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Cover.qxp_Cover.qxd 5/12/20 3:11 PM Page 1 BUSINESS MONTHLY BUSINESS MONTHLY www.amcham.org.eg/bmonthly NOT FOR SALE MAY 2020 COVID-19 COVID-19 The public and private sectors are mobilizing resources to get ahead of the next stage of the crisis. ALSO INSIDE ▲ ▲ MAY 2020 MAY GCC’S LIFELINE ▲ ▲ AMERICA’S $6 TRILLION CANON ▲ ▲ CHANGING VENTURE CAPITALISM ▲ ▲ VIRTUAL MARKETING DISCOVER TRUE LUXURY WITH CIB PRIVATE CIB Private is your gateway to an exclusive world, carefully tailored for you. Discover our new segment that offers you the best in banking and investment solutions, and lifestyle benefits inaccesible to others. To know more visit www.cib/private.com TOC 1 page.qxp_TOC.qxd 5/12/20 4:21 PM Page 1 MAY 2020 VOLUME 37 | ISSUE 5 Inside 4 Editors Note 6 Viewpoint Regional Focus 10 Preserving GCC wealth With oil prices tumbling, the GCC need to diversify their economies. 12 American Impact Game of compromises The U.S. is rebooting its economy, with painful economic side-effects. Cover Story 20 Stepping up to save lives Local private firms are gearing up to help the government combat the spread of COVID-19. Cover Design: Nessim N. Hanna Changing World 28 Venturing into the unknown Venture capitalists have a sense of trepidation towards financing new clients. The Chamber 38 Events 44 Media Lite An irreverent glance at the press © Copyright Business Monthly 2020. All rights reserved. No part of this magazine may be reproduced without the prior written consent of the editor. The opinions expressed in Business Monthly do not necessarily reflect the views of the American Chamber of Commerce in Egypt. 2• Business Monthly - MAY 2020 Editorial.qxp_Editorial.qxd 5/12/20 3:42 PM Page 1 Editor’s Note Director of Publications & Research Khaled F. Sewelam Acting Managing Editor Tamer Hafez The race to open Contributing Editor Kate Durham ith governments raring to reopen their economies, one thing is clear: Consulting Editor recovery will largely depend on how the rest of the world responds. Bertil G. Peterson That could prove problematic for emerging markets, such as Egypt, which depend on international trade and foreign direct investment. Writers According to data from the central bank, Egypt does business with three major regions: Ola Noureldin Adam Skaria theW United States, EU, and the six Gulf Cooperation Council GCC countries. Worryingly, all are going through disruptive changes that could reshape their cross-border investment Senior Art Director and trade policies. Nessim N. Hanna The U.S. administration looks increasingly likely to get its way on boosting domestic Senior Graphic Designer investment to expand manufacturing. That could mean fewer dollars for overseas invest- Emy Emile ments and expansion. See American Impact, page 12. Not to mention, the ongoing global oil price crisis doesnt bode well for American oil giants, some of whom are the biggest Graphic Designer Verina Maher investors in Egypt. Meanwhile, to escape the trap of crashing oil prices, the GCC may prioritize economic Advertising & Business Development Director diversification, financing that strategy by sucking back liquidity from projects in the Amany Kassem MENA region. See Regional Focus, page 10. Advertising Specialist Lastly, the EU is still dealing with the worst of COVID-19, with each member state Lamia Seleit fending for itself. There is even talk about breaking up the bloc, similar to the U.K.s Brexit last year. Advertising & Ad Traffic Coordinator Rowan Maamoun Egypts government might be well-advised to use this crisis to minimize the countrys dependence on foreign investment and international trade. The cover story page 20 looks Photographers at how both startups and established companies are producing ventilators and personal Karim el Sharnouby Said Abdelmessih protective gear for medical workers that have long been imported. While COVID-19 has been the impetus for that response, it is not unreasonable to expect companies to continue Production Supervisor to replace imports with made-in-Egypt goods after the crisis. Hany Elias For its part, the government might consider policies that prioritize economic resilience, instead of a better business environment based on metrics as the World Banks annual Market Watch Analyst Amr Hussein Elalfy Doing Business Report. Such a switch would require more and faster investment in the state-owned medical system that is bearing the brunt of dealing with COVID-19. Chamber News Contacts Elsewhere, investments should be expanded in hygiene for public places and state- Nada Abdalla, Azza Sherif, owned facilities. Testing, both at borders and within the country, also needs significant Susanne Winkler beefing up to help contain the current health crisis and protect against the next one. Down the road, the government should align its infrastructure with the latest testing and tracing technologies and strategies adopted by other countries. That alignment will be vital for tourism, in particular. That all requires the government to listen to what businesses, big and small, need and effectively respond. With increasingly limited foreign investment, exports, and imports, local businessmen and entrepreneurs are all the government has to reboot the economy. And for the foreseeable future, that will have to be enough. U.S. address: 1615 H Street, NW • Washington, D.C. 20062 TAMER HAFEZ Please forward your comments or suggestions to the Egypt editorial office: Acting Managing Editor Business Monthly American Chamber of Commerce in Egypt 33 Soliman Abaza Street, Dokki 12311 • Cairo • Egypt Tel: (20-2) 3338-1050 • Fax: (20-2) 3338-0850 E-mail: [email protected] www.amcham.org.eg/bmonthly @BusinessMonthlyEg @BusinessMonthly @BusinessMonthly 4• Business Monthly - MAY 2020 Sponsored Content PANTONE 7409 C PANTONE 7732 C C 8 C 88 M 34 M 27 Y 99 Y 100 K 0PrioritizingK 15 the community Al Ahram Beverages has contributed EGP 5.6 million, as part of a private sector cooperation initiative with the Egyptian government in combatting COVID-19. In its continuous efforts to support Egypt, Al-Ahram Beverages Company (ABC) contributes 5.6 million EGP in several CSR projects to support Egypt in combatting COVID-19 as well as help those negatively impacted within the communities. ABC donated 260,000 liters of ethylic alcohol, 96% concentration to support the Egyptian Health authorities in combatting COVID-19 to the “Consolidated Purchase Authority” to be used in producing and distributing sanitizers for medical and hygiene purposes to help arm our Egypt’s white army. During the first days of COVID-19, ABC had also launched an awareness campaign within the communities where it operates. The campaign included the distribution of hygiene kits among 4,000 families containing antiseptic soap and awareness flyers on how to maintain basic hygiene and how to deal with others to avoid COVID-19 infection and transmission. Awareness posters were also communicated in major areas in various communities. With the occasion of the Holy month of Ramadan, and as customary to ABC, the company distributed 4,000 Ramadan bags among 4,000 families in ABC communities. The bags contain the basic staples needed by any Egyptian family during Ramadan (rice, pasta, oil, pulses, tea, sugar, and dates). This campaign was executed in partnership with Orman Association. On his part, Hans Essaadi, ABC’s Managing Director, shared a word “Social responsibility has always been a cornerstone of ABC and its operations in the Egyptian market and society, and in times of crisis, this responsibility is multiplied. For this reason, we will always continue our support, as a significant private sector player, to continuously provide support to the people of Egypt to fight COVID-19. Untitled-2 1 05/05/2020 12:48:39 Viewpoint.qxp_Viewpoint.qxd 5/12/20 4:22 PM Page 1 Viewpoint When a great challenge creates an opportunity to autocorrect he title of this month�s viewpoint could be de´ja` vu, and it is probably easier said than done. However, usually at a time of crisis, the more challenges individuals and societies face, the more opportunities present themselves to formulate creative solutions. For the past several months, the coronavirus pandemic has caused disruptions around the world, and it is difficult to think of any greater challenge that humanityT has faced in recent times. However, disruption brings advancement in the same manner that challenges bring opportunities. This could be an opportunity to autocorrect and harness an incredibly positive energy to create innovative venues for development and growth for Egypt. There is no doubt that a huge dilemma is in place. For Egypt, the primary issue is how to get the economy going while safeguarding the health of Egyptians, which is the utmost priority. This is a delicate balance, because both elements complement each other. Egypt�s plan to control the impact of COVID-19 will be critical for navigating these difficult times, mitigating the risks, protecting the economy and successfully helping it rebound. It is difficult to predict how the world will look post COVID-19, but it will surely be different. Our journey to the new normal must be cautiously gradual until a vaccine is developed and accessible worldwide. In the meantime, what should be our thought process? How can we prepare for the future? How can we do things better? For starters, we as a nation need to change our mindset and think in a competitive, agile and growth-oriented way that has Egypt�s young human capital at its core. Egypt thus far seems to be supressing the curve and, fingers crossed, might escape the worst of the pandemic. In the coming period, while some countries remain focused on flattening their curves to eliminate the virus, Egypt has a chance to return to business hopefully faster than others. This is not to say that there will not be some economic suffering.