number of companies are their competitive edge, yet it is were noted among corporations dedicated personnel to organize to adapt its workplace policies supporting community initiatives Partnership Manager Center for Development becoming essential for businesses depending on their size and form. and manage these activities. to bring greater benefits to local which protect the company’s Services that strive to be sustainable For multinationals and many large communities is a good example. long-term interest and enhance to have the right reputation. local companies, CSR is generally Multinational companies are Through training 180 handicapped its reputation. A good example 60

is the support by Microsoft and Externally, the company’s they are part of the development Barclays’ Bank for the Young social impact becomes diffused cycle. Companies must root CSR Women Leadership Program that among numerous unrelated in a broad understanding of aims to enhance the skills of efforts. The consequence of this the interrelationship between young women (18-25) through fragmentation is a tremendous corporations and society while offering them training on basic loss of opportunities. The power at the same time linking it in the ICT, English language and soft of corporations to create social strategies and activities of the skills as well as mini-grants and benefit is dissipated and so is companies. internship opportunities to enable the potential of companies to them to start a career. take actions that would support Therefore, corporations need both their communities and their to analyze their prospects for How to Move Forward business goals. social responsibility using the Though the current CSR model frameworks that guide their has been the umbrella of many Current Model Advanced core business choices. More CSR successful initiatives, it has not Model initiatives should focus on the achieved the targeted social and To advance CSR, the pyramid bottom of the pyramid activities economic development. The model needs to take its natural (as per the advanced model) as result of focusing on philanthropic form. The private sector needs well as the commercial initiatives activities disconnects companies’ to shift their sense of giving and community investments strategies that neither make from philanthropy by creating a activities. Through implementing strong social impact nor “win-win” model through which a this advanced model, companies strengthen the firm’s long-term growing market is realized, jobs would discover that CSR can competitiveness. Internally, CSR are created, wealth is increased, be much more than a cost, a practices and initiatives are often standards of living are improved constraint or a charitable deed – it isolated from operating units while at the same time taking can be a source of opportunities, –-- and even separated from the into account social problems. innovation and competitive mainline corporate philanthropy. Businessmen should be aware that advantage. interaction and social of influence, such as supply investment and at the chain, customers, and local end of the chain is the communities. company’s engagement • Reflect the GC principles in in public policy dialogue management systems. and advocacy activities. • Outline future plan of action. • Describe partnership projects According to the GC in support of broad UN goals. initiative guidelines, the communication must • Third element: include three elements: a measurement of current or expected outcomes. • First element: This measurement of current an executive and expected outcomes uses statement of indicators and metrics such as responsibility efforts---thus the continued support of those developed by the Global term Communication on Progress the GC. Reporting Initiative (GRI). GRI (COP). The COP serves to ensure This should be a clear statement produces one of the world’s accountability, drive continuous of continued support for the GC most prevalent standards improvement, and to safeguard in the opening letter or message for sustainability reporting 62 the integrity of the UN-Global from the Chief Executive guidelines. Sustainability 63 Compact as a whole. Officer, Chairman or equivalent reporting is a form of value while also containing a simple reporting where an organization The COP, then, is a communication to mention that the report shows publicly communicates their stakeholders---that is, consumers, performance aligned with the economic, environmental, and employees, government, media GC principles. In addition, it is social performance . and other interested parties---on considered good practice to the progress the company has include some highlights of the Tips made implementing the ten GC benefits of engagements. • Show performance for several principles. years, allowing readers a • Second element: check of progress. United Nations- Global Compact How does a company create a description of actions • Present positive and negative its Communication on undertaken by the aspects of the organization’s Progress (COP)? company. performance. Communication on Progress…How to create it! In this description of practical • Specify future targets. Since there is no single COP actions commitments, systems, • Link performance to the ten structure, the companies are simply activities the participant principles. Originally institutionalized for he United Nations formally launched the National asked to enact the 10 principles indicates what was performed influencing policy and ensuring the Network of the Global Compact (GC) in Egypt on within their chain of influence, during the previous year to What is a Notable

initiative’s sustainability, the GC had February 9, 2004. The UN-GC is a voluntary initiative noting that when moving down the implement the GC principles Communication on Progress Corporate Social Responsibility the United Nations Development for businesses to commit to aligning their operations chain, the influence decreases. At and engage in partnerships. (COP)? Program (UNDP) and Mansour and strategies with ten universally accepted principles the beginning of the chain is found There are various ways to Group as its focal point. But by in the areas of human rights, labor, environment and anti- the core of the business activities report on each principle The notable COP program was 2008 the focus shifted a bit to the Tcorruption. By doing so, business, as a primary agent driving in the workplace and market comprehensively, but many introduced in 2004 to highlight Egyptian Corporate Responsibility globalization, can help ensure that markets, commerce, place, where the company has companies do follow the co and recognize outstanding Center---a joint project between technology and finance advance in ways that benefit economies the greatest control and influence mmitment>system>activity communications on progress. the Ministry of Investment and the and societies everywhere. in affecting ESG (Environmental, approach to report on their These COPs are selected and UNDP---with Mansour group still Social, and Governance) actions. marked as «notable» cause of representing the private sector. What is Communication on Compact expects participants performance. Moving down the their adherence to the COP policy, Currently the GC local network Progress (COP)? to take actions in line with their chain, control and influence Tips and because they represent consists of 24 members, made up commitment, and therefore become weaker but could still • Try to link commitments and illustrative and inspirational largely of some of today’s leading Although the commitment to the requires them to communicate be significant. Farther down the actions to the GC principles. examples of communicating businesses. initiative is voluntary, the Global annually on their corporate chain is the company’s community • Reflect the company>s chain progress. Acknowledging these 64

outstanding COPs--- with respect allows for checking progress. Global Compact’s four principle to quality and comprehensiveness • Utilizing proper reporting issue areas, while all must be of the information they provide--- process which ensures addressed after five years. gives companies strong incentives, reliability, clarity, and timeliness • The COP submission form particularly as efforts increase of information as well as on the UN Global Compact to link COPs with mainstream including stakeholder dialogue. website will require additional financial market analysis. information to improve search New UN-GC Communication ability. In order to be a notable, a COP must on Progress (COP) polices? • The “inactive” participant meet all the basic requirements as status currently in use will specified in the COP policy, as well In April 2009, the UN-GC office be eliminated. Business as meeting exceptional examples agreed to update policies and to participants that have been in at least two of the categories simplify the COP process, clarify “non-communicating” for one shown below: minimum requirements and year or more will be removed improve search ability, including not only from the list but also • Strong statement of continued the following items: from the UN Global Compact support for the Global Compact. website. • Clear and detailed description • New business participants will of practical actions taken in be given one year from the The policy will become effective implementing the GC principles date of joining to prepare and on the first of July 2009 for new and/or in undertaking submit their first COP. business participants joining on or partnership projects in support • During the first five years of after this date. It will be applicable of broader UN goals. participation, a COP must to all business participants as of • Measurement of outcomes that address at least two of the UN first of July 2011. of these crises impacted on the global tourism sector, such as International and Arab tourism September 11 or the current global financial crisis, and others sector decline seen as result of impacted on a regional level, such as wars in the region, and others crises affected the national level, financial and epidemic crisis such as terrorism and disease. Growth rate of Arab tourism industry expected drop to zero

people whose fixed retirement compensation was affected), as well as focusing on programs for shorter tours during the current crisis. Close ties with national and 66 international tourism companies 67 are to be maintained especially in the financial transactions, in order to avoid disruption of implementation of these tourism programs. The Arab League report also Arab tourism sector points out that Europe and In the face of this crisis and to The report called for the need ed by the global financial crisis, current crises faced America will be the most affected ease its impact on tourism in Arab to modernize the means of by nations around the globe have greatly threatened because sources of their markets countries, the report proposes a communication available to

economic performance while greatly increasing are in a state of recession, while number of measures, the most the tourism sector in line with Features national vulnerability. The rampant spread of new the Asia-Pacific arena should important of which is inter-Arab modern requirements such as the varieties of influenza viruses has led the World reflect positive results in spite of tourism promotion through the use of the Internet and e-mail in Health Organization to express difficulty in controlling them expected slow growth compared exchange of information among marketing and promotion. The afterL they were transformed into pandemics. This is in addition to previous years, with the same the Arab countries with regard report noted that adopting tax to the many other communicable diseases against which all decline between 1 to 2%. applying to Africa and Middle East to attitudes and concerns of procedures, if only during the countries are taking precautionary measures. regions. tourist segments of the markets. crisis, would ease the burden The report shows that so far Such a move would assist in on tourism activity, hotels and there is still a great deal of attracting Arab tourists to Arab tourism services as well as aviation In this regard, a recent Arab well as extreme volatility in the uncertainty, with the situation touristic destinations by utilizing companies. Taxes on air tickets, League report monitored many markets following the outbreak of depending on the updates of the Europe and the geographical proximity and low sometimes up to 30-40% of the of the negative impacts of the health epidemics. economic situation. If economies “ transportation cost. The report ticket value, need to be revised. current crisis on the tourism sector begin to show positive signs this United States are also suggest a significant increase It pointed out the importance of in the world in general and in the According to global reports, the year, a positive tourism outlook the most affected, in incentives to the tourists, and coordination with the concerned Arab world in particular, pointing current scenario of the troubled may be expected, but this outlook while Asia and the necessity of coping with parties within the State to exempt out that tourism was among the economy is expected to continue will be reduced if the situation variables that were monitored in from entry visas those Arab and sectors that have experienced a for a long time, perhaps for post- continues to deteriorate. Africa shows the report relating to the quality foreign owners of residential real marked decline after the global 2009. Similar reports also predict positive results of the tourists, the content of estate or investment projects, as financial crisis and the ensuing a decline in the demand for The report states that it is not the the required programs, and well as their first-degree relatives, global economic crunch. This is in tourism as the tourism industry first time for this vital sector to face despite slow promotional campaigns. These in order to facilitate their entry. addition to current uncertainties will see recession with the real a setback. Tourism suffered many growth. should be directed to those who and the lack of clarity of the future growth rate perhaps setting a crises, though differing in severity, ” had not been adversely affected The report shows the importance of the world economic situation as record at zero or at least a slight causes and consequences. Some by the financial crisis (such as of contracting leading foreign the increase of tourists numbers coming to Egypt.

Morocco’s plan centers on acceleration of promotional campaigns carried out by Morocco and throughout the world, which will be adapted to the touristic trends in the circumstances of the crisis. There is to be a focus in the promotional plans for traditional tourism markets in the European Union, which has around 46% of global demand, in addition to new markets in Asia and the Middle East. As with Egypt, Morocco rejected the idea of facing the crisis by lowering prices and decided companies for the greater utilization charter airlines at several touristic to put forward new alternatives, of real estate units in touristic cities have continuing support such as maintaining the same 68 villages and resorts throughout through this plan. In addition, price for the products but giving the year for the owners of those there is an expanded focus on promotional gifts to customers units. Other measures would new and promising markets who buy these products. Some include exemption of touristic such as China, India and South of these promotions include transport from road tolls and America to provide incentives additional free hotel nights, free provision of exceptional facilities for the flow of investments in meals, exploratory trips, and other for the movement of touristic touristic projects. It is hoped offers. The Moroccan government cars and buses across the borders that these moves will assist in the has decided to increase the between the Arab countries as a development of the application budget to promote tourism during low-cost alternative to the use and activation of “Open Skies” the current year by 10% to cope of private cars. Similarly, the agreement, which allows landing with additional expenses of the organization of various festivals, of aircraft in all Egyptian airports pre-emptive plan. exhibitions, conferences and without conditions, an issue which sports competitions on Arab is believed able to contribute to Similar steps by the Ministry of and international levels is also Tourism in Jordan included the mentioned as an encouragement reduction of entrance fees to for growth. touristic sites for Arab tourists, and reducing the tax on services On the other side of the issue, the of hotel accommodation from report tracks a number of steps 14% to 8%. In addition, to taken by some Arab countries enhance competitiveness, tariffs in confronting the effects of the on goods used throughout the crisis on the tourism movement. tourism sector have been revised. In Egypt the Ministry of Tourism The Ministry is also trying to open developed a plan to reduce the new markets for non-traditional impact of the crisis with the focus tourists from previously restricted of the plan not to resort to the nationalities, such as Romanian, policy of reducing prices but to Chinese and Indian. Tourists from provide special offers, because these countries can now get an past experience has shown that entry visa upon arrival in Jordan, lower prices take a long time to provided that they are traveling return to their real level again. with tour groups organized Low cost flights to Egypt as well as through a tourism office. flu in several Arab countries. Ramadan this year began Similarly, pilgrimage groups will during the last ten days Egyptians are challenging the three be affected, especially the touristic of August, which with the category, despite assurances from month of July, are the the Saudi authorities to impose peak of the summer crises of summer security measures and required season. precautions. However, he explained that the summer Beaches are full; only a small decline in hotels occupancy The movement of external and season has not Skyrocketing prices of apartments and chalets …Raas El Bar at the internal air travel has also been been affected by affected by the spread of the the global crisis in top of demand disease. Coming so soon after terms of volume the global financial and economic of bookings, but crisis, these factors have cast a more by the fact shadow over the tourism sector. that volume He also commented that Egypt’s of expenditure was revenues from tourism amounted limited. Furthermore, tourism to $11 billion dollars in 2008, in Sharm el-Sheikh relies an increase of 15% over 2007. mainly on foreign All the indicators confirm that tourism while 70 current revenues, in view of the d o m e s t i c 71 new economic and health crises, tourism is very will be negatively affected, so that small and would great efforts will be required to not affect the contain such negative effects at summer season, all affected levels. since Sharm El Shiekh is largely the Very special season destination of elite In fact, the tourism season this society. year is a very special one, with

people facing the effects of the Bookings Features global financial crisis and new cancelation H1N1 flu virus known as swine The impact of summer flu. As a result, prices of air crises was limited but felt travel fell by 30% and 40% in an in Marsa Matrouh after attempt by airlines companies to fears of plague resulted attract customers. Also, price of in people preferring to hotels and restaurants in touristic stay away from the destinations fell after the global city. Fears lessened crisis hit the tourism sector towards the east, ontrary to what was expected, Egyptians challenged the three crises of this summer, worldwide. away from Matrouh namely, the global financial crisis, swine flu, and plague. They overcame their fears and and on to Marina filled all the well-known beaches of Alexandria, Matrouh and Raas El Bar. The prices of Mr. Adel El Sherbini, Head of and Alexandria. apartments and chalets and the expected rate of cancellation in hotel bookings were Sharm El Shiekh Hotels Chamber, Occupancy rates also, in most cases, kept to a minimum. Egyptians ignored the global health hazards, says that in the wake of cases of are less than and flocked from all over the country to the usual beaches and places of summer entertainment. swine flu in Egypt there were fears previous years, CWhat happened? How did Egyptians manage to enjoy the summer despite the crises? of a decline in tourism activities to according to Major Egypt because of this epidemic. In General Ihab Farouk, Mr. Waseem Mohie Eddin, Head of on the groups of Arab tourists in On the other hand, Egyptian addition, other factors contributed Undersecretary of Ministry of the Chamber of Hotels, says that particular. They choose Egypt as tourism companies have incurred to the impact on the summer Tourism and the Chairman of the Alexandria was occupancy rates only slightly fell, their popular destination, being deep losses after thousands of season, including a late finish to Central Department of Tourism not much affected since it being just natural that the swine greatly attracted here during the pilgrims had to cancel bookings in end-of-year school examinations. and Resorts in Alexandria. the summer season was literally flu pandemic had a negative impact summer months. the wake of an outbreak of swine Furthermore, the holy month of General Farouk pointed out that reduced to only one month, Significant drop night, while general apartment empty pockets find least, and sometimes, when This crisis brought prices have been ranging from simpler sources of possible, the full costs. Because about a marked drop EGP 350,000 to EGP 2 million amusement closer of competition among these in prices, especially in for ownership. Apartments prices to home---a new individuals in this regard, the Matrouh, to attract in the Miami area range from p h e n o m e n o n employer works diligently with his vacationers with EGP 200 to EGP 450 per night, called “dacation” staff for arranging the available prices reaching low depending on proximity to the in the USA. resort apartments. levels not seen for sea, while away from the sea the years. All beaches cost is about EGP 150 pounds per Summer in New in this area are plans through were kept open night. Meanwhile hotel prices, installments! which the individual pays the and free to for example the Sheraton Towers Most of Egypt’s costs in installments over several citizens except which is very close to the sea, 16 million months after the end of the in El Gharam offer prices ranging between EGP workers are vacation. Because of his limited and Rommel 700 to EGP 800 per night. included in income, the installments will be b e a c h e s , the low- paid later against his consumption where one In Matrouh a large number of in winter. In other plans, the pound is public hotels are found with rents families arrange a special program collected from each varying according to the level for summer vacation, person for services, of every hotel, starred hotels usually saving sums not including with their five levels, as well as G a m a s a , of money 72 rental of furnished apartments and chalets, which is the closest to during the 73 which vary between the popular, Cairo (180 kilometers), is a months prior medium and luxury units which destination for public holidays to vacation, directly overlook the sea. and weekends. It is more or they enter appropriate for medium a collective umbrellas The rental of apartments and income people who cannot savings system. and chairs. chalets per day ranges between afford an entire week. All such plans are EGP 70 to EGP 250 during the The same is true with flexible in design One oddity in month of June, based on the Raas El Bar, which has so that the worker all this is that site and the level of finishing and become a very popular will be able to handle

the prices of furniture. Prices rise during July destination in the last the budget for such a Features apartments and and August, ranging from EGP two decades. vacation. chalets in Alexandria 100 to EGP 400 per day; there are still maintain sky- some luxurious apartments and Despite the increasing interest The spending of these high prices in spite of chalets with prices starting from of Egyptians in recent years in income or families during summer beginning on the crises associated EGP 500 to more than EGP 1000 planning for their summer vacation fi x e d - i n c o m e months might be thought to July 15 after the end with the summer. In El a day. in advance, official data confirm category, but because contribute to the recovery of of high school examinations Maamoura, for example, that about 35% of Egyptians are of the interaction among these the economy from the previously and until August 15 and the start the price for the month of People win limiting their vacation to day trips, individuals in the workplace, there mentioned crises. However, if of the holy month of Ramadan. June for an apartment Throughout all this, it seems that such as spending a day on the is a sort of competition on where viewed as a total, the situation has overlooking the main street was public resorts will be the winner Nile cornish or in a public park or to spend the summer vacation like already contributed to the decline He noted that, until now and to increased from EGP 200 for the this season, especially in Raas El the zoo. Even then, most families other colleagues, even if they do in spending during the period the contrary of what had been day to EGP 350, depending on the Bar, Gamasa and Balteem. These do not spend much on such a day not have the budget for it. prior to summer because of the expected, the Ministry of Health standard of the apartment rooms. destinations are located away from except in case of necessity. They pre-emptive savings. Therefore and the Ministry of Tourism Even prices in the side streets the three crises of summer (Swine carry their own food and drinks to Through funds which are the spending of both types of did not take control measures were increased from EGP 150 to flu - plague - global crisis). Rental avoid purchasing and increasing formed by these individuals in families on the different plans is at the borders, particularly as EGP 250 a day. rates in Balteem start at EGP 50 to the cost of the day even more. their workplace, such as social still spending from a limited annual Alexandria is used to welcoming EGP 250 per day for units directly These self-imposed restrictions welfare funds or colleagues’ income during one part of the large numbers of Libyans who In El Maamoura the price per overlooking the beach, but these make the average Egyptian family funds, programs are arranged year at the expense of spending visit during the summer holiday night for a studio apartment was lower-rent accommodations are considered outside the scope of for workers and their families to during the other part of the year. season, thus putting Alexandria at found to be EGP 400 (EGP 12,000 more suitable for young people summer programs, and not targets spend summer vacations. Such Hence it cannot be said that the further risk of the disease. per month) compared to the and not for families. of tourism companies or far-away programs aim to provide them final outcome is to revitalize the winter price of EGP 80 pounds per beaches. Egyptians with nearly with accommodation at the very economy. Gold market Slightly revives

Recession Dominates Real Estate Market Bits are on Egyptians returning from abroad 74 75 raders in real estate market were eagerly waiting for the season when Egyptians working abroad return, hoping to give a kiss of life for the real estate market before it reaches the dying stage after a significant slump in sales. They were used to annually reap profits in this season because of the rising demand of purchase of units as a way of saving money. However, the impacts of the financial crisis was powerful than all the circumstances, after the savings ratio of Egyptian working abroad ominated lately by lower prices caused by the general market dropped,T coinciding with the real estate investors hesitating to reduce prices of housing units recession, the Egyptian gold market has finally begun to of their projects to avoid a drop in their profits compared to previous years. Relative stability emerge from the slump. A wave of transactions in international of gold prices in capital markets led to record global prices rises, naturally recent months resulting in higher prices in the local market. It is an “out of All these factors led to recession in far no kind of expected mobility in helped to start the the cocoon” season for gold sales this summer for several reasons. The real estate market, and also urged By: the real estate market, although boom. Prices in Dmarket has begun to reflect relatively good indices which helped to move many real estate companies to offer Ahmed Hashim after more than nine months recent days were the market, namely, in addition to the return of Egyptian workers from Market Highlights sales campaigns, amid parallel of the beginning of the global about EGP 163 per abroad to spend summer vacation with relatives in Egypt, this period also attempts to induce customers to financial crisis, and the real estate gram of 24-carat brings the arrival of Arab tourists to spend the summer holiday. Sales were accelerate purchasing, claiming estate and land, the price stability, sector’s exhibitions in which many gold, EGP 143 per definitely boosted since these two groups always prefer to buy gold. that the market is soon to enter and decline in prices of some companies participated during the gram of 21-carat a new phase of high prices. types, such as luxury and medium past period have not achieved gold, and EGP Although these expectations are units. satisfactory results for many of the 122 per gram of also expected that gold prices will Fakhri, a merchant specializing in not consistent with the cessation entities operating in the market. 18-carat, while the rate for a gold be stable over the next few months gold, described the market. Buying of brokerage activities in real The situation forced companies pound was around EGP 1145. if there are no new global events gold is seen as a type of savings, to be reluctant about building Abdel Azim noted that the decline to affect the price, negatively or yet Egyptians working in the Arab luxury residential units and most in interest rates on bank deposits Mr. Rafik al-Abbasi, Chief of Jewelry positively, because gold is a global region have not been able to save real estate companies turned could push some Egyptians Division at the General Federation commodity. as much as in previous years, he to medium and above medium towards directing part of their of Chambers of Commerce, stated added. The major negative impact segments through modification of savings to buy real estate as a that gold sales have risen in recent “Despite the sales surge since the of the global financial crisis and designs and spaces, and to give way to store value, and it may days as is usual for this time of beginning of July, compared with the drop in oil prices on national more payment facilities. be used to generate income year. July and August are the the past six months of this year, economies in the region resulted through leasing. This would lead most active months due to this but compared to past years, these in dwindling economic conditions Mr. Maged Abdel Azim, President some segments to move for the time being the peak of the return sales numbers confirm that there which has affected the proportions of E-DAR for Real Estate purchase of units during the of Egyptians working abroad and has been a real decline in overall of savings of Egyptians working Marketing, stated that there is so coming period. the arrival of Arab tourists. It is gold sales”. That is how Sami there. New crisis hits cement market Iron prices EGP 700 per ton, a record black market price to reach stability

76 77

he iron and steel market has been quiet in recent months thanks to a drop in prices. In general, lower worldwide prices for raw materials opened the door for imports- ust as citizens and contractors thought they could breathe again --thus leading to lower prices and some price stability in the Egyptian market. This after the end of the steel crisis---the price of which had risen daily stability is reflected by a notification sent by 5 companies to the Ministry of Trade for the past two years---lower prices in the local steel market with the new pricing. Suez Steel Company announced that it set the price to agents were soon offset by higher costs for cement. Consumers began at about EGP 2800 and EGP 2850 per ton for retailers, including the sales tax. Beshai Group to suffer again with substantially increased prices during June T“American Galvanized Steel” fixed EGP 2870 per ton to agents, EGP 2950 for dealers and a The Ministry of Trade and July, when a supply shortage led to skyrocketing prices nationwide. retail price of EGP 3000. and Industry took a JCurrently settled between EGP 600 and 650 per ton in most regions, the number of actions price reached a new record of EGP 700 per ton in some areas.

against companies Ezz Group announced several different rates Market Highlights and distributors of depending on geographical areas, setting the selling cement, recording more than 300 penalty records a need to adhere to the highest productivity possible price of the agents in the western region, Alexandria against cement distributors and agents during the first in order to meet the growing demand. Company and Sallum at about EGP 2910 and EGP 2960 per half of July. Also, top officials at the Ministry of Trade officials have been warned against continuing to ton to retailers and EGP 3010 to consumers. In the and Industry held several meetings with a number deprive the market and were ordered to commit Delta, Lower Egypt, and Cairo the price was set at of cement companies’ representatives, after these to implementation of natural rates of production, about EGP 2900 to agents, EGP 2980 to retailers, and companies recently announced production cuts. It and not to reduce production under unreasonable EGP 3030 to consumers. In Upper Egypt (from Giza was emphasized during these meetings that there is justification or claims. to Assiut) the price is EGP 2900 pounds to agents, EGP 3020 to retailers, and EGP 3070 per ton to This warning came as a final step before the ministry consumers, while in southern areas of Upper Egypt decides to take decisive action against cement Ezz Group fixed the price at EGP 2900 to agents, EGP companies. The Egyptian Competition Authority also 3045 to retailers, and EGP 3095 to consumers. Port announced that it will soon prepare a study on the Said National Company fixed the price at EGP 2900 cost of production at cement plants and the extent to agents and distributors, EGP 3000 to retailers and of compliance to the stated prices. Companies EGP 3100 to consumers. planning to reduce production will be subjected to legal accountability in case they are discovered to In the same context, the price of imported steel was have reduced production in order to raise prices by fixed at EGP 2750 to agents, EGP 2800 to retailers, creating shortages in the market. and EGP 2950 to consumers. The Annual Disclosure Competition 2008 Five projects to change the face of Helwan:

The competition ceremony took place during the EGP 40 billion last session of the EIoD’s 3rd Annual Conference on Corporate Governance on June 15th 2009. The EIoD organized the conference in cooperation investments. The project, estimated to cost EGP 6 with the Organization for Economic Cooperation billion, includes an open zoo (Safari) and a theme and Development (OECD) and the United Nations park, along with a group of international hotels Conference on Trade and Development (UNCTAD). and basic services, such as shops and restaurants. This year’s conference focused on «Audit and Business About 20 thousand direct jobs and 60 thousand Sustainability”. It aimed at strengthening the audit indirect jobs should be provided by this project. tools (internal, external, and audit committee) within corporate governance best practices and business Degla World Safari Park is based on Kuwaiti-English sustainability. This year’s winners were: investment and expertise. Seaton Thomson & Associates Co. was established in 1995 and 1st: Telecom Egypt, works in the areas of nature reserves and tourism 78 2nd: Mobinil, Five mega projects, seen by investment officials development in South Africa, while the Chipperfield 79 3rd: Egytrans, as an important opportunity to change the face group of companies, has worked in tourism and of the governorate within 5 years, and to provide recreation (open animal parks) for more than The intent of this competition is to promote world-class standards in corporate reporting and to more than one hundred thousand jobs, 30 years. Arabian Sea Properties is a Kuwaiti underscore the vital role of annual reports and websites in propagating full disclosure and transparency, await Helwan governorate at a cost of EGP 40 shareholding company working in real estate higher standards of corporate accountability, and effective corporate governance. billion. development as well as general management of a group of real estate investments in the Gulf and The competition is compulsory for EGX 30 companies, while other listed companies are invited to apply Dr. Hazem Al Qwaidhi, Governor of Helwan, said MENA regions. voluntarily. that the five projects come within the framework of the development and investment strategy jointly The third project includes the establishment

The Jury Committee is composed of Mr. Mohamed Yehia, Senior Advisor, KPMG; Mr. Ashraf Kamal, Head adopted with related ministries and stakeholders of “Building Materials City”, which includes an Reports of Disclosure Unit, Egyptian Stock Exchange; Dr. Khaled Dahawy, Head of Accounting Unit ,AUC; and Dr. within the State’s overall reform process and administrative complex for contracting, construction Ahmed El Masry, Senior Lecturer in Financial Management, Plymouth Business School, UK. the provision of employment opportunities and and real estate investments companies, and attracting local and international investors. exhibitions and huge stores providing building Annual reports and websites were evaluated based on strict criteria including conformity with: materials and necessary accessories. IFRS and Egyptian Accounting Standards, The cost of the first project, “Wholesale City”, is the requirements of the Egyptian Stock Exchange’s Listing Rules, EGP 15 billion. It will be carried out in cooperation The fourth project is the establishment of “Alshaea the EIoD’s Corporate Governance Code for listed companies, with the Ministry of Trade and Industry and a Mall Avenue”. Expected to become one of the largest group of businessmen represented by the Cairo global trade compounds in the Middle East, with a The remaining criteria included information related to the implementation of best corporate governance Chamber of Commerce, for the purpose of easing warehouse complex, exhibitions, shops and hotel practices, quality of financial and non financial information, general presentation, understandability, the residential block’s burden of trade groupings services and entertainment, the total cost of this summary of past results and highlights, management discussion and analysis, indications of prospects, and wholesale markets of the capital. The city will project is EGP 10 billion and provides 30,000 new and employee relations and development. be established within seven years, to provide more jobs. Planners hope to complete within five years. than 30 thousand direct jobs. Characterized by the The majority of EGX 30 companies failed to meet the competition’s deadline for submitting their annual availability of shops and stores with large areas The fifth project involves a total investment of reports. Six companies of the EGX 30 did not submit their annual reports nor did they have websites. for traders based on the latest global systems, the EGP 8 million. A collaboration with a consortium city will be a home for various industries including of key English companies, “Health Services City” The EIoD originally planned to declare the names of those companies with poor disclosure practices. textiles, children’s toys, and copper industries, in will be comprised of 21 hospitals and a medical However, since there were changes in the listing requirements which caused many of the best performing addition to providing staff housing. center, including a College of Nursing set up in companies to be late in submitting their reports, it was decided to postpone this practice till next year. cooperation with the British Imperial College. Next year a list will be produced of all EGX 30 companies declaring which do and do not have websites, “Degla World Safari Park”, which is based on the Considering employment, along with the required as well as which did and did not submit their annual reports. This aims to give investors some indicators open zoo concept, is a project to be established hotel services and commercial needs of the new about disclosure practices of the best companies in our stock exchange. by Arab Capital Holding and with Kuwaiti-English city, thousands of new jobs will be created. After 6 years of studies and discussions: At the end of the Arab-Turkish Economic Relations Forum: Emphasis on future coordination and cooperation of Arab-Turkish associations The first Arab convention to combat corruption associations of industries, entrepreneurs and investors maintaining the key objectives: to reduce the to hold a meeting to review the investment map of phenomenon of corruption and to combat this Iraq which was issued by the National Authority global crime. The particular objective of the Arabic for Investment. This guide indicates investment draft is to strengthen Arab coordination, mutual opportunities available in Iraq in 2009. The forum also cooperation and concerted efforts to reduce proposed holding a symposium on the development corruption as an important step contributing to the of bilateral trade. reduction of this phenomenon in Arab societies. Dr. Gwaily, in his remarks to participants, commented It puts much emphasis on the strengthening of that the forum focused on economic relations between cooperation with countries on the regional and Arab countries and Turkey, especially trade and international levels within the framework of the investment with Egypt which have been introduced International Convention against Corruption. The in reports on Arab-Turkey relations prepared by the After 6 years of ongoing meetings and discussions project has shown that there is no contradiction Council of Arab Economic Unity. He added that the of the experts of Arab justice and interior between it and the Arab model law against forum also addressed a number of topics including 80 ministries, the joint meeting of Arab experts of corruption with the draft law being guided by a general Arab-Turkish relations, Turkish-Iraqi relations, 81 both justice and interior ministries agreed on model of Arab States in their national legislation to The sessions of the political and economic forum and political cooperation between Egypt and Turkey, the final draft document for the Arab Convention combat corruption. The draft includes 35 articles of the relations between Arab countries and Turkey as well as trade and investment between Egypt and against Corruption. This paper will be submitted and aims to strengthen measures to prevent were concluded at the headquarters of the Federation Turkey in light of the free trade zone. He pointed out to the Council of Ministers of Justice during its and combat corruption in all its forms, to detect of Industries. Participating were Dr. Ahmed Gwaily, that the importance of Turkey to the Arab world is that meeting in November, 2009, and to the meeting of it and other related crimes and to prosecute its Secretary General of the Arab Economic Unity Council, it is one of the neighboring countries for a number of Arab Interior Ministers in March 2010. Its adoption perpetrators. It also seeks to strengthen Arab representatives of the two Ministries of Foreign Affairs Arab countries including Syria and Iraq. Consolidating there will make it the first Arab submission after cooperation to prevent and combat corruption, and Trade and Industry, the representative of Iraq to the relations with Arab countries will lay the foundations the International Convention against Corruption, detect and recover assets and to promote integrity, Council, in addition to a group of Egyptian and Turkish for the resumption of economic relations and political signed in 2003. The joint meeting had reached a transparency and accountability as well as the rule businessmen and the Commercial Counselor at the consultations with the Arab countries, as well as the

final version of the draft after meeting all comments of law. The UAE has suggested a new article to embassy of Turkey in Cairo, Mr. Jokman Shahen. Turkish positions in support of the Arab issues, foremost Reports that Arab States had previously requested. Though the draft designed to encourage individuals and The Forum asserted the importance of coordination being the Palestinian cause. basically not much different than the text of the institutions of civil society to participate effectively and cooperation between Arab and Turkish unions and According to the latest data available, the study estimated International Convention against Corruption, in preventing and combating corruption while also federations, and the preparations for the signing of a the volume of trade exchange in 2007 between Arab already signed and ratified by a number of Arab encouraging the media not only to assist in the memorandum of understanding between the two sides. countries and Turkey at about $ 22.4 billion, including countries, this Arabic version appropriates some detection of corruption but also be intolerant of it In addition, the Iraqi representative to the Council some $ 14.5 billion as imports from Turkey and about $ of the articles with the Arabic characteristics while during reporting of any kind. of Economic Unity urged the Egyptian and Turkish 7.9 billion as exports to Turkey during the same year.

course of the Council to the extent that it is now an Development (OECD) in the network and what it can Economic Unity Council obstacle against its works and the implementation MENA Corporate Responsibility offer in support, as well as the means to attract more appeals to member states to repay of adopted resolutions. Network looking to attract members to the network, especially government partners. The last session of the Ministerial Council approved government partners In addition, the committee considered preparations for budget receivables the budget for fiscal year 2009 at $622,000. On the next meeting which is to be held in line with the the other hand, a recent report issued by the The Egyptian Center for Corporate Social Responsibility Forum for Governance and Corporate Responsibility in The Arab Economic Unity Council appealed to its Council estimates the value of delayed payments held the fourth meeting of the MENA Corporate the Kingdom of Jordan next November. member states to pay their contributions to the of member states (until November 1, 2008) to Responsibility Network in June, 2009. The meeting It should be mentioned that MENA Corporate 2009 budget, as well as any receivables arising in amount to about $ 4,825,026---an amount clearly focused on discussing the updated reports submitted by Responsibility Network is an initiative of the investment previous budgets, so that the Secretariat of the able to offset the obligations of the Secretariat to the five working groups: evaluating of public policy, data program of OECD and seeks to establish a dialogue Council can conduct its affairs including payment Economic Unity Council. bank, business integrity and corruption, labor standards between the various parties concerned with corporate of its former and present employees. The Economic Unity Council membership includes and skills development, and health and environment. social responsibility in the region, to create a climate The Board pointed out that the financial situation Egypt, Sudan, Somalia, Mauritania, Palestine, The network’s steering committee also discussed the to attract more investments and to contribute to the of the Secretariat is a chronic problem in the Jordan, Syria, Iraq and Yemen. role of the Organization for Economic Cooperation and promotion of economic and social development. “We encourage our companies to invest in Egypt, after Minister of Investment participates in the Egyptians Abroad Conference Egyptians achieving growth despite crisis”, British official says. working abroad are encouraged to invest in SMEs

Under the auspices of HE President Mohamed Hosni Egyptian products, encourage investment in Egypt, Chairman of the UK Trade & Egypt, about 900 companies, has Mubarak, in the presence of Dr. Ahmed Nazif, the as well as playing a valuable role in the transmission Investment, Sir Andrew Cahn, achieved great success, pointing Prime Minister, Dr. Mahmoud Mohieldin, Minister of back to Egypt of the knowledge acquired through announced that his country has to the ability of the Egyptian Investment, and Mrs. Aisha Abdel Hadi, Minister receiving advanced levels of education. decided to direct major British economy to achieve a growth of Labor and Migration, the General Conference The Minister also stressed the importance of companies to invest in Egypt as an rate despite the global financial of Egyptians Abroad was convened with “Sons promoting investment by Egyptians working abroad important starting base to the Arab crisis and the recession in the of the Nation Abroad: Communication - Welfare – in SMEs and to take advantage of their desire to set and African region. In addition, those economies of most countries. Development” as its supporting theme. up projects in their governorates. Additionally, he companies would benefit from the He added that all of these facts In a review of the economic importance of remittances pointed out the importance of coordination in this advantages Egypt enjoys, such as encouraged the British Authority, of the Egyptians working abroad, the Minister of regard with Governors to identify sites and fields economic and political stability, and which helps companies to go to Investment stressed their significant role in the of investment available for projects in the areas of a strong pool of qualified graduates. Egypt, which is the most suitable balance of payments as well as frequently being the agriculture, industry and tourism. place in the region now to achieve largest sources of income to the families of those In other remarks, the Minister explained that the Sir Andrew said that Britain wants the substantial proceeds of the expatriates. Egyptian government adopts programs to communicate 82 its companies to achieve major expansion in the investment is seen as a strong starting point for The Minister of Investment also added that Egyptians with expatriates and encourage them to invest in Egypt, 83 growing foreign markets, pointing out that the latest other markets. abroad contribute in other aspects of economic while the Ministry of Investment is exerting efforts to study conducted by the British universities shows development in Egypt, such as representing a develop the investment climate in Egypt, especially in that companies that invest outside the UK achieved He added that the most important sectors for the significant proportion of tourists coming to Egypt, facilitating procedures and expanding investment to a growth rate of 31%, much higher than companies Egyptian-British cooperation during the next phase in telecommunications their calls are a meaningful strengthen Egyptian expatriates in Egypt. Also, the which operate only in the internal market. are information technology, communications, proportion of international contacts, while in trade Ministry is working to encourage the establishment of education, financial services, aviation, space and the presence of Egyptians abroad increases the companies specialized in the promotion of investment The Chairman of the British authority points advanced engineering, in addition to various types importation of Egyptian products. opportunities for Egyptians abroad, and providing out the companies which continue operating in of training services. Furthermore, they contribute to the promotion of various services through the internet. Reports

“Financial culture is a teaching each citizen how to deal with all financial global financial crisis increased the need for boards aspects of life. “Financial awareness is essential Corporate Governance that formulate clear strategic direction and build a necessity to avoid the risk for every citizen in order to avoid the dangers or The basis of corporate citizenship long-term vision beyond the profits. risks of capital investment”, he said. infrastructure and sustainable business This prepares companies in order to address the of capital investment”, risks more effectively, to expect negative effects on Minister of Investment Mohieldin pointed out a new youth project being Corporate citizenship is the commitment to ethical people and the environment before they occur, and proposed to the head of the Press Syndicate, behavior in strategic business, operations and consider risk management related to reputation. In Makram Mohamed Ahmed. This project aims culture. It was, at first, marginalized in corporate addition, wealth is increased by creating shareholder Dr. Mahmoud to increase the efficiency of young journalists governance, boards, and leadership, to become first value through the increase in commercial activity M o h i e l d i n , and the organization of specialized training and foremost linked to the reputation of the company. and expanding of access to markets. Minister of courses in the field of economics and finance, in However, in light of globalization and the There is a new vision of business which has begun Investment, addition to providing scholarships and diplomas interdependent world of investors, creditors and to emerge, and which is one of a set of core values called for the in cooperation with the Academy in the area of other stakeholders, awareness of the responsibilities that include human rights, environmental protection, dissemination financial transactions. of environmental, social and governance of the and fight against corruption, to direct the oversight of financial company increased as an integral part of their board, the relationship with the administration, and culture and He explained that every citizen in the present era performance and continuity of work. to ensure the credibility to shareholders. awareness of how to cooperate with the stock should be aware of how to deal with the capital Today, these dimensions contribute in determining Achieving these goals depends on the board in market and capital market transactions. market, pointing to the role of media in this regard the profits. Companies, to achieve success and general, and an especially the director, as Adrian in order to avoid the many problems resulting from ensure the sustainability of growth, are to have Cadbury says: “Corporate governance is to make He stressed the need for intensive public awareness lack of understanding of banking transactions such boards that must integrate these new dimensions a balance between economic and social goals and campaigns aimed at providing information for as credit cards and excessive debt. into the heart of decision-making processes. The between individual and collective goals”. Egyptian-Gulf cooperation in Study by Economic Unity Council for the establishment infrastructure, transport, and facilities of Anti-dumping authority under Arab Customs Union

Dr. Mohieldin: 52 projects to investors, with a total cost of rules of origin as well as the establishment of a mechanism for supreme judicial review. $ 25 billion. He pointed out that one of the most important Gulf Stake reached 35% of capital of foreign companies joint trade policies for the consolidation of the established in Egypt mechanisms applied in the Arab Customs Union is protecting Arab industry against practices that are harmful to Arab The coming period should witness major and international trade, such as cases economic cooperation between Egypt and Gulf of dumping, subsidies, or significant States, especially in light of the existence of The committee of increase in imports, which require the promising investment opportunities in the areas of technical experts application of preventive measures. infrastructure and facilities, education and other involved in anti- 84 projects. dumping, support, Dr. Ahmed Geweili stressed that there 85 Dr. Mahmoud Mohieldin asserted the need to and prevention in are many imperatives that necessitate strengthen economic cooperation and investment Arab countries, the establishment of a unified anti- between Egypt and the Arab Gulf States in order under the Economic dumping, support, and prevention body, to confront the global financial crisis, pointing out Unity Council, is such as the impossibility of carrying out that the current situation indicates that the Gulf discussing a study for the establishment of an anti-dumping investigations on a member state in states should achieve a surplus during the period anti-dumping authority in the framework of Arab the Customs Union. This takes into account that from now until the year 2020 equivalent to 2.5 Customs Union. Expected participation includes the rest of the Member States of the Customs Union times the accumulation of these States during the heads of agencies and bodies involved in the fight are perceived as a single unit due to the removal past fifteen years. against dumping and support and prevention in of all the customs borders between the Member

Mohieldin remarked that Egypt supports serious Arab States and institutions of joint Arab actions. States of the Customs Union and will be dealt with Reports investments, adding that Gulf investments are one as one unit in the face of others. Unified customs of the most important sources of investment in The Egyptian government is currently working For his part, Dr. Ahmed Geweili, Secretary General tariff for the goods to the borders of the existing Egypt. Gulf stakes in foreign companies are about on the expansion of infrastructure projects of the Arab Economic Unity Council, said that the Member States of the Union will be launched. He 35% of the total contributions of non-Egyptians nationwide, aiding the creation of an improved study was prepared by the two sectors of foreign said that the rationale for the establishment of the in companies investing in Egypt during the period climate for attracting investment, the minister trade and trade agreements in the Ministry of joint body is to help nonmembers Arab States in from January 1970 until now. said. He added that 52 projects are available in Trade and Industry. He stressed the importance of WTO, or countries not yet able to build a cadre This statement came during the sessions of the the areas of infrastructure, facilities and services, establishing this body as one of the tools necessary of human bodies or the creation of specialized First Egyptian-Gulf Investment Forum organized and education with a total investment cost of $ to achieve Arab economic integration and the bodies in the rules of dumping, support and by the Gulf Cooperation Council in collaboration 25 billion. He stressed that these projects will protection of Arab products from harmful practices prevention. Further explanation included the with the General Investment Authority in Egypt, make a quantum leap in investment in Egypt and that might arise from the result of the liberalization unification of international trade policies, including and attended by a large number of Egyptian and will provide job opportunities, especially in Upper of world trade after the establishment of the Arab the establishing of a unified anti-dumping body Arab investors. Mohieldin pointed out that the Egypt and the Delta regions. Customs Union. He added that for the realization administered under the Customs Union, as well as Egyptian government gives great importance to The Minister of Investment pointed out that the of the Arab Customs Union there should be a the formation of a strong economic bloc. attracting Arab and foreign investments. Gulf countries have the financial and technical unified administrating body of joint trade policies He added that the establishment of the anti- Recent years have witnessed a large number of viability to qualify to benefit from the investment and customs borders of Member States, and the dumping, support, and prevention body will legislative and economic reforms undertaken by opportunities available not only in the Egyptian exchange of electronic data between the customs contribute to the consolidation of the Arab common the Egyptian government to develop an appropriate market, but also in African countries, Nile Basin authorities for the Member States in the Customs economic and international trade policies through climate to attract investment. The positive impact countries, and COMESA countries, in collaboration Union, as well as a unified customs tariff applied mapping a unified Arab industrial map. Such a of these reforms is clearly seen in the increase in with the Egyptian side, through the establishment on all the borders of the Customs Union in the creation will assist the economic integration and foreign investments to Egypt, from $ 2 billion in of joint projects particularly in the agriculture face of other countries. Geweili stressed the need the application of the protection mechanism for 2003/04 to $ 13 billion over the past year. sector, food industries, infrastructure, transport to end all tariffs between the internal borders of these industries to provide balanced market sector, and renewable energy. member states, and the identification of unified conditions. from Kafr Mohammed Ahmed of to have the ability to resist Menia El Qameh as well. Talaat the British. Harb had always Harb memorized the holy Quran aimed to be an entrepreneur, He won his battle against in early childhood, before joining so he established the Financial the Tawfaikiyah secondary school Cooperation Company, which colonialism just by “counting” in Cairo. provided many of the financial loans for small, financially He joined the Law School in August insolvent businesses. He 1885, and graduated in 1889. He “Talaat”, was a witness, in his early youth, to the Orabi revolution against the Khedive and the British, who the Pasha who occupied Egypt in 1882. It was an incident that helped to fuel independence for Egypt, the patriotism in Talaat Harb, like all 1919 revolution exploded, led provided the poor Egyptian youth at the time. by Saad Zaghloul. During the Revolution, Talaat Harb urged with a real leg to His wife died at an early age and Egyptians to struggle against he never remarried. They had the domination of foreigners one son, Hassan, who died in over the economic potentialities 86 stand on ... his youth, and four daughters: began a program of studies which of Egypt. He backed the idea of 87 Fatima (died 1976), Aisha (died included economics, arts and Banque Misr and succeeded in in 1988), Khadija ( died in 1997), sciences, mastery of the French establishing the bank in 1920, and Huda ( died in 1996). Their language as well as staying in celebrating its foundation on his incredible man: grandchildren have worked in a touch with leaders of all scientific Friday, May 7th, 1920 at the Opera • Worked 15 hours a day for 5 years, yet government forced him to resign from variety of occupations, including and cultural currents. House. Opening with a capital of Banque Misr. one who was an ambassador, EGP 180,000, and EGP 4 nominal • Opened a common grocery store to encourage trade, and proved to the world some who chaired companies and value of the stock, by the end of that the English saying “Egyptians know nothing but debts” is a mere lie. one whose medical specialty was its first year the bank>s capital • Distributed “piggy banks” to teach school children how to save and started the the treatment of communicable increased to EGP 175,000, to T first truly national bank. diseases. half a million pounds in 1925, and Pioneers • Was the owner of the real nucleus of the movie industry in Egypt in order to then to a million pounds in 1932. Mohamed Farid’s Successor The first headquarters of Banque support the economic revolution. Talaat Pasha Harb began his career Misr was located in a modest as a translator at the department of section of Sheikh Abu El Sebaa civil legal cases, and then became St. Known as a vivid and dynamic Though the present generation whole world that the Egyptians the director of the Accounting person, Talaat Harb would wake could easily live longer than his By: and Arabs are able to manage Department, and Director of the Banque Misr up early and begin his working seventy-four years, it would be Ahmed Abu Maiz their own business without the Disputes Office after Mohamed Talaat Harb had always advocated day at 6, issuing instructions to very difficult to achieve what he need of foreign tutelage. Farid, the national leader, in for the idea of a bank for the his men. He worked for five years, was able to do for his homeland 1891, until he became Director Egyptians with an Egyptian capital 15 hours a day, for free. Early in those years. Mohamed Talaat “Sharqawi” from El Gamaliyah of the Legal Cases Department. and Egyptian management, in his life in began a close and Hassan Mohamed Harb, was established Studio Misr for movie Although the origins of Talaat In 1905 he moved to become because he was always interested beneficial relationship with Omar born on 25 November 1867 production. His only motto was Pasha Harb can be traced back director of Kom Ombo Company in the Egyptian economy and how Sultan Pasha, gaining much useful and died on August 13, 1941. “The one who counts is the one to Sharqiyah governorate, he at its headquarters in Cairo. At to promote it, especially that all economic and administrative During the twenties, thirties and who gains”. Jack Burke wrote this was born in Qasr El Shouq at El that time he was also assigned to banks under the occupation were experience. He was also in contact forties of the last century, this about him: “His unique advantage Gamaliyah district, adjacent to manage the Egyptian Real Estate limited only to foreigners. The with the national movement during patriot shifted Egypt from being was his awareness of the inherent Al-Hussein Mosque. His father, Company, where he worked until British occupation was spreading the days of Khedive Abbas Helmi an economy basically run by strength and enormous potential who was an employee in the the majority of company shares a lie that Egyptians knew nothing II. Consequently, he saw money individuals to one run by joint yet to be exploited within his railways authority there, was from was in the hands of the Egyptians. but agriculture, and could not management as a public service stock companies. He founded citizens.” May God rest the soul the Harb family at Miet Abu Ali, This company was the beginning be successful in economic or that helps maintain the national Banque Misr, Misr Company of The Father of the Egyptian one of Menia El Qameh villages. of Talaat Harb’s revolution to industrial business. When World wealth and industrialization of for Spinning and Weaving, and economy, who proved to the His mother was from Saqr family Egyptianize the economy and War I ended without political the country. He confirmed that in his opening speech of the Bank Director. He summoned Von Anar, were unable to pay the land was and commercial companies”. This company also bought large trucks culture was given the opportunity ceremony when he noted that the German expert, to develop the encumbered. Talaat Harb was amount was used to contribute to transport goods from ports. to flourish, and minds were the new bank would not be a bank’s internal systems and at the able to face this colonial policy in to the company’s capital and In addition, the Bank created enlightened with new ideas and commercial bank, since its primary same time sent missions of young order to preserve Egypt’s wealth citizens contributed the rest to the the Egyptian Company for River high culture. Understandably, task was the industrialization Egyptians to England, Switzerland of agricultural land, and the Bank company. Thus, the bank became Transport, then Misr Company for he also believed that culture is a of Egypt and trade promotion. and Germany for practical training asked the Egyptian government to a fully Egyptian establishment Spinning and Weaving in Mahalla significant investment. Convinced Before he established Banque as bankers. All these talented and establish the Egyptian Land Bank with Egyptian beneficiaries, using al-Kubra. Talaat Harb brought of the need to strengthen culture Misr, Harb and his friend Fouad ambitious Egyptians returned to to take over operations in support a system that is now a corporate industry experts from Belgium, and the arts and awareness, Higazi opened a common grocery work in the bank. Soon after that, of agricultural activity nationwide. integrated economic system. and sent missions of workers and he established “Studio Misr” shop to encourage Egyptians to Banque Misr moved from its humble Egyptians Subscribe That is, Egyptian savings are in technicians for training abroad. to produce Egyptian films for trade. Despite criticism from those original location to its present Talaat Pasha sought to persuade a the bank which utilizes the money He also set up a factory for cotton Egyptian artists such as Um around him, the experience was headquarters in Mohamed Farid St. number of Egyptians to subscribe in Egyptian companies, which ginning in Beni Suef. The Bank Kulthum, Abdel Wahab and others. successful and encouraged others By 1938 the number of branches of to create an Egyptian bank using in turn produce quality Egyptian created stores to collect cotton in Studio Misr produced a short, ten- to trade. Thereafter, he turned the bank reached 37 units. Talaat Egyptian capital, and he led a products at low prices to meet all the governorates. Talaat Harb minute film to promote Egyptian over ownership of the shop to Harb was even interested in the huge publicity campaign for this the necessary requirements for continued establishing companies products and began producing a some of the Egyptians. external appearance of Banque purpose. The subscription hit about domestic consumption. This not for Egypt: Misr Company for weekly news bulletin of events Misr buildings and unified the eighty thousand pounds, and the only produced benefits for the Maritime Navigation, Misr for in Egypt to be shown in theaters architectural style. largest contributor to the bank national economy as a whole Concrete Works, Misr Dying, Misr before the beginning of any was Abdel Azim El Masry with total but also provided many job for Mines and Quarries, Misr for Oil movie. Studio Misr sent technical Banque Misr and its expanding of 1000 shares. On 13 April 1920, opportunities and workforce Trade and Manufacturing, Misr for missions of Egyptians to Europe He always 88 “ companies were able to contribute a decree was issued to establish training in all industrial, economic Medical Compounds, Misr Dairy to study the arts of photography, 89 took the ethical in a considerable way to lowering a joint stock company called and financial areas. and Nutrition, Misr Chemicals, direction, decoration, and make- unemployment, as its bank “Banque Misr” and was published The first company that the bank Misr Hotels, Misr Insurance. Talaat up. Thus were taught some of dimension into deposits increased compared to all in the Official Gazette. The initial established was “Egypt Press”, Harb has also established Egyptian the first: Ahmed Badrakhan and account, and foreign banks operating in Egypt. code of association stated that the then Misr Company for Spinning Manufacturing Sale Company to Morris Kassab (Directors), Hassan This fact helped end the colonial bank’s purpose was to practice all and Weaving (Mahalla al-Kubra), compete with foreign companies Murad and Mohammad Abdul helped small notion that “Egyptians know only banking activities: debit, credit on and many others. The bank was at that time, such as Penzaion - Azem (Cameramen), Mustafa manufacturers how to borrow”. Furthermore, goods and documents, deposits, expanded and opened more Sednaoui and others. Waly (voice), Wali Al-Din Sameh Banque Misr was able to stimulate and other business of banks. A branches in Alexandria and other (Decoration), Niyazi Mustafa and artisans savings among all Egyptians, even Board of Directors was appointed, regions of Egypt, as well as in Arab Egypt Air (Editor). The artist Ahmed Salim

to compete the children. The bank distributed including: Ahmed Medhat Yakan States such as Syria, Lebanon, Talaat Harb pushed hard to establish was appointed as a director of Pioneers with foreign piggy-banks to primary school Pasha, who was elected as and Saudi Arabia. Only two years an Egyptian airline company until Studio Misr. Talaat Harb stressed students and then took their president, Mohamed Talaat Harb after establishing Banque Misr, finally a royal decree was issued the importance of cinema and its products. money to open saving accounts as Vice-Chairman and Managing Talaat Harb established the first on May 27, 1932, to establish serious role, when he said, “We ” for them. Talaat Harb always took Director, Yusuf Aslan Cattaui Egyptian printing press with a Egypt Air as the first airliner in the work upon a strong belief that the ethical dimension into account Pasha, Abdel Azim El Masry, capital of five thousand pounds, Middle East with a capital of 20 cinema is a modern education in the bank’s transactions, and he Youssef Checoril, Ali Maher, Dr. to support thought, literature, thousand pounds. After just ten institution for Egypt in guiding Colonial Rumors decided that the bank would not Fuad Sultan and others. The and to strengthen the national months, capital had increased to people”. He established Studio Talaat had proved that the British finance any projects detrimental to establishment of the Bank was resistance. He said that it is 75 thousand pounds. The company Misr for Cinematic Production and were wrong, especially after ethics/morality and human dignity. celebrated on May 7, 1920. important to keep reading in our started with two Dragon aircrafts, is thus regarded as the Godfather Banque Misr was able to compile The bank was keen to help small hands and not in the hands of the twin-engine and a capacity of eight of Egyptian cinema. the Egyptians savings funds of manufacturers and craftsmen to National Economy and occupier. After the printing press, passengers. The first line was from the World War I era, which had withstand competition of English Development of Companies there were a series of Egyptian Cairo to Alexandria and then Marsa Resignation remained static and idle after the products in the Egyptian market. In the economic policy framework companies that were established Matrouh, and the second line was Despite the success of Talaat Harb rise in property prices. The bank In addition, it encouraged of the bank, Talaat Harb established by the Bank, such as the Egyptian from Cairo to Aswan. In 1934 a through Banque Misr and the performed its national task in contracting companies and a number of companies from the Company for Land Transport, line from Cairo to Jerusalem was enormous economic achievements growing deposits, in addition to financially supported them to time of the establishment of the which purchased its first buses launched. that had been achieved, the bank investing its profits in the creation break the monopoly of foreigners bank until 1938. To accomplish to transport passengers. These suffered a major financial crisis, of more than twenty companies. over these projects. Similarly, this, he cut a certain part of the were shown to the public in some Renaissance of Minds which the British occupation was Harb refused to head the bank there were situations where annual profits of the bank balance early Egyptian films, such as “El Talaat Harb believed that the behind. Thousands of depositors and left the post to Ahmed Midhat foreigners had lent money to sheet under the item “money Warda El Baidha” (White Rose), renewal of the Egyptian economy withdrew their money from the Pasha Yakan, while he stayed farmers and cooperative societies dedicated to the establishment or a film starring the great musician in a backward agricultural country bank and the crisis worsened after as Vice President and Managing against land, and in case they development Egyptian industrial Mohamed Abdel Wahab. The would not be possible unless the postal savings fund withdrew its deposits from Banque Misr, response to Qasim Amin’s second and the National Bank refused book “New Woman”. In other to lend money against the bank’s works, Talaat Harb confirmed that portfolio of securities. When Talaat his intellectual disagreement with Harb went to Hussein Sirri Pasha, Qasim Amin were not on Minister of Finance, to resolve this the issue problem, the only condition made of moral by the Minister to resolve the crisis liberation of the bank was the resignation of of women, Talaat Harb. So, he submitted his but was resignation to protect the bank. based on This great achievement which he the risk provided to Egyptians, continues of this to this day providing its services movement to the Egyptian citizen as a symbol that did not and a tribute to the memory of one seem to be than it is guarded by of the most prominent economists justified in the lives of military fortresses. Of course he that Egypt ever knew. He said in our women. He explained further was referring to banks that work comment to that crisis: “Talaat that there could be evil beyond, or for most people, and not the banks Harb should go and Banque Misr as a result of, this boom that could that are stolen by men of power, 90 should stay”. easily be exploited by intruders politics, and business. to achieve their own moral and Harb: The Scholar material interests. He always Suez Canal and more Talaat Harb was a multi-talented insisted that “…freedom which In 1911, Talaat Harb gave his person, and even without his kills infallibility is more harmful intellectual opinion on how to economic revolution he was than the veil”. instigate a cultural revolution nevertheless destined to become through his book “Egypt>s one of the leading thinkers and Talaat prescription Economic Treatment and writers. He began by writing In view of what Talaat Harb wrote Establishing a Bank for Egyptians”. books, revealing a special talent, at the beginning of the twentieth In 1912, his book “Suez Canal” beautiful style, and powerful century, we find that he sets out was written in order to refute the thought. Working as a journalist, very carefully all the mechanisms claims of England and France to he was also a successful figure. needed to create a real revolution extend a monopoly for the canal He had intellectual and influential that preserves the identity and for another 40 years after the 99 arguments with Qasim Amin in the basics of the nation, and we years ending in 1968. His very case of women’s liberation, where believe that we are still in great vocal campaign has been viewed he appeared to be a conservative need for the application of Talaat as a major force in the successful in his ideas and desire to preserve Harb’s “prescription,” particularly eradication of this colonial sacred traditions of our ancestors, as he was dealing with politics as scheme in its infancy. Talaat Harb yet demonstrating a flair for an endeavor and refused to deal consciously liked farmers and poor innovation and willingness to with it as protests and cheers. people and defended them. When benefit from Europeans inventions He also believed that economic lands were liquidated, he sought to and ideas. He started his intellectual independence is the real basis for sell that land to the peasants and writing in newspapers and wrote political independence, a statement he managed to do that in many his first book, “The Truth of Islam coming from the popular proverb cases. Some commentators insist and the Ottoman Empire”. His which says “If you want to own these actions confirm a socialist next book was titled “Education your decision then you must own tendency, yet at no time did he for Women and the Hijab”, in your bread”. Talaat Harb asserted try to push that framework. Even response to Qasim Amin’s book that independence comes mainly if there were some socialist ideas, “Women’s Liberation”, published through smokestacks and not from it was socialism stemming from in 1898. Not long after that he the mouths of guns. He believed the land of Egypt and designed authored “The Last Word about that banks and companies guard for its own citizens, not imposed Women and the Veil”, this time in the freedom of Egypt more from outsiders.