B U S I N

E www.amcham.org.eg/bmonthly S S

NOT FOR SALE M O N T H L Y

MAY 2014

ALSO INSIDE: ▲ ▲ INSURANCE FUNDS A REALITY ▲ ▲ LIQUIDITY OVERFLOWS ▲ ▲ A DAY AT IKEA L A B O R

H E A D A C H E M A Y

2 LABOR 0 1 4 HINDEEPAENDDEANT CUNHIONE S TAKE A STAND

MAY 2014 VOLUME 31 | ISSUE 5

Cover Story 30 Guilt by association

Egypt’s independent labor unions are testing their mettle against the interim government. Labor activists say that the maturing independent unions are poised to make real gains for workers, that is if the next government doesn’t move to outlaw them.

Cover Design: Nessim N. Hanna

Inside 16 12 Editor’s Note

14 Viewpoint

The Newsroom

16 In Brief The news in a nutshell

20 Region Notes News from around the region

© Copyright Business Monthly 2013. 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.

8 I Business Monthly – May 2014

MAY 2014 VOLUME 31 | ISSUE 5

22 44

46 Market Watch Executive Life 36 Stock Analysis 44 Dining Out Market rebounds after a brief Discovering a classic sell-off

37 Capital Markets 46 House Beautiful A glance at stocks & bonds A day in the iconic IKEA store

39 Money & Banking Forex and deposits

40 Key Indicators The economy at a glance In Depth 41 Egypt-U.S. Trade The Chamber Imports and exports 22 Too much of a good thing 50 Events The banking sector faces increasing Corporate Clinic deposits, decreasing loans Member News 42 Entrepreneurship 55 The next step 58 Announcements

26 Insurance firms to set up funds 59 Classifieds managed by pros The EFSA allows investment firms to Media Lite manage insurance funds 60 An irreverent glance at the press

10 I Business Monthly – May 2014

Editor’s Note

Director of Publications & Research Khaled F. Sewelam NO JUSTICE, Editor-in-Chief Rachel Scheier

Assistant Editor NO PEACE Maggie Hyde n 2006, textile workers in the Nile Delta town of Mahalla went on strike, ending Contributing Editor Tamer Hafez years of political stagnation and lighting a spark that, five years later, would ignite the January 25 revolution. Organized labor played a key role in unseating President Staff Writer Hosni Mubarak, also emboldening Egypt’s independent union movement to press Mat Wolf forward with demands for higher wages and better working conditions. Two and a half years later, workers helped get rid of Mohamed Morsi. Art Director INow, with Egypt gripped by a wave of strikes in sectors from healthcare to public Nessim N. Hanna transport, its presumptive next president, Abdul-Fattah el-Sisi, faces a climate of grow - ing labor unrest from the country’s nascent independent unions, as Maggie Hyde writes Photographers in this month’s Cover Story. Alfred Alfons, Amanda Mustard Said Abdelmessih Since the Mahalla strikes, the plight of Egyptian workers has only gotten worse. Unemployment is officially at 13 percent, and 850,000 new graduates stream into the job Production Supervisor market annually, most of them lacking the skills companies need. Among those lucky Hany Elias enough to have jobs, real wages have plunged and working conditions have worsened. The interim government’s promise late last year to institute a LE 1,200 monthly mini - Advertising Director mum income for some public sector employees was largely deemed too little, too late. Amany Kassem On the other side of the table, meanwhile, Egyptian employers are hamstrung by pop - Advertising & Circulation Assistant ulist, Nasser-era labor laws that all but prevent them from firing unproductive workers, Raghda Salama a setup that likewise leaves employees with no incentive to excel and discourages firms from hiring. Recent court verdicts ordering the re-nationalization of several companies Market Watch Analyst and the mass rehiring of workers has further rattled investors. Amr Hussein Elalfy In late February, days after Egyptian soldiers were forced to fill in for striking bus drivers, Prime Minister Hazem el Beblawi resigned along with the rest of his cabinet. Chamber News Contacts Many speculated that Beblawi’s undoing was ultimately his failure to put an end to the Nada Abdalla, Nihal Alaa, strikes. His replacement, Ibrahim Mahlab, suggested in his inaugural speech that his Shorouk Genena government would have little patience with such labor actions. “It is time we all sacri - ficed for the good of the country,” he said. “Rather than asking what Egypt has given us, we should instead be asking what we have done for Egypt.” In March, authorities took five leaders of the striking post office union from their homes in the wee hours of the morning and charged them with engaging in terrorism. News of the arrests prompted droves of postal workers to take to the streets in protest. As Egypt’s leaders should have learned by now, police roundups and heavy handed crackdowns won’t solve the country’s labor problems any better than quick-fix, half- baked promises and empty political rhetoric. Rather, what’s needed are long-term poli - cies that empower independent unions to lobby fairly on behalf of workers, reform anti - U.S. address: 1615 H Street, NW • Washington, D.C. 20062 quated laws and enact policies that stimulate production—and jobs—in the private sec - Please forward your comments or suggestions to the Egypt editorial office: tor. Like it or not, the success or failure of Egypt’s next government is inexorably tied to Business Monthly American Chamber of Commerce in Egypt the success of its businesses and its workers. Like passengers on a giant ship, they will 33 Soliman Abaza Street, Dokki 12311 • Cairo • Egypt Tel: (20-2) 3338-1050 • Fax: (20-2) 3338-0850 sink or swim together. E-mail: [email protected] RACHEL SCHEIER www.amcham.org.eg/bmonthly CTP and printing: Sahara Printing Company, SAE – Nasr City Free Zone

12 I Business Monthly – May 2014

Viewpoint

FANATICISM

ttachment to a cause or an ideology goes only want to choose the best when it comes to our selves through different stages and is reflected in and our children and the same should apply to our country many forms. Social and cultural affinity is per - and our businesses. Belonging to a particular clan or having haps the most accepted form of attachment. It personal beliefs cannot be the basis of inclusion or exclu - is expressed in healthy feelings such as patriot - sion from the working team. We have to also avoid conflicts ism and extended family support. of interest, adopt good governance, and strive to motivate all But excessive attachment can lead to irrational support of an to collaborate as stakeholders as opposed to hired guns. interest. This can result in the exclusion of all other views. Any party, association or clan believing that they have the Such feelings culminate in advocating the advancement of a monopoly of determining what is right and wrong are doomed Acause or course of action through means which are unaccept - to fail. By the same token, any organization or country based able and often foolish, even by the standards of the most on diversity will continue to succeed. enthusiastic supporters of free expression. By hiring the best, we will be able to determine how to All examples of extremist isolation and attempts to impose maximize our resources to create excellence and acquire the views and disrespect differences have had catastrophic results, recognition that makes markets succeed and grow. This dragging humankind to the lowest levels of poverty and excellence will lead to specialization. No one country can devastation. manufacture or sell everything; that was one of the fallacies of Where do we draw the line? How do we distinguish solidarity the past. and the need to belong from unfair, disrespectful treatment of I am happy to see that the government is moving in the right others based on race, faith, gender, nationality or perceived social direction in terms of the fair treatment of all investors, within the standard? confines of the law and respect for contractual commitments. For one, we can make respect the basis of all constructive rela - Such messages are the best sort of emissaries for Egypt, because tionships and recognize true talent and value. We can do this in our just like human beings, countries and companies have to be everyday life as consumers and employees. Egypt needs this, as it treated equally and honorably. faces rampant divisive fanaticism which is by far the most At AmCham we indiscriminately recruit the best when it destructive danger facing the nation. comes to staff. We also try to attract the best diversified To deal with reality and objectively diagnose the roots of our membership, and remain at equal distance from governments problems, we need to attract the best away from fanaticism. We and political parties. ANIS A. A CLIMANDOS President, AmCham Egypt

14 I Business Monthly – May 2014

In Brief

Chipping away at subsidies In a preliminary step towards lifting the country’s decades-old energy subsidy pol - icy, the Egyptian government announced last month that it will double the price of natural gas that is piped into some resi - dences and commercial buildings starting in May. A government decree, issued April 20, said residential and commercial users consuming less than 25 cubic meters of gas per month will pay LE 0.40 per cubic meter. The Petroleum Ministry's S E V I

website shows the current price of gas for H C R A households at LE 0.20 per cubic meter. Y L H T

The new prices will not apply to bak - N O M

eries, which produce Egypt’s subsidized S S E N bread, or to the electricity generation sec - I S U tor, the largest consumer of natural gas in B the country, according to a Reuters report. EGYPT’S HOUSEHOLDS WILL SOON BE PAYING MORE FOR COOKING GAS State news agency MENA reported that this step would increase state revenues between LE 800 million and LE 1 billion, website, officially launched April 8, is would become pillars in the building of “which will be used to finance projects titled “A specialized blog for serious fiscal policies.” The blog comes as part that deliver natural gas to homes and discussion on the subject of economy of an effort by the government to get expansion (of the grid),” according to an and finance.” better in touch with Egyptian public unnamed Ministry of Petroleum official. So far, the blog’s posts have dis - opinion. Prime Minister Ibrahim Most Egyptians are not connected to cussed Egypt’s energy crisis and the Mahlab announced that the government the natural gas grid that can directly pipe government’s decision to employ coal will be starting a hotline to field com - the fuel into their homes. The majority as an alternative energy source, also plaints about the government’s perfor - still rely upon canisters of butane, which soliciting citizen’s opinions on topics mance and social services. are also subsidized, though for which such as economic policies of the past there is a flourishing black market. three years and whether they support changing the current energy subsidy Egypt approves coal system of directly subsidizing fuels After months of discussing the idea, the into a system in which citizens are government announced early April that Ministry of Finance given a lump sum of cash. it will allow the use of coal for energy takes to the web In a statement on the blog, Minister of production, as the country struggles Egypt’s Ministry of Finance has start - Finance Hany Demian said that he and with an on-going fuel shortage. The ed a blog, in an effort to improve com - and a team of specialists will follow up decision comes after a long debate munication with the public about the on the ideas and suggestions from the within the government over coal’s government’s financial policies. The blog, in the hope that “participants effects on the environment.

16 I Business Monthly – May 2014 In Brief

For months, cement companies, fac - ing shortages of natural gas amid the current crunch, have been lobbying for the government to approve the use of the alternative fuel in order to keep their factories running. Cement compa - nies Lafarge and Suez Cement told Reuters that the industry is operating at half capacity since the gas cuts began in January. In April, the industry minister announced that coal can be used as early as September, according to an Associated Press report. Egypt’s Minister of State for S E V I

Environment Affairs Laila Iskander H C R A had opposed the decision, saying the Y L H dirty-burning fuel will have high indi - T N O M

rect costs for the country in the form of S S E N deteriorating public health and I S U increased pollution. A number of B EGYPT’S CEMENT COMPANIES WILL BE USING COAL TO FUEL OPERATIONS NGOs have also sided with the envi - ronment ministry, releasing a joint statement through the Egyptian nine-month grace period to settle its legalise the statuses of their vehicles, Initiative for Personal Rights and the account. Kuwaiti Oil Minister Ali al- according to state media. Following the Egyptian Centre for Social and Omair said the renewed contracts also grace period, drivers of the vehicles who Economic Rights, in which they said mean that his country will be looking for do not hold licences may face confisca - that the government’s decision violates investment opportunities in Egypt’s oil tion, according to a report by the constitution’s articles on sustain - and gas sector. AhramOnline. able development and will have “dev - Kuwait joins other Gulf States that Egypt’s State Commissioners astating consequences on health and have stepped up to help Egypt financially Authority (SCA) enacted an official the economy.” since former President Mohammed import ban in late March, and said that Morsi’s ousting in July. Since then, Saudi due to their small size, tuk-tuks are used Arabia, Kuwait and the United Arab to commit crimes and are a serious Kuwait to continue oil Emirates have given more than $12 bil - threat to security in several areas nation - lion to cushion Egypt’s budget, as well as wide, particularly in poorer areas. The exports to Eypt providing petroleum products. “We will Egypt is renewing contracts with Kuwait government announced in February that overcome any difficulties plaguing for the continued import of oil and other it was going to ban the import of the Egypt,” al-Omair told Al-Masry Al-Youm . petroleum products, as the country strug - three-wheeled vehicles and motorbikes, “We will not hesitate to help them. gles to deal with a crippling energy crisis. and ban the import of their parts for six Anything can be resolved through mutual Kuwait's al-Seyassah newspaper months, on a trial basis . agreement.” reported on April 7 that Kuwaiti and Egyptian officials were due to meet to agree on details of the supply contracts. Consumer confidence falls The newspaper said Kuwait would supply Government reins Egypt's consumer confidence declined 2.25 million barrels of oil and 1.2 million in tuk-tuks in February from the previous month, metric tonnes of petroleum products per Egypt’s traffic authority has been attempt - according to an April report from the month from the beginning of May next ing to issue licenses for existing motor - state-run Information and Decision year. bikes and three-wheeled vehicles com - Support Centre (IDSC). Al-Masry Al-Youm reported that under monly known as tuk-tuks over the past The report said the consumer confi - the new contracts the Ministry of month, as part of a government attempt to dence index slipped 4.4 percent in Petroleum will be receiving Kuwaiti oil formalize and control the popular mode of February, citing pessimism among edu - for at least another three years. The con - transport. cated youth respondents. It was a tract also has a relatively flexible payment Owners of the motorcycles and tuk- reverse from January's trend, when the plan, giving the Egyptian government a tuks were given the month of April to index rose by 12 percent.

Business Monthly – May 2014 I 17 In Brief

STREET SENSE

Have or would you ever take part in a strike at your workplace? Why or why not?

I’m not a blue-collar worker, I’m a desk employee, so I have never been to one of these strikes. I don't think that I will ever participate in something like that, because such strikes are for those who are objecting to work con - ditions or pay. I believe that only the distraught workers should take part in a strike because their numbers show the real size and true nature of the problem the employ - er has with his employees. Tarek El Shenawy, 35, logistics specialist

At the factory where I work we had a strike which just ended a couple of days ago. Our representatives struck a deal with S E

the management, and we didn't get everything we wanted, V I H C

but he met our basic demands for better health care, an R A

Y

annual raise, and profit sharing. I don't think I will take part L H T

in another one because I got what I wanted, and I realized N O M after I returned how much I had to do after a week of not S S E

working. N I S

Ibrahim Atef, 29, dairy factory worker U B THOUGH WORLD-RENOWNED FOR ITS COTTON, EGYPT’S PRODUCTION OF THE CROP IS DECREASING I would not be a part of any future strike, even if I agreed with its demands 100 percent. I did go on strike once before and I saw how the demands were changed and the violence The family income sub-index except in the case that Egypt has used escalated after a small extremist group of employees took decreased by 7.2 percent in February, its entire domestic crop. over the movement. In the end, the employer told us he mostly tied to expectations of decreasing One of the world's most renowned cot - could not afford to meet our demands and that he had to ter - income or stagnant wages in the future. ton producers, Egypt has been dwarfed minate our contracts because we hadn’t been working for two weeks and the labor law allows him to fire us on that According to the report, only 16 percent by the production capabilities of China, basis. Thankfully my job as inventory keeper was important of Egyptians are seeing an annual increase India and the US in recent decades. As enough that he gave me the option to stay with the same in their monthly income. cotton prices have fallen, the crop has package. I chose to stay. The data also highlighted a genera - grown less attractive for local farmers Abdel Fattah Rashid, 51, inventory manager tional divide on optimism, with and many factories have moved to using I wouldn't join one of these strikes because it doesn’t per - Egyptians between 18 and 20 being the imported long-staple cotton. sonally affect me. I don't work and my husband is a small most pessimistic and those over 50 business owner. But I definitely sympathize with the being more sanguine about the country’s demands of distraught workers and their demand for a economic future. Prices inch upward respectable life, regardless of what that entails. Egypt’s consumer price index rose by Rasha Mahmoud, 41, housewife 0.68 percent in March, a tapering from February’s 1.03 percent increase, accord - While I sympathize with the workers who go on strike, I Cotton exports decline don't think I will participate even if the strike is in my Egypt’s cotton exports continue to ing to data from the Central Bank. But workplace. I am a civil servant, and I know what it means shrink, declining by 42 percent Egyptians face an annual inflation rate of to work for the government and I understand the most between September and November of 9.82 percent. effective ways of making more money while working 2013, the first quarter of the 2014 agri - The basket items that saw the steepest there—you either take bribes or have another job. I cultural season, compared with the increases were poultry, which increased need this government position for medical insurance and a pension, so I will not put myself in a position where I same period last year, according to an by 3.57 percent, red meat, which could get fired. AhramOnline report citing the state increased by 2.21 percent, and seafood, Kamal El Gamal, 45, civil servant information center CAPMAS. The which increased by 2.67 percent. Cheese decrease is a continuation of last year’s prices also went up by 2.37 percent. I have and will always join in whatever strike I can go to. trend, when cotton exports dropped by In April, the government launched a These workers have no one to speak for them or rally for their rights. I believe I am educated enough to go out 40.2 percent. The government attrib - short-term discount initiative from April 5 there and gather support for their cause. Sometimes uted the decline to the rise in the glob - to April 15 to briefly relieve the country’s when the strike needs a push, I even get some of my col - al price of cotton. poorer classes from the high prices, with leagues to gather people to participate. Meanwhile, Egypt's administrative discounts on a number of basic products Magdy Mohamed, 24, worker activist, unemployed court refused a plea this month from such as cooking oil, tomatoes, rice, meat, cotton traders asking for the country to fish, da■iry products, juices and canned COMPILED BY TAMER HAFEZ prohibit the import of foreign cotton goods.

18 I Business Monthly – May 2014

Region Notes

Caspian Black Sea Sea

TURKEY

CYPRUS SYRIA IRAN TUNISIA Mediterranean Sea LEBANON IRAQ MOROCCO ISRAEL JORDAN KUWAIT SYRIA PALESTINIAN Persian Gulf ALGERIA LEBANON TERRITORIES BAHRAIN QATAR LIBYA ISRAEL EGYPT UAE OMAN JORDAN SAUDI ARABIA

Red Sea

YEMEN SUDAN Arabian Sea

SOUTH SUDAN Map intended for illustrative purposes only and may not accurately SUDAN depict national boundaries or disputed territories.

Atlantic Ocean

■ Syria to hold presidential been equally critical, with U.S. State matter. Hamas has been politically isolated elections amid bloodshed Department spokeswoman Jen Psaki call - after losing a Ikndeiayn Oscuepapn orter in ousted ing the election “hollow.” Bloomberg Egyptian President Mohamed Morsi, and Despite heavy criticism from the interna - meanwhile reported that Assad’s ally, an important base of operations in tional community, Syrian president Bashar Russia, has intensified its already strong Damascus due to the Syrian civil war. al-Assad is widely expected to win his material and military support to the Syrian country’s planned presidential elections, ■ government as the elections approach. UAE’s largest bank gets push set for June 3. The 48-year-old Assad, who from 2020 World Expo announced his candidacy late April, has ■ Hamas and Fatah seek unity ruled Syria since assuming the position left government Emirates NDB, the United Arab Emirates’ vacant by his late father Hafez al-Assad in largest bank, has soared past analyst esti - 2000. Since 2011, he has been embroiled After a 7-year rift following the 2006 elec - mates and achieved a 25 percent jump in in an intense civil war against opponents tions that gave control of the Gaza Strip to first quarter profits Bloomberg reported. who seek to end the country’s decades- Hamas and caused armed clashes between The bank’s interest income and fees long, one-party, one-family rule. The con - the two most prominent Palestinian politi - growth were behind the high performance, flict has killed at least 150,000 people, and cal factions, Hamas and Fatah announced making up for its decision to increase its displaced as many as 9 million in addition in late April they will try to form a unity provisions for bad loans, money banks set to destabilizing already delicate security government. The move, which surprised aside in case of default. The bank also ben - situations in neighboring Iraq and international observers, was criticized by efited from rising property prices and con - Lebanon. Although according to some the U.S. and Israel, both of which classify struction in Dubai after it won a November government sources voting will take place Hamas as a terrorist organization. The bid to host the 2020 World Expo. Net prof - in rebel-held areas, the election results are BBC quoted Israeli Prime Minister it at Emirates NDB climbed to around widely expected to be a fixed, forgone con - Benjamin Netanyahu as saying Palestinian $283 million, compared with $228 million clusion that will award Assad another Authority President and Fatah leader last year, according to a statement from the seven-year term. U.N. Secretary General Mahmoud Abbas would have to choose government controlled lender on April 24. Ban Ki-moon was quoted by the BBC as between peace with Israel and peace with In addition to Expo-related growth, the saying the election plan could “torpedo” Hamas. The U.S. State Department called UAE, the Arab world’s second largest efforts to achieve a peace agreement in the the move disappointing. Abbas, however, economy, has been experiencing a lending country, and both the U.S. and EU have said the move is an internal Palestinian and investment boom.

20 I Business Monthly – May 2014

In Depth S E V I H C R A

Y L H T N O M

S S E N I S U B

FINANCE

TY AOMER OAFEZ MUCH OF A GOOD THING B T H

n mid-April, representatives of goods. What’s more, “Local importers businessmen. After all, why should a various sectors met at the can't even obtain letters of guarantee bank grant a loan to a struggling compa - Federation of Industries to dis - with local banks to guarantee payment ny when it can collect a handsome inter - cuss a financial crisis facing to their foreign counterparts,” grumbles est rate on a guaranteed government- Egyptian factories, which des - Atef, explaining that this interferes with backed treasury bill? But this theory— perately need cash to stay afloat the availability of raw materials, and which has been repeated frequently over amid the current downturn. Problem is, ultimately production. “When factories the last year—is only half true. Banks such financing is not forthcoming. aren’t working, the economy isn’t grow - have generously financed government Factory owners say banks aren’t granti - ing,” he says. debt in the form of t-bills and t-bonds, ng them loans they desperately need to In late March, trade, industry and which are not only safe but have yielded stay afloat at a time when sales are way investment minister Mounir Fakhry record returns over the last year and a Idown. “Commercial banks are only Abdel Nour echoed Atef’s point in a half. It’s also true they’re not lending to interested in financing the government,” speech in which he said that the cash- the private sector—especially not to says a frustrated Ahmed Atef of the strapped Egyptian state has borrowed so small businesses. The one thing Abdel Sixth of October Investors Association, much money from local banks over the Nour didn’t mention is that Egyptian which represents factories producing last three years that it had effectively banks have plenty of cash at the textiles, processed foods and other taken food out of the mouths of local moment. In fact, they have too much.

22 I Business Monthly – May 2014 In Depth

The average loan-to-deposit ratio of all these factors, profit margins for the Small-time investors are also saving. Egyptian banks has plummeted steadily banking sector averaged 2.8 percent last As gold lost some 78 percent of its value over the past three years, reaching an all- year, down from 3.2 percent in 2012. in 2013, its investors cut their losses and time low of 42 percent in December, “We expect this tightening of margins to sold their holdings of the precious metal. meaning the banks only lent out 42 per - continue well into 2015," says Lamia El With real estate too expensive and cent of their cash, down from 47 percent Etriby, a senior equity analyst at inflexible and stocks too volatile, the a year earlier. In developed economies MubasherTrade Research. only other palatable option for such like the United States, by contrast, banks investors is to simply put the cash in the have loan portfolios that are roughly “BUSINESSES SHOULD, BY THE bank, where they could at least still see START OF THE SECOND HALF equal to their total deposits. But here in their bottom lines grow. Most Egyptians, OF 2014, SEE AN INCREASE IN Egypt, local financial institutions are sit - CONFIDENCE ENOUGH TO of course, “either save money in banks ting on their money, apparently awaiting START DEMANDING LOANS or keep it under the rug,” says Hamdy risk-free (or at least less risky) invest - FROM BANKS TO EXPAND Azzam, an executive board member at ment opportunities. The problem is that THEIR OPERATIONS” the Industrial Development and Workers if Egyptian businesses can’t access capi - Bank. There is also the fact that the gov - tal, they can’t afford to expand—or, in a This trend, too, has larger implications. ernment has been printing more money growing number of cases, stay open. Since 2004, when reforms liberalized the recently. Local currency circulation has Besides the stock market, banks are industry, allowing commercial banks to increased by 72 percent (LE 112 billion) companies’ only formal source of capi - flourish, the banking sector has been over the past three years. tal. If that option disappears, especially regarded as a pillar of Egypt’s economy. On the other hand, deposits have kept during hard times, there is little firms can Banks were considered instrumental in growing despite the Central Bank slash - do other than rely on luck—and pray. helping Egypt’s economy to grow by 4.8 ing interest rates by a total of 150 basis Recent figures from the Industrial percent in the 12 months following the points since July as it sought to help Modernization Center indicated that 2008 global financial crises. In the three spark an economic recovery, in keeping 4,500 Egyptian factories are currently tough years that followed the 2011 revo - with economic theory. Rather than push - struggling to stay up-and-running, while lution, the banking sector grew by 33.4 ing people to spend and invest more in 960 said they had been forced to halt percent, as Egyptians looked to banks as a the economy, however, the drop in inter - production due to financial problems. safe haven for their money. est rates merely inspired Egptians to put They overwhelmingly cited a lack of However, this also contributed to the more money in the bank to make up for access to capital as the main factor current unbalanced state of affairs. The the lost interest income. "This whole sit - behind their current woes. The trade and loans to deposit ratio plummeted by a 18 uation is unprecedented," acknowledges investment minister himself remarked percent from November to December, Ahmed Adam. the National Bank of Abu recently in state-owned Al Ahram that marking one of the biggest month-on- Dhabi former head of research. the dearth of financing was the biggest month drops in Egypt's banking history, Meanwhile, thanks to infusions of aid problem facing the industrial sector, with as deposits grew to an all-time high of LE from the Gulf since Morsi’s removal, the 84 percent of factories suffering from 1.3 trillion. In the same month, non-gov - government is less desperate for cash, money issues. This situation clearly ernment loans shrunk by LE 4.6 billion to and t-bills, which yielded as much as 15 doesn’t spell recovery for Egypt’s total LE 546 billion. While deposits and 16 percent in the first half of 2013 foundering economy. Abdel Nour esti - increased by 21 percent in 2013, loans are now giving more down-to-earth mates that investments must increase to grew by just 6.5 percent. returns of 10 to 11 percent. A year or so around 30 percent of GDP from the cur - To some extent, the excess liquidity in ago, banks were so stretched for cash rent 15.7 percent this year in order to banks is a predictable symptom of the lag - that the CBE dropped the minimum realize the kind of growth rate that could ging economy. The credit departments of amount of cash banks are allowed to put a dent in unemployment. banks are more careful, deeming many have on hand to 10 percent from 14 per - Banks themselves are drowning in this businesses applying for loans as too risky. cent of total liabilities to give them excess liquidity: The more money there Especially when times are tough, “It is the enough liquidity to lend to the govern - is sitting in the bank, the more the bank duty of the bank to seek the safest invest - ment. Having gotten spoiled by safe, has to pay out in interest, while it also ment options," says Ashraf Abdelghany, high-yield t-bills, however, banks seem means less capital invested in the mar - head of credit at Al Watany Bank. reluctant to begin financing the private ketplace generating profits. Moreover, Meanwhile, businesses parked what little sector again. yield on t-bills, which have comprised a excess capital they had in the bank rather That’s problematic, as banks have growing portion of local banks’ invest - than putting it toward expansions or other, always depended on the income from ment portfolios, have dropped signifi - riskier investments—private sector busi - issuing new loans as a core revenue cantly since the ouster of President ness deposits increased by more than 43 stream. Still, it’s unlikely to change Mohamed Morsi last July. As a result of percent last year. before late May, as investors are holding

Business Monthly – May 2014 I 23 In Depth

their breaths for a few more months until presidential elections are held, which everyone hopes will bring a new climate of stability. “They are not in a rush,” says Azzam, of Industrial Development and Workers Bank, who predicts that bor - rowing will nonetheless perk up again in the coming three to five years. In the meantime, banks are cutting costs. Their net profits did increase by 17.7 percent in the first quarter of the fis - cal year compared to the previous year, but that was mainly thanks to costs drop - ping by 26.6 percent. Operations rev - enue is still down by 16.3 percent. To make up for the loss, banks are looking to promoting fee-based transactions and services imposed on transactions and services. They are also looking increas - ingly to retail banking, including issuing personal loans and credits cards. The lat - ter remains a vastly unsaturated market in Egypt, with only about 2 million cred - it cards in circulation for some 10 million

bank accounts. “The retail market is

S

E V

growing in double digits," says I

H

C

R A

Mohamed El Toukhy, CEO of consumer

Y

L H

banking at CIB, adding that Egyptians T

N

O M

are more careful about carrying cash

S

S

E N

than they were pre-revolution. I

S U Nonetheless, experts say Egyptian B banks must change their lending strate - gies if they are to remain prosperous. order to attract such loan customers. Islamic Banking at Banque Misr. Deputy CBE governor Gamal Negm “They have to offer those enterprises a Major, long-term PPPs would likely called a meeting with all 39 banks in lower interest rate than they give for carry high up-front costs, and at a time mid-March, in which he called on the larger corporations,” he said. Negm of ongoing volatility, insuring assets banking sector to broaden its lending added that the Central Bank was study - and timely loan repayment could be strategy. “Treasury debt yields are down, ing the possibility of allocating a com - challenging and risky, says Hamed. and commercial bank clients are at their mercial bank loan fund that would allo - Experts agree that banks will have to lending limits and therefore can’t take on cate funds specifically for low-interest loosen their purse strings sometime if more debt,” he told reporters following loans to qualifying micro, small and economic conditions are to improve—to the meeting. “Looking for new sources medium-sized enterprises. get factories back up and running and [of revenue] is crucial.” Another route officials are pushing people to go out and spend and invest Among the ideas Negm pushed was banks to consider is financing Public- their money rather than stashing it away for banks to provide more financing for Private Partnerships, which could soak for the next rainy day. “Businesses small and micro-size enterprises, which up quite a bit of Egyptian banks’ excess should, by the start of the second half of make up some 75 percent of the private liquidity, given their large scale. “This 2014, see an increase in confidence sector in Egypt. “The switch will defi - could quickly raise the low loan-to enough to start demanding loans from nitely entail more risk,” he acknowl - deposit-ratio,” says Abdelghany of Al banks to expand their operations,” pre - edged. “But the number of MSEs has Watan Bank. Issuing large loans to PPPs dicts Etriby, of MubasherTrade been increasing more quickly than could also provide a boost to the larger Research, who quickly adds that this is medium and large scale businesses.” economy—at least, in theory. all dependent, of course, on the ever-elu - He added that banks would have to “Our problem with such projects is sive return of political stability and secu - rethink their traditional high-risk the delays and bureaucracy,” says rity in the streets. And that■ is anything means high-interest rate strategy in Mohamed Hamed, group head of but a foregone conclusion.

24 I Business Monthly – May 2014

In Depth

INVESTING INSURANCE FIRMS TO SET UP

FY UAMER NAFEZ DS MANAGED BY PROS B T H K C O T S I

ocal industries from ing their lives, businesses and prop - premiums) via asset and fund man - tourism to cement have erty against loss. In the last three agers. The regulatory change comes struggled to stay afloat in years, the industry has grown at an in the wake of the Central Bank’s the three hard years since annual rate of 15 percent. recent decision to dramatically limit the January 25 revolution, as Egypt’s Now the government, in its effort banks’ investment funds, a move that economy took a nosedive. One big to stimulate investment in Egypt’s will effectively close such funds to Lexception was the insurance sector. lagging economy in any way it can, new investors. Financial industry In fiscal 2011/12, even as payouts for is looking to insurance companies. In insiders say the EFSA decision could claims skyrocketed for damage sus - late February, the Egyptian Financial effectively enable the insurance tained in connection with the upris - Supervisory Authority issued new industry to pick up that slack. “The ing, profits expanded by a whopping rules that will enable insurance firms whole idea is to capitalize on the 43 percent over the previous year, to to establish professionally managed CBE cap on bank investment funds,” LE 894 million, as Egypt’s largely investment funds. In the past, they says Sameh Khalil, managing direc - unexploited insurance clientele were barred from investing so-called tor and head of fixed income at CI began to see the upside of guarantee - restricted cash (money from clients’ Capital.

26 I Business Monthly – May 2014 In Depth

Regulators say the changes are designed to “help firms manage their fund portfolios in a professional manner and help portfolio manage - ment companies and investment funds to find an additional source of income,” in the words of EFSA Chairman Sherif Samy, speaking to Reuters in early March. Local insur - ance companies paid out almost LE 1 billion in claims to cover damage inflicted to homes and businesses between Jan. 25 and Jan. 28. Despite those costs, the uprising was a long- term boon to the industry as people scrambled to insure their property and other valuables in the insecure climate. “In many cases, the policies didn't legally have to cover the loss, but we did anyway,” says Alaa El- Zoheiry, managing director at Arab Misr Insurance Group (known as Gig Insurance). “Now we are seeing new K clients and existing clients that want C O T S more coverage.” Mohamed Moeit, I deputy chairman of the EFSA, believes there is much more room for future growth as the market is still them selves have acknowledged that With banks now forced to turn away undersaturated, with most registered this stream of investment income is would-be fund investors like Abdel businesses lacking insurance poli - not sustainable. Naby in light of the new CBE cap, the cies. The sector contributes around Meanwhile, experts estimate that new insurance funds will be in a prime just 0.5 percent of GDP in Egypt banks will be forced to shrink their position to capitalize on them. “There compared to 3 to 3.5 percent in local money market funds by some is no logical reason why an insurance neighboring countries such as LE 16 billion to comply with the company would turn down the option Lebanon and Jordan. Central Bank’s announcement last of assigning its investment fund to a Like banks, insurance companies year that it was capping fund size to professional,” says Mohamed Nour, have reaped enormous profits over 2 percent of bank capital instead of 5 head of investment at Gig. Last month, the last three years from the the high percent, a decision that caused grum - the firm became the first to launch interest rates on government debt, in bling among some fund managers. It such a fund, a money market fund which they invested a substantial por - also put a crimp in the financial worth LE 50 million, to complement a tion of their holdings. At their peak in plans of Egyptians like Bishoy Abdel LE 21.8 million fund the firm has 2013, the return on state-issued trea - Naby, a 59-year-old a senior finan - managed on its own since 1995. sury bills exceeded 15 percent, as cial officer at a multinational firm Regulators granted preliminary Egypt was forced to borrow heavily who plans to retire next year. His approval to Delta Insurance and Arope to cover its costs. “We have been monthly pension will be, at most, Life Insurance for similar money mar - investing mainly in treasury bills in around LE 2,000—“peanuts,” says ket funds worth LE 50 million. The the past three years because there has Abdel Naby. “At my age, I am not Egyptian Saudi Insurance House will been a lot of uncertainty around other ready to compromise on my also set up two LE 50 million Sharia- investment vehicles,” says Zoheiry. lifestyle,” he declares. His plan, compliant funds, one that aims to Since the ouster of President therefore, is to park the bulk of his invest in stocks with accumulative Mohamed Morsi and the heavy end-of-service pay in an investment return, the other in fixed income tools infusions of cash aid from the Gulf fund that guarantees him at least a 10 such as treasuries. Proposals from that ensued, however, yields on t- percent return, which he figures will Misr Insurance, Misr Life Insurance bills have steadily dropped to around amount to just about enough to live and Egyptian Life Takaful are also in 10 percent. Insurance executives on comfortably. the pipeline, according to regulators.

Business Monthly – May 2014 I 27 In Depth

size according to company fundamen - tals. Smaller funds naturally generate smaller profits, and there is less lee - way for risk-taking. Therefore, only big insurance firms will be able to generate significant profits. Moreover, those limits on fund size could go up or down from quarter to quarter, depending on how the firm is faring, making it difficult to carry out long-term strategies. “It would make it very hard to manage the fund if the upper limit is always changing,” says Radwan, of HC Securities. Khalil suggests that money market funds for several small to medium-size insur - ance companies might merge, creat - S E V

I ing more flexibility and bigger prof - H C R

A its. “It would definitely work for

Y L

H smaller insurance firms that want in,” T N O

M says Khalil.

S S E He suggests that the real opportu - N I S U

B nity may be for insurance companies to establish privately-managed pen - sion funds, thereby providing some Brokerages will be required to competition among asset and fund relief for the cash-strapped govern - consult with the EFSA on a quarterly management firms. Since brokerages ment as well as better retirement basis by providing detailed informa - are subject to more stringent disclo - income for pensioners. “This would tion on strategies, investment calcu - sure and transparency laws, some be a very good idea,” says Khalil, lations and returns pertaining to each experts point out that transferring the explaining that such funds could fund. Insurers' funds can be invested task of managing insurance funds to invest in low-risk vehicles like trea - in cash deposits, bank saving certifi - them will ultimately benefit suries, bank deposits or even other cates, government securities, bonds investors and insurance customers in pension funds. Such pension funds and sukuk, or Islamic bonds, as well other ways. “They will follow gover - could also provide a low-risk invest - as mutual funds and stocks; but spe - nance regulations set for the stock ment alternative to t-bills. cific restrictions apply to the per - market, which means unprecedented With investment opportunities lim - centage of cash that can be invested transparency regarding investment ited in these dark economic times— in each avenue. Moreover, the size of decisions," says El-Sayed Bayoumi, interest rates are down, bank funds the funds will be limited by regula - head of investment in the property are closed and the stock market tors’ assessment of the firm’s future division of the Egyptian Takaful remains volatile—the new rules may solvency. The idea is to limit risk Insurance Co. open up a sound avenue for invest - while encouraging the possibility of Some money managers point out ment. Many believe that the smart higher returns. Insurance companies that the strict regulatory parameters money is on insurance funds for generated some LE 4 billion in designed to protect insurance clients, those seeking a relatively low-risk returns on investments in fiscal however, could make the funds com - investment vehicle that nonetheless 2012/13, according to government plicated to manage. As a result, some offers higher returns than a savings statistics—a billion pounds more are skeptical that such funds will account. As the local insurance than the previous year. Experts result in the all around payday that industry continues to grow, the sec - expect those profits will only expand government regulators are currently tor has the potential to inject a huge with the benefit of professionals han - touting. While the minimum size of amount of cash into such funds. They dling the funds. professionally-managed investment key question is whether they will be This also frees up insurance firms funds is typically LE 1 billion, insur - properly regulated and well-man - to concentrate on their core business, ance funds generally will not be per - aged. "Invested cash is like a car,” insurance, while the new investment mitted to exceed LE 200 million, says Nour. “The bigger it is, ■the more business is expected to stimulate thanks to EFSA rules limiting their skill you need to drive it.”

28 I Business Monthly – May 2014 In Depth

COVER STORY

30 I Business Monthly – May 2014 GUILT BY ASSOCIATION Since the January 25 revolution, independent labor unions have grown into a force with which to be reckoned. But can the fractious independent union movement ultimately better the plight of Egyptian workers? And will the new government treat organized labor as anything more than a threat?

BY MAGGIE HYDE

Business Monthly – May 2014 I 31 In Depth

t 9:30 on a recent place since the 2011 revolution, but they treaty with the International Labor Friday morning, an have intensified recently. For months Organization, even though they were hour when most now, doctors, bus drivers, pharmacists, illegal at the time. Egyptian labor unions Egyptians are either and postal workers have staged strikes, had been state-run since the days of preparing for Friday many of them lobbying for a LE 1,200 President Gamal Abdel Nasser, who prayers or still in bed, minimum income promised by the gov - pushed the idea that the government scores of representatives from across ernment late last year in a bid to calm alone should advocate for the workers. Egypt’s labor spectrum gathered in an labor unrest. However, it has since A 1976 law banned non-public unions. upstairs room at the Sons of Upper Egypt become clear that the minimum wage, However, state-run unions—staffed social services center in Abassiya. Sheiks which politicians initially said would over the years with regime loyalists— in Azhari dress drank tea alongside facto - benefit all public employees, will only had little incentive to represent the inter - Ary workers in jeans and mingled with old apply to those working directly in gov - ests of employees. By 2006, when school political types in expensive suits. ernment offices, skipping public work - 20,000 Mahalla factory workers formed All were there to attend a conference enti - ers like doctors and bus drivers. Some their own union and went on strike, tled “Defending Egypt’s Independent unions have suspended their strikes tem - workers around the country followed Labor Unions,” but it felt more like a porarily until presidential elections take suit. Since the revolution, the indepen - political rally. In the middle of a speech place in late May, figuring they might as dent labor movement has gained real about the importance of the workers’ well wait for a permanent government momentum, but the movement remains movement to democracy in Egypt, the to whom they can make their demands. divided and chaotic. crowd erupted in spontaneous chants of However, some fear for the future of Many political observers and analysts “freedom for unions,” and “we said yes to Egypt’s nascent independent labor say the January 25 uprising took place the constitution, where’s the minimum union movement, which has been the largely thanks to the workers in wage?” Most of the attendees seemed driving force behind many of the recent Mahalla, where much of Egypt’s textiles nonplussed by the shouting—after all, strikes. With the likely ascendance of are produced, who held a strike the this is what happens when workers gath - former field marshal Abdul-Fattah el- week before the resignation of former er. And the workers, it seemed, had reason Sisi to the presidency in a few months, President Hosni Mubarak. “If workers to yell. One stood up to say that he and his labor leaders are worried about the mil - hadn’t have struck, would the revolution colleagues had not collected a salary for itary government’s crackdown on have happened? No!” said Ahmed three months . strikes that could once again resemble Fawzy, general secretary of the One thing you can say for the the Mubarak era. Recent rhetoric about Egyptian Social Democratic Party, at the Egyptian labor movement: This isn’t a fighting “terrorism” and securing stabil - Abassiya rally. And while most of the crowd that sleeps in. Persistent strikes, ity at any cost has gone hand-in-hand country is worn out by political instabil - many spearheaded by independent with a general climate of intolerance for ity over the past three years and so- unions and syndicates, have been a con - any kind of public protest. Several lead - called liberals—the secular left— sistent feature of the past three years, as ers of striking postal workers were increasingly disillusioned and divided, labor activists have become an enduring recently dragged by police from their the labor movement has proved to have headache for Egypt’s ever-changing homes in the middle of the night. serious stamina and political power— leadership. When the interim cabinet “It's quite possible that a law outlaw - and relatively clear demands—fair resigned in late February, its failure was ing or severely restricting independent wages and decent working conditions. largely attributed to fomer Prime unions would be adopted in the current Minister Hazem el Beblawi’s inability atmosphere,” said Joel Beinin, a profes - to quell ongoing labor unrest. Among sor of Middle East History at Stanford Window dressing the first things Ibrahim Mahlab did upon University who has studied the Egyptian Speaking at an AmCham-sponsored his appointment as the new prime min - Labor movement for over three decades, event in a ballroom of the five-star ister was pay a visit to workers in the via email. It’s because they pose the Intercontinental Cairo Semiramis Hotel, industrial town of Mahallah—where biggest threat for political opposition. Mohammed Wahaballah, General striking factory workers famously Egypt’s workers have a long tradition of Secretary of the Egyptian Trade Union walked off the job en masse in 2006 organizing. Federation, the state-sponsored union demanding higher wages and planting In March 2011, when the government founded in 1957, called independent the seeds for the January 25 revolution. changed the law to officially allow inde - labor unions a threat to the country’s sta - To date, their protests continue with no pendent unions, they mushroomed in a bility. “Those behind these independent compliance. number of fields, often two or three new unions want to divide the country,” he But it will likely take more than polit - unions emerging in the same industry, or declared. “Ask yourself, does this coun - ical gestures like visits from the prime sometimes, in the same factory. Egypt’s try really need strikes now?” minister to assuage Egypt’s workers. first independent union was actually Wahaballah argued, incorrectly, that the Labor actions have become common - approved in 2009, on the basis of a United States and Germany don’t allow

32 I Business Monthly – May 2014 In Depth

independent unions. (Both countries committed to protecting citizens’ rights authorities have shown a dwindling have well-established independent labor to associate and organize and prevent tolerance for organized protest, indepen - unions.) In fact, government-sponsored child and forced labor. But despite a dent labor activists say they are increas - unions are more common in former degree of awareness and a political cul - ingly under threat. Shokr says he’s Soviet countries, usually a holdover ture that has nominally favored the spoken with workers who have been from communist governments. In Egyptian worker, many still have salaries threatened with arrest at their workplace Egypt’s case, however, the ETUF was a simply for joining an independent tool by which Mubarak’s govern - movement. Last year, authorities broke ment attempted to show that it up a sit-in at an Alexandria cement was promoting the rights firm using police dogs and of workers. clubs. “They use dirty tactics,” says Shokr.

At the Abassiya Talal rally, repre - Shokr, sentatives an advisor from the Wafd, to one of the Dostour, and Free two main inde - Egyptians political pendent trade federa - parties publicly voiced tions that have grown in their support for Egypt’s the wake of the 2011, the workers and lauded their contribu - Egyptian Democratic Labor tions to the country’s “revolutions.” On Confederation, says government unions the sidelines, though, several political never looked out for the best interest of that aren’t ade quate to support a family, representatives were less enthusiastic the workers. “These people, they don’t work in unsafe or unhealthy conditions, about backing the independent unions, let them choose which union to join,” he and are sometimes fired without reason saying they were not officially aligned said. “It’s an offense to the intelligence or notice. That’s why Egypt needs inde - with the federation and that they had of the workers.” pendent unions, leaders say; and though been sent to the meeting in part to feel Egypt officially joined the the movement may be going through things out. “People tell us we should International Labor Organization in growing pains now, it will ultimately keep the stability,” says Fawzy of the 1936, signing on to an international emerge stronger and more effective. Democratic Egypt Party, referring to agreement by which it in theory But in the present climate, in which officials’ recent rhetoric admonishing

Business Monthly – May 2014 I 33 In Depth

workers to swallow their demands for the now, and operating,” he says. “There’s presidential candidate Abdul-Fattah el- sake of establishing a collective peace. no going back.” Sisi. ِ Diplomatically, he adds that the “But these same people—if a cup of tea is The stairwall and hallway leading to federation will have to wait and see late to their office, they will refuse to the group’s headquarters are covered whether the general’s platform address - work,” he says. with signs pointing visitors in the right es workers’ needs. He adds that the “No one said this would be easy,” says direction. These are temporary quarters, upcoming presidential elections will be Hanah Shukrallah, president of the says Shokr, explaining that the organiza - somewhat inconsequential for unions Dostour Party, adding that it’s important tion has faced challenges in trying to anyway. Parliamentary elections, on the that the movement not surrender the gains legally register itself and operate its other hand, will be important to orga - it’s made in the past few years because it finances—hence, the lack of a proper, nized labor’s agenda of trying to change has an important role to play in the coun - permanent office. several labor laws, including those try’s future. “The truth is any conversation Shokr and other proponents of inde - pertaining to the minimum wage and about justice in Egypt depends on work - pendent unions argue that the ETUF was allowing workers the right to strike. ers,” Fawzy agrees. “There will be no real a monolith that did little or nothing on A recent story on the front page of Al- stability until we solve unemployment.” behalf of workers. If laborers want to Shorouk independent newspaper report - That point seems to be lost on state obtain better pay and improved condi - ed that a coalition of independent trade union officials like Wahaballah, whose tions, they say, they need an unbiased, unions had endorsed Sisi, including address to business owners focused more committed workers unions behind them. Shokr’s Egypt Democratic Labor or less solely on how new draft labor laws Still, others have questioned whether Confederation. “This is completely would affect their bottom lines. “If we Egypt’s independent labor movement, untrue,” he says. Though perhaps it says have more than one union operating in a splintered and chaotic as it currently is, something about the current political cli - factory, and there’s a problem, how does can be effective in lobbying on behalf of mate in which the unions are operating. the business owner know with whom he workers. Wael Tawfiq, 39, like many Egyptian should negotiate?” he asked. Even Shokr doesn’t want the govern - journalists, has at times worked two, Shokr, the independent labor union ment’s federation abolished. “The work - sometimes three jobs. Currently, he advisor, says it’s fairly predictable that er should be able to choose,” he says. writes about economic and labor issues defenders of the old status quo, like Malek Bayoumi, secretary general of for a site called hoqooq.com, but he Wahaballah, are worried for their own the Independent Trade Union views labor activism as his primary call - future as independent unions gain trac - Federation, agrees that “it’s become a ing. He is the secretary general of an tion. “He’s just looking after his own sort of brand-name.” He explains, independent union for online journalists, interests,” he says. Beinin agrees, saying “There will always be people who the Independent Electronic Journalists’ that it’s opposition to independent labor choose it.” Syndicate. “When the revolution hap - unions is nothing new from the govern - Bayoumi, a former airline pilot who pened, I discovered my role,” he says. “I ment union reps. “ETUF wants to has a daughter attending the American see working in an independent union as maintain its monopoly,” he writes. University in Cairo, looks like he’d be my way to completely realize the more comfortable landing a 747 or demands of the revolution.” strolling through an airport than march - He echoes the view that independent Divided we fall ing in a strike. Switching back and forth unions in Egypt are here to stay, whether Just off Tahrir Square, Shokr sits in a between Arabic, English and French, the government likes it or not. But he bare-bones meeting room of the Egypt Bayoumi explains how his work in the cautions that Egyptians need to be care - Democratic Labor Confederation, one pilot’s union got him into workers’ poli - ful about buying into the allure of “sta - of two umbrella groups for independent tics. He eventually decided to take on bility” as it’s currently being marketed unions. A veteran labor leader and vice the role of head Independent Trade by the country’s leaders. “The real sta - president of the pensioners’ union, he Union Federation, which he says cur - bility isn’t the one they speak about,” he has graying hair and a soft-spoken but rently represents some 2 million says recently, sitting in a downtown cof - firm demeanor. He dismisses the employees. fee shop in between pulls on a shisha rhetoric of state union proponents like Given their growing influence among pipe. “The real stability is when people Wahaballah who seek to demonize the Egypt’s 23 million workers, indepen - aren’t afraid that they won’t have any - movement. The rise of independent dent unions clearly wield political influ - thing to eat, because they receive a just labor unions in Egypt is inevitable, he ence, but it’s important that they avoid wage.” says, whether the old guard likes it or getting wrapped up in politics, explains He acknowledges that the current not. He says the Egypt Democratic Bayoumi as he puffs on an electronic union landscape is chaotic. With so Labor Confederation alone has more cigarette and sips tea. That’s a tall order, many unions, he says, there are bound to than 250,000 members already. given Egypt’s charged political environ - be some in which corruption and other “Independent unions are on the ground ment and the widespread support for questionable practices take place. But

34 I Business Monthly – May 2014 In Depth

even the messy, fractious independent he says. “The laws have to respect this.” will be neither the money to address the labor scene is far superior to the former Beinin, however, says that indepen - issues or the political savvy about how alternative, he says, in which workers dent unions or not, little is likely to to do it. What will happen in those cir - had one choice that wasn’t really a change for the majority of Egyptian cumstances is anybody's guess. choice at all. Besides, he believes that workers until fundamental structural Whether or not independent unions are the movement will mature. He says his legal as such, the people involved in union alone has helped dozens of jour - them will remain in the workplace or nalists who were fired without on its margins.” cause to get their jobs back But independent labor or receive compensa - leaders like Shokr and tion from their for - Bayoumi say the mer employers. bottom line is that until

The fact that workers’ basic independent unions demands for fair pay are mostly populated by and decent working con - the youth also gives him ditions have been met, any hope. He says, “This younger gener - administration should fear the wrath ation has an optimism that the previous of organized labor. It’s entirely possi - generation didn’t.” changes are made that create growth— ble, Bayoumi says, that if the next gov - The most important thing, he says, for and jobs—and enable the government ernment doesn’t make headway on progress on these fronts, is that each to provide a decent level of social ser - these issues, Egypt could fall back into employee and laborer has the right to vices for working Egyptians. Until persistent unrest, perhaps even experi - choose which union he wants represent - then, he writes: “Wages will continue ence another revolution. “We are more ing him, which will ultimately weed out to be inadequate to cover basic living than any other Arab country, with our those that are ineffective or corrupt. needs for most workers. The education - workers,” he says. “I hear the same Shokr agrees. “That’s the issue. We have al and medical systems will continue to demands right now that I’ve alway■s the right to choose how we organize,” be in catastrophic state because there heard— salaries and health issues.”

Business Monthly – May 2014 I 35 Entrepreneurship

THE NEXT STEP Breaking barriers to scale for MENA’s entrepreneurs Published by the Wamda Research Lab Analysis by Mat Wolf

s the economic fallout of Egypt’s 2011 many as in 2000. But the report also found that four major bar - uprising drags on, despite large injections riers posed persistent challenges to small business growth. of Gulf aid following the political tumult in They include generating sufficient revenue, securing invest - the summer 2013, Egypt’s unemployment ment, finding qualified employees and expanding into new problem continues to fester. The official markets. These hurdles, the authors say, are the real impedi - unemployment rate hovers at a perilous ments to job creation in the region. 13.4 percent, and officials and experts put the country’s youth “Entrepreneurship is a powerful tool for creating economic unemployment rate at more than 25 percent. opportunities, generating wealth, expanding markets and Increased entrepreneurship and the growth of small and empowering citizens,” write the authors, adding that in devel - oped countries, small and medium-sized enterprises produce medium-sized enterprises may hold the solution for the coun - 60 to 70 percent of jobs. However, in MENA, they only make try’s grim economic outlook, but according to a March report up an average of 30 percent of private sector employment and Aissued by the regional Wamda Research Lab of the Wamda 4 to 16 percent of total employment. entrepreneurship platform and investment fund, the MENA “We found that there are many young, promising entrepre - region faces obstacles on this front. According to the report, neurs in the region whose companies have grown over the past the region lacks growth-minded entrepreneurs, and those it 4 to 5 years,” the report’s authors’ write. Eighty percent of the has are beset by a host of challenges. startups that experienced revenue growth in the past three “Our region is full of aspiring entrepreneurs who can years had added jobs since 2009 and roughly 20 percent had become agents of job creation; however, they still encounter an annual employment growth rate of 20 percent or more. many barriers when growing their startups,” writes Wamda Particularly troubling for Egypt is that despite having the Chairman Fadi Ghandour in the report’s foreword. “So if we region’s largest population and consumer base, regional entre - want to get serious about our unemployment problem, we preneurs didn’t see the country as an especially desirable loca - must focus our efforts on understanding the nature and source tion for future expansion. Seventy-two percent of polled entre - of these obstacles and work hard for their elimination.” preneurs say they hope to expand to other countries in the next Titled “The Next Step,” the authors claim that the report is two years, but only 13 percent say they would like to come to the result of the most comprehensive MENA study on entre - Egypt. This places the country on the same level as much preneurship ever conducted, with 937 entrepreneurs and smaller markets like Jordan, Kuwait and Lebanon. experts interviewed, including case studies from Egypt, Unsurprisingly, the wealthier, more stable Gulf countries were Tunisia and Lebanon. The good news, according to the report, the most desired expansion areas, with 39 percent saying is that there are now close to 200 institutions actively support - they’d like to expand to the UAE, 38 percent to Saudi Arabia ing entrepreneurs in the MENA region, at least seven times as and 29 percent to Qatar.

42 I Business Monthly – May 2014 Entrepreneurship

Part of their reluctance to expand in Egypt stems from the coun - Forty-percent of experts polled agree that the supply of venture try’s workforce issues – Egyptian university graduates are often funding was a regional challenge and 31 percent of respondents perceived as under-qualified due to an education system that does - say the lack of understanding from entrepreneurs on what n’t give them job skills. One of the report’s Egyptian case studies investors are looking for is a major challenge in and of itself. features the search engine startup Kngine. When CEO Haytham Thirty percent of the report’s experts polled on the matter say El Fadeel began hiring, he was disappointed that applicants often another problem is the basic inability of entrepreneurs to lacked not only the needed technical skills, but also “soft skills” effectively pitch their ideas and business models. like creativity, drive and the ability to learn quickly. As a result, “A limited supply of funding is the top challenge for obtaining according to the report, Fadeel investment, while communication gaps had to create his own “rigorous” "Our region is full of aspiring persist between entrepreneurs and training and education program entrepreneurs who can become experts,” the report’s authors write. that all new hires have to pass. “Better training and awareness on Titled “Kngine University,” the agents of job creation; however, they behalf of both startups and potential program has hopefuls study a still encounter many barriers when investors could overcome these short - dozen software engineering and growing their startups." comings.” artificial intelligence courses If these initial problems with talent, available publicly from marketing and investment are sur - Stanford, MIT and UC Berkeley, among others, at Kngine’s mounted, entrepreneurs then face impediments to moving into offices. After four to six months, applicants take exams on the top - new markets, which according to around half of respondents, is ics. If they pass, they begin their employment with Kngine. compounded by difficulties in finding local partners. Startup costs “Kngine University has worked very well,” Fadeel is quoted as also play a role, according to over a third of those surveyed. saying in the report. “It’s much, much, much better than hiring the “Follow-up interviews and survey data suggest that challenges normal way.” to regional expansion in the MENA region are multi-faceted, con - Workforce issues are tied into nearly every facet of difficulties sisting of barriers to both dealing with regulations and identifying facing entrepreneurs and small and medium enterprises, according partners,” write the report’s authors. “Both experts and entrepre - to the report’s authors. The problem of revenue generation, which neurs pointed to the legal and financial hurdles of entering new was listed as the largest inhibitor of business growth, according to markets as challenges to expanding geographically.” survey respondents, could be partially solved, the authors say, if Without local partners, the report suggests, entrepreneurs marketing talent and education could be improved. This would face difficulties developing credibility in untested markets and potentially benefit not only the businesses themselves, but also often remain ignorant of “relevant players in the local private create a wealthier, smarter consumer. sector, suggesting that the obstacles to entering new markets “Entrepreneurs’ biggest challenge when generating revenue is are not purely regulatory.” marketing products and/or services (41 percent),” write the The report ends by acknowledging that economic and social report’s authors, “followed by finding customers (28 percent) prosperity in the MENA region depends heavily on wide - and collecting payments on goods or services sold (27 percent).” spread and sustainable job creation and that entrepreneurs are They suggest the solution to this problem would be to “improve critical to these efforts. But region-wide, in order for them to marketing talent while also creating initiatives that target market contribute to the economies of countries, they must be able to access and market education for both entrepreneurs and grow their businesses and recruit the proper talent. Increasing consumers.” access to capital is also imperative, writes Wamda, in addition When identifying the obstacles to hiring and team building, both to improving education systems and increasing access to entrepreneurs and experts in the the report cite not only external entrepreneurship training. A reduction in legal challenges and challenges with finding talent, but also pointed to internal difficul - costs will also facilitate enterprise expansion, but this must be ties in creating the proper incentives for retaining employees. The combined with initiatives to support entrepreneurs in identify - report’s authors say overcoming these hurdles will require coordi - ing strategic partners to help them enter new markets. There is nation between funds, incubators, NGOs, mentors, angel no quick fix for these problems, the authors write, but these investors, universities, government programs, entrepreneurs and priority areas are a starting point for addressing some of the their teams as expertise must be pooled to create long term, challenges detailed in the report. “holistic” solutions. “The Middle East is ready for innovation and disruption and Thirty-six percent of entrepreneurs say that the supply of ven - our entrepreneurs must be leading the change,” Ghandour writes. ture funding in their countries is limited and 24 percent say “We have a long road ahead of us replete with hurdles that could investors don’t offer enough value beyond cash. Eighteen percent be turned into opportunities if we pool our knowl■edge and also say investors are too afraid of the risks inherent in startups. contribute to our region’s developmental strategies.”

Business Monthly – May 2014 I 43 Dining Out

D R A T S U M

A D N A M A DISCOVERING A CLASSIC BY MAT WOLF

he Zamalek restaurant local fare, they need look no further than medieval, and upon entering, customers scene can often feel dom - Abou El Sid located on 157 26 July Street. are seated at one of Abou El Sid’s twenty inated by internationally Founded in 1994, Assistant Manager or so cozy booths and tables done up in inspired, trendy and over - Wagdi Wadei says Abou El Sid has proven classic—some might say tacky—Louis priced eateries. Their popular with locals for its large portions Farouk style furniture. Umm Kulthum-era quality ranges, and some and family-style Egyptian comfort food. big band music plays on the speakers, and have more staying power than others. Classics like stuffed pigeon and fattah sea-green stucco and brick walls are Closures and openings are frequent and it dominate the menu, and Abou El Sid’s adorned with antique woodblock pictures can be difficult to find a classic Egyptian ambiance and décor evoke an older, pre- of dervishes and men in fezzes. Multiple fixture on the island amid the sea of sushi neon setting. The local high-end chain also large wooden crests bearing the three-star, and hamburgers. But for those who think has branches in Maadi, Nasr City, Sun City crescent seal of pre-Nasser Egypt also dot Tthe last thing the neighborhood needs is Mall and Dandy Mall. The front entrance every wall, bathed in warm, but dim another Asian fusion joint, and who instead of the Zamalek location is a windowless, orange lighting. In some establishments prefer to dine on quality, well-prepared large green door that looks downright I’d fear this light would be used to mask

44 I Business Monthly – May 2014 Dining Out

uncleanliness, but the tables, even upon inspection with a cell phone light, are clean. When we first arrived, my three room - mates and I were asked if we had a reser - vation, which seemed unnecessary for 7:30 p.m. on a Saturday, but by around 9:30 p.m., the place was packed. Egyptian families, businessmen and groups of friends looking for some down-home favorites or just to sip on tea and smoke shisha fill up the restaurant’s booths. I realize it might be a good idea to phone

ahead if coming with a group. Abou El

D

Sid, however, also has a largely empty bar R

A

T S

hugging the back wall that should be U

M

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available for last-minute diners. D

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A M

To start the meal, my roommates and I A picked four items from Abou El Sid’s extensive list of traditional Egyptian The shrimp tajine proved to be my per - For libations, Abou El Sid offers a mezzes and appetizers. We first chose the sonal favorite. It contained spicy, well wine list ranging from Omar Khayyam namesake Abou El Sid salad (LE 18), fol - seasoned rice and shrimp in a tomato red to Omar Khayyam white, but this is lowed by stuffed grape leaves (LE 28), sauce, and was served in a brown clay pot. certainly better than no wine list at all. and a fried eggplant and vinegar salad Coming in second for me was the Local beer is also available. My flat - (LE 16). The service at Abou El Sid isn’t Egyptian-style moussaka, a stew of sea - mates and I, however, chose soft spectacular. The wait staff is friendly and soned eggplant, also in a clay pot. The drinks, water, the aforementioned for - polite, but a little absentminded. The two spinach and veal was good as well, but gotten tea and mint lemonades. The salads came out promptly accompanied not great. The meat was flavorful and beverages were all a little expensive, by balady bread, but the grape leaves mostly tender, but also a bit grisly in parts. with sodas that would go for LE 3 at a were MIA, and didn’t arrive until the As for the Circassian chicken, I was street kiosk running LE 12, and mint entrées appeared. I also thrice ordered a told in a chat after the meal with Wadei lemonades going for LE 18. Shisha is cup of tea for my meal that had yet to that this is actually somewhat of a house also available, and there isn’t an obvi - materialize by the evening’s conclusion. specialty and one of the most popular ous no-smoking section. The Abou El Sid salad is essentially a items on the menu. But, I myself wasn’t We were too stuffed for a dessert of spicy, pepper-spiked baba ghanough, but terribly impressed by it. The dish con - pudding (LE 22) or feteer (LE 27), but no complaints there, as it was delicious. I sists of a mound of rice topped with did go for after-meal teas and coffees. It was more partial to the fried eggplant brown gravy, slices of tender chicken was a good finish to a good night, and salad, however. The sliced rounds of baby and crunchy walnuts. It wasn’t bad, but I’m happy I found Abou El Sid. Prices eggplant are served crisp on a bed of to me, it was a little bland, especially may be steeper than at most Egyptian tomatoes and greens, and complemented compared with the other items we restaurants, but the food is well seasoned, by a drizzle of spicy vinaigrette. Scooped ordered, which I found delightfully sea - spicy, and served in large portions. They up with triangles of the crisp balady soned and spicy compared with other also offer breakfast and are open starting bread, they were a great way to start the Egyptian restaurants. To my taste buds, it at 7 a.m. if one perhaps needed to recov - evening. just came across as a glorified Midwest er from a weekend Zamalek bar crawl or For entrées, we chose four dishes: The American chicken casserole. My room - party. The service could use some tweak - Circassian chicken with walnuts (LE 62), mates, however, insisted I was crazy, two ing, but Abou El Sid may have just the spinach and veal tajine (LE 65), a claiming it was their favorite dish of the become my go-to■ Cairo restaurant for shrimp tajine (LE 75) and an eggplant and night. The entrée might leave an apart - Egyptian cuisine. mincemeat moussaka (LE 48). They all ment divided, but is definitely worth try - arrived about 20 minutes after the appe - ing. The grape leaves, though late, were tizers with the grape leaves in tow. Lazy also outstanding, served warm with a Abou El Sid Susan wheels are built into most of the mint, cucumber and yogurt dip. One of 157 26th July Street tables, making it easy for groups to share my roommates said she thought this was Zamalek items, and everyone sampled each other's the best iteration of the Middle-Eastern 0227359640 dish. classic she had ever had. 7 a.m. to 2 a.m.

Business Monthly – May 2014 I 45 Swedish furniture HOUSE BEAUTIFUL BY RACHEL SCHEIER S N O F L A

D E R F L A

n the 20 years since I graduated from college, I have moved At 2 p.m. on a recent Friday, the parking garage was already near - no fewer than 15 times, thanks to changing circumstances of ly full. Passing through the metal detector—which lately has work, romance and money. I am therefore intimately famil - become a universal welcome feature of any shopping experience iar with IKEA. In order to satisfy my need for bookshelves in the Egyptian capital—we joined the weekend horde: fresh- and bathmats to fill whatever latest living quarters in which I hap - faced brides-to-be, screaming children, mothers in abayas with pen to find myself, I’ve swiped my credit card at IKEA stores in weary-looking husbands in tow. You can’t just drop into IKEA and IElizabeth, New Jersey and Rome, Italy. I’ve awakened in the pick up, say, a shower curtain. The store is laid out like some kind morning on my SULTAN HURVA mattress, drunk coffee from a of funhouse of domestic comfort that’s been carefully designed to FÄRGRIK mug and gotten dressed in clothing from a HEMNES make you buy as much as possible. Once inside, you won’t find dresser (the Swedish company uses the same scandinavian-based your way out without viewing 25 things you didn’t know you naming system in all of its stores). None of these items were des - needed until that very moment, from throw pillows to salad spin - tined to become family heirlooms, but they did the job. Best of all, ners. In order to get to the Beds & Mattresses section, for exam - nothing was so expensive or unique that I couldn’t bear to part ple, you must first follow the Main Aisle, a grey path with lighted with it when it came time to leave. arrows, through other sections such as Sofas & Armchairs, This is why it’s largely thanks to itinerant 21st century profes - Kitchens, Outdoor Furniture, Workspaces and Children’s Rooms. sionals such as myself that IKEA made a record $4.5 billion last An architecture professor at University College London who con - year amid the aftermath of a global economic downturn. The ducted a study on IKEA’s labyrinth likened it to the vast Bazaar of genius of its “Scandinavian modern” end tables and sofas is that Isfahan, a 17th century Persian marketplace. they sell just as easily in Budapest as in Beijing, thereby achiev - IKEA stores always begin in Living Rooms. Here we encoun - ing the global economies of scale necessary to keep prices low. tered IKEA classics like the EKTORP (LE 3,595), the very same Last November, Egypt became one of the 43 countries in which sofa that once graced a Manhattan apartment of mine about a IKEA aims to “help more people live a better life at home,” with decade ago, which now comes with a few updates, including an the opening of a 33,000 square meter store that’s the anchor of the optional chaise longue and slipcovers in every imaginable fabric new Festival City Mall in New Cairo. and color, from denim to floral. Another product so ubiquitous that As you approach from the roadway—like most IKEA stores a blogger once described it as “the bookshelf everyone in every around the world, the New Cairo store can only be reached by city with an IKEA is required to have in their apartments, because car—IKEA rises out of the desert like a big blue and yellow oasis. we are all pitiful sheep,” is the BILLY bookcase (LE 545), which,

46 I Business Monthly – May 2014 Swedish furniture

You might be shopping for a MARKUS swivel chair (LE 2,475) for your home office and notice a big bin of KOPPLA extension cords (LE 19). And what modern housewife could not use a 17- piece set of PRUTA tupperware in assorted sizes (LE 49)? I noticed during my afternoon at the New Cairo IKEA (I have never managed to spend less than two hours at an IKEA) that there were certain items that kept popping up for sale everywhere. Some of these were practical, like the BASTIS lint roller (LE

S 9), giant bins of which were all over the N O F

L place alongside the blue and yellow tar - A

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E paulin shopping bags that are in every R F L

A department. Others were less so, like the SAMSPELT, a 16-centimeter, bright along with the LACK side table (LE 75) are some of IKEA’s most green “decorative” reindeer that I saw so many times that I final - iconic products. If you’re thinking, “Why would I want to buy a ly picked it up out of sheer curiosity. At LE 265 a pop, it’s hard for table that’s owned by approximately 7 million other people?” me to believe that the SAMSPELT is a top seller, but then again, Worry not. IKEA can help you make your home interior unique I don’t own the world’s largest furniture retailer. with accessories to fit any aesthetic, offering decor themes rang - IKEA’s thrifty, DIY ethos—which extends from the self-service ing from classic contemporary (a REKTANGEL vase, LE 375, warehouse and assembly of furniture to the cafeteria-style restau - filled with assorted artificial herbs, LE 75) to post-modern (a rant, where patrons are asked to clean up after themselves by white MASKROS pendant lamp that looks like a giant snowflake, bussing their own trays and wiping down their own tables—cer - LE 545). There’s even IKEA “art”—the PREMIÄR ready-to- tainly represents a departure from the norm for most Egyptians, hang canvas I saw was called “Sunset Stillness” (LE 995), and though patrons of the Festival City IKEA seemed to be adapting. comes in assorted color schemes to add “mood and atmosphere” In the restaurant, a woman in a silk Dior headscarf had found a to your home while matching your carpeting. solution: she was busy enjoying her Swedish Meatballs (LE 27) The prettily furnished rooms you stroll through at IKEA feature while her nanny tended to the kids. You could argue that Egyptians actual clothes hanging in the closets and actual books on the book - were the creators of pleasantly-decorated interiors—after all, as shelves, as if you’re walking through a life-size dollhouse. In far back as several millennia ago, it was the ancient Egyptians Bathrooms, I found myself trying to wash my hands under the who filled the tombs of their dead with furniture and and priceless RUNSKÄR tap (LE 495), using the MOGDEN soap dispenser knick-knacks in order to make them more comfortable in the after - (LE 85). (Apparently, I’m not the only one—the toilet bowls have life. In that sense, it seems a tad ironic that Egypt is now embrac - plastic guards with warning signs to discourage overeager cus - ing IKEA, the company that more or less invented disposable fur - tomers from giving them a try). niture. Of course, a hand-crafted gold trinket is much more likely One reason these “rooms” are such effective sales vehicles is to last into the hereafter than a SN■ARTIG bud vase (LE 4). But that they encourage what IKEA calls “unplanned purchasing.” who has the money, or the time? S S N N O O F F L L A A

D D E E R R F F L L A A

48 I Business Monthly – May 2014 Chamber news

BOARD OF GOVERNORS PRESIDENT MEMBERS OF THE BOARD Anis A. Aclimandos, Transcentury Associates Ahmed El Daly, Dale Carnegie Training Egypt (Westwood Group) EXECUTIVE VICE PRESIDENTS Amr Allam, Misr Sons Development - Hassan Allam Sons Curt Ferguson, Middle East & North Africa Business Nevine Loutfy, Abu Dhabi Islamic Bank Unit, The Coca-Cola Company Sherif Kamel, School of Business, The American Omar Mohanna, Suez Cement Group of Companies University in Cairo Thomas Maher, Apache Egypt Companies

VICE PRESIDENT, MEMBERSHIP PAST PRESIDENT Dalia Wahba, CID Consulting M. Gamal Moharam, MGM Financial & Banking Consultants COMMITTEE VICE PRESIDENT, PROGRAMS Amr Talaat, IBM CHIEF EXECUTIVE OFFICER CHAIRS VICE PRESIDENT, LEGAL AFFAIRS Hisham A. Fahmy (July 2013 to June 2014) Said Hanafi, Orascom Hotels & Development

TREASURER Sherif El Kilany, Allied Accountants-Ernst & Young International Cooperation Chair: Hanaa El Hilaly, Social Fund for Development ˚ Co-Chair: Magda Shahin, The American University in Cairo

Entrepreneurship and Innovation Investment & Capital Market Agriculture and Food Security Chair: Ahmed Bedeir, Dar El Shorouk Chair: Alaa El Affifi, Citadel Capital Chair: Tarek Tawfik, International Company for Agricultural Co-Chair: Nader Iskander, Egypt & Middle East Co. (EME) Co-Chair: Sherif A. El Akhdar, Beltone Private Equity Production & Processing Ç ÇÇ Co-Chairs: Tony Freiji, Wadi Holding Seif ElDin ElSadek, Agrocorp For Agriculture Investment Health & Pharmaceuticals Legal Affairs Chair: M. Maged El Menshawy, Manapharma Chair: Ahmed Abou Ali, Hassouna & Abou Ali Law Offices Co-Chairs: Ahmed Ezz El Din, Johnson & Johnson Medical Egypt G Co-Chairs: Emma El Meligi, Pepsi-Cola Egypt Banking and Finance Mohamed S. Roushdy, Amoun Pharmaceutical Co., SAE Girgis Sarwat Abd El Shahid, Sarwat A. Shahid Law Firm Chair: Hussein Abaza, Commercial International Bank (CIB) Co-Chair: Zeinab Hashim, National Bank of Egypt Marketing Chair: Hisham Ezz El Arab, Danone Egypt Human Resources Co-Chairs: Tamer Hamed, Procter & Gamble Egypt, Ltd. Chair: Somaya El Sherbini, Microsoft Egypt, LLC Corporate Social Responsibility (CSR) Tamer Elaraby, Nielsen Co-Chair: Maisa Galal, General Motors Egypt, SAE Chair: Mohamed El Kalla, Cairo for Investment & Development Co-Chair: Shereen Shaheen, Pepsi-Cola Egypt Real Estate Chair: Mohamed Abdallah, Coldwell Banker Affiliates of Middle East & Greater Africa . Industry & Trade Customs and Taxation Co-Chair: Hala Bassiouni, Egyptian Housing Finance Company. Co-chairs: Mostafa El Halwagy, The Egyptian Company for Chair: Hassan M. Hegazi, Master Trading, SAE International Touristic Projects (Americana) Co-Chairs: Hossam Nasr Transport & Logistics Omar El Derini, FAOM Consult/ Red Wing Sherin Noureldin, Moore Stephens Egypt Chair: Alfred Assil, Menarail Transport Consultants Suresh Narayanan, Nestle Egypt t Co-Chairs: Amr Kabil, National Stevedoring Group Amr Tantawy, DHL Express Education Information & Communications Technology Chair: Amr Ezzat Salama, The American University in Cairo Chair: Bassel Mubarak, Oracle Egypt Travel & Tourism Co-Chair: Elizabeth Khalifa, Binational Fulbright Commission in Co-Chair: Reem Asaad, Raya Holding Egypt Chair: Karim El Minabawy, Emeco Travel J Co-Chairs: Cesare Rouchdy, Four Seasons Hotels and Resorts, Egypt Roland Bunge, Carlson Wagonlit Travel Energy Insurance Chair: Khaled Abu Bakr, TAQA Arabia Women in Business Chair: Alaa El-Zoheiry, Arab Misr Insurance Group|gig Co-Chairs: Basil El Baz, Carbon Holdings Chair: Hala El Barkouky, Allied Business Consultants Co-Chair: Rabih Abdel Khalek, Pharaonic American Life Insurance Osama ElSaid, Masa Electro Co-Chairs: Ghada Hammouda, Citadel Capital Company (Metlife Alico) Thomas Thomason, Egyptian Refining Co. Jailan Shindy, Shindy & Associates, Inc.

American Chamber of Commerce in Egypt – Tel: (20-2) 3338-1050 – Fax: (20-2) 3338-1060 For more information about AmCham services and news, please visit www.amcham.org.eg or our US mirror site www.amcham-egypt.org Events

CUSTOMS AND TAXATION Finding the right balance

“The aim of the Egyptian Customs Authority is to provide the best possible services to facilitate trade while preventing smug - gling,” said Mohamed El-Salhawy, the Egyptian Customs Authority chairman at a May 1 event organized by the AmCham customs and taxation committee titled “Updates on the Latest Customs Procedures.” Finding the right balance between preventing smuggling and facilitating trade has become more crucial than ever during the past three-plus years of unrest, said El-Salhawy. Lax processes mean that imported goods move more quickly, ECA offices would help towards stopping smuggling, he which benefits economic growth, but it also means smuggling said. is easier. From 2012 until the first quarter of 2014 there have International agreements such as Free Trade Zones and been over 3000 smuggling cases whose estimated value is over Qualified Industrial Zones are important for facilitating trade, LE 2.5 billion. “These figures are huge,” he said. said Ahmed Hassanien, head of the ECA technical department. Automating processes, procedures and using state-of-the- “For the time being smuggling is quite high. And therefore art technology play a vital role in achieving that balance. regulations must be placed to stop it,” said El-Salhawy. He noted According to Medhat Khalefa, head of IT at the ECA that ECA has signed protocols with the Import-Export Alexandria office, the authority can now provide same-day Supervisory Authority, Ministry of Interior and Ports Authority approvals for shipments, where in the past it would have to create a one-stop inspection point for imported goods. “This taken two weeks, thanks to digitizing the delivery chain. solution will allow us to greatly reduce smuggling as well as Having a single database of transactions accessible by all make importers' life a lot easier,” he said.

LEGAL AFFAIRS Reforming the labor law

On April 6, the AmCham Legal Affairs Committee held a meet - ing to address “The Egyptian Labor Law under the New Constitution” with guest speaker Mohamed Wahaballah, Secretary-General of the government-sponsored Egyptian Trade Union Federation. At the outset of the meeting, Wahaballah described the federation as Egypt's largest entity, comprising 6 million workers, more than 30 union leaders, 24 general unions across all sectors, and more than 26 offices in all governorates. represented by the federation, strongly reject union pluralism, or He added that the Egyptian Labor Union is governed by Law the presence of independent unions in one field, which could No. 35 of 1976 and is monitored by the Central Auditing have a destabilizing effect on the work environment. He said the Authority. federation should collaborate with other government and “The Labor Law is considered the father of all laws in Egypt,” employers' associations to amend the law in a way that ensures explained Wahaballah as he spoke about the current Labor Law a balanced employer-employee relationship. Wahaballah also No. 12 of 2003, which he said was enacted following long-stand - praised the recent decree by the Ministry of Labor to re-establish ing conflicts between employers and employees. According to the legislative committee inside the ministry and entrust it with Wahaballah, the current law not only failed to maintain a balance drafting a new labor law. between employers' and employees' rights, but also disregarded Wahaballah also discussed what he saw as shortcomings of the the economic, social, and human development aspects of current law. He said it permits unfair dismissal, despite being the employment relationship. He also said that employees, outlawed by the constitution.

50 I Business Monthly – May 2014 REAL ESTATE Allowing Real Estate funds

“We listened to market experts in Egypt. They said having real estate funds is important. We saw it in other countries and found that it looks important,” said Sherif Samy, chairman of the Egyptian Financial Supervisory Authority, during a com - mittee meeting organized by the AmCham Real Estate Committee, titled Real Estate Investment Funds: The Beacon of Hope for Real Estate Stakeholders, held at Semiramis Intercontinental Hotel on April 13. The EFSA regulatory changes will allow, for the first time, the creation of sector-specific funds. The first of these to be approved is the real estate fund. It allows the fund manager to invest in land, commercial, residential or industrial properties, The new EFSA regulations for real estate funds strike a stocks of real estate firms, bonds of such firms or any other delicate balance between allowing the fund freedom to type of asset or financial instrument that is tied to real estate. invest as they deem suitable, while protecting shareholders One of the unique aspects of real estate funds in Egypt, accord - from irrational decisions, said Samy. “We would not be a ing to Samy, is the ability of the fund manager to finance a good regulator if we put limits on what fund managers could developer who was allocated a land plot via government auc - and could not do,” he said. What they have done is to impose tion but has run out of money to complete the project. strict transparency and disclosure regulations which give the “This is something that we have seen happen quite a lot. So investor a complete picture of how the fund is managing it needed to be included,” said Samy. their assets, explained Samy.

BANKING AND FINANCE FATCA briefing The Foreign Account Tax Compliance Act is a United States statute that requires U.S. entities, including expatriates, to report their financial accounts held outside of the United States, but it will also affect some businesses operating in Egypt. The Egyptian government is still negotiating how the statute will be implemented on Egyptian soil. But as it stands now, com - pliant foreign financial institutions (FFI) would be obliged to prove that that their customers are non-U.S. persons. Non-com - identified as being non-U.S. entities which handle the financial pliant FFI’s would be subject to a 30 percent FATCA withhold - assets of U.S. citizens. ing tax on payments with U.S. ties which are received or issued. “To properly comply with this new reporting agreement, an ElSherif Abdel-Razek, compliance and corporate governance FFI will have to enter into a special agreement with the IRS group head at The National Bank of Egypt and Safaa El Ashri, before June 30, 2014,” said Abdel-Razek. He added that area compliance officer at HSBC Bank Egypt briefed attendees “FATCA will divide the world into participating FFI’s and non- at a Banking and Finance Committee meeting on March 18. participating FFI’s.” Participating FFI’s must apply a number of They described FATCA as being enacted to primarily increase procedures as per the agreement, including identification and transparency and curb tax evasion by U.S. persons with offshore due diligence procedures. accounts. They said Egypt’s FFI’s are required to report directly The approaches for compliance with FATCA include inter - to the U.S. Internal Revenue Service (IRS) on data regarding governmental agreements, or the more complicated measure of overseas accounts held by both U.S. citizens and foreign entities entering an FFI Agreement directly with the IRS, with no force in which U.S. citizens hold substantial ownership. FFI’s are of law in the country of presence.

Business Monthly – May 2014 I 51 Events

HUMAN RESOURCES Resolving workplace conflict

Conflicts in the workplace are inevitable, but they can have positive outcomes. “In every conflict there are either two win - ners or two losers,” said President of Dale Carnegie Training for Egypt and the Gulf region, Ahmed El Daly at an AmCham Human Resources Committee Meeting on March 27. According to El Daly, both parties usually end up losing when the conflict is addressed inappropriately. Conflicts can be seen as opportunities for adjustments, he said, making it a shame that some managers avoid addressing conflicts alto - gether, despite the benefits they could reap through conflict El Daly noted that the sources of conflicts range from inter - resolution. personal differences to the lack of clear and efficient roles, The more a conflict escalates, and the longer it is left unset - policies and regulations. Varying reactions to conflicts include tled, the harder it becomes to resolve. Conflicts often follow a passiveness, assertiveness, and aggression, and they can be cyclical sequence, with an event initially taking place and addressed by planning for a resolution. El Daly added that being interpreted in a certain matter. The interpretation of the problems should be anticipated by leadership by identifying event triggers an emotional response followed by a physical the early signs. El Daly concluded that in the unfortunate response and ultimately a response in overall attitude which case that a conflict cannot be resolved, work terminations or then affects the culture of a workplace. transfers may be the only solution.

HUMAN RESOURCES Embracing Millennials

“Millennials are our current employees, they are our future lead - ers, and they are our current and future customers. By 2025, they will become 75 percent of the global workforce,” said Hoda Mahmoud, global talent development leader for Africa and the Middle East at General Motors. At the March 20 Human Resources Committee Meeting, Mahmoud defined Millennials as those who were born between 1980 – 2000; they are those who dominate the current workforce and will determine the future course of many businesses. General Motors had a 13 per - cent attrition rate in 2013, she said, and 63 percent of those who left between 2010-2013 were millennials. As a result, the com - their managers, are eager to take on bigger responsibilities, and pany has looked into how it can retain more young people. lead blended lives. During work hours, this tech-savvy genera - “Millennials are a generation that studied in the most uncon - tion will work browse facebook while after-work hours they will ventional ways and places,” said Mahmoud. continue to check e-mails. Managers who understand all of this In the workplace, the younger generation has been wrongly are essential to this generation’s success. described as being overly ambitious, solely concerned with Executive Director of the American University in Cairo’s income, disloyal, disrespectful of authority, lacking time man - Career Center, Maha Guindi, said that employers want people agement skills, and lazy. On the contrary, Mahmoud said mil - who “have the willingness to learn, can look at information, ana - lennials value meaningful and challenging development oppor - lyze it, think critically about it, come up with solutions.” tunities. They are more concerned with working in a supportive She said universities and employers must step up and play a environment and being paid justly. They are outspoken, value bigger role in training students in these soft skills.

52 I Business Monthly – May 2014 INSURANCE Tackling political violence According to a recent paper released by the United Nations, there have been 55,000 deaths on average per year as a result of political violence around the world for the last 30 years. "This translates into 153 deaths a day," explained Tariq Al- Salihi, head of the war and terrorism division at the Advent Syndicate at Lloyds and director of business development at Fairfax International. Al-Salihi was speaking at an AmCham Insurance Committee Meeting held on March 25. Al-Salihi pointed out that insurance companies like to invest in the MENA region because of the anticipated annual ists and the escalation of violence in the streets, including the growth rates of 3-4.6 percent. The unrest and uncertainty in use of improvised explosive devices (IEDs), there remain seri - the past few years have also spurred demand for insurance. ous threats to prosperity in Egypt. Yet, despite the continued Based on data from the IMF, Egypt is among the countries that security issues, Egypt remains economically on a strong consistently demonstrated that there are incentives to buying growth curve. It is still an attractive investment option for insurance products to mitigate investment risks. Al-Salihi said some, with a 3.4 percent growth rate predicted for this fiscal evidence shows that political discontent and instability remain year and the Gulf States' pledge to invest $12 billion. the long-term outlook for the region. Speaking about the role of insurance, Al-Salihi said that it A London-based information service provider ranked Egypt primarily provides a solution to mitigate the risks business among the world’s most high-risk countries. From power owners and companies might face. “The high-risk high- struggles in the government to threats by Sinai-based extrem - reward strategy is one that we adhere to,” he said.

MARKETING Pursuing the impossible

“How many of you had a dream that seemed unattainable? And how many of you reached that dream and then stopped,” said Omar Samra, the first Egyptian to climb Mount Everest, the tallest mountain in the world, as well as the seven tallest summits in the world, during an AmCham Marketing Committee event held at the Four Seasons at Nile Plaza hotel on April 16 titled “The Pursuit of Dare.” Samra is also the president and CEO of the MENA region adventure travel agency, Wild Guanabana. Samra's life once had a different course. After university, he zero margin for error,” said Samra. At one point, Samra’s team pursued an MBA and worked as an investment banker. Five stumbled upon the body of a mountaineer who had been an hour years ago, he left all that behind. ahead of them. “You need to train your psyche as well as body His passion for climbing seemingly insurmountable obstacles to not panic,” said Samra. started when he was 16 years old and in Switzerland. “There was After realizing his dream, Samy said he “felt hollow.” So he a tremendous sense of satisfaction that I challenged my weak - decided to conquer a new challenge – climbing the highest sum - ness and climbed that small mountain. And, naive as I was, I mits in the world, known as “The Seven Summits,” which he thought if I could climb that small mountain, I could climb completed in June 2013. Next, he hopes to be the first Egyptian Everest.” in space, followed by a skiing trip to both the South and North Almost 12 years later in May 2007, Samra was standing at the Poles to complete what is known as “The Adventure Grand Everest Summit some 9000 meters above sea level. The climb Slam.” "I believe that the passion to push boundaries is the took over two months. The harsh conditions mean “here there is single most important catalyst for human evolution,” said Samra.

Business Monthly – May 2014 I 53 Events

MARKETING Capturing the middle class “Our vision is to delight our consumers with tasty and healthy food and beverage solutions by bringing their needs and aspi - rations to the heart of the strategies. We have been in Egypt for over 100 years and are proud of our achievement,” said Suresh Narayanan, Chairman and CEO, Nestlé Egypt, speaking at the AmCham Marketing Committee meeting on March 5. In his presentation, Narayanan showed pictures of the first Nestlé products that appeared on the Egyptian market in the early 1900’s. He said Nestlé tries to understand consumer con - cerns that are both local and global. Corporations should see opportunities in the diversity of the general population, instead of targeting a small fraction of the population, he said. Emerging consumers, those who have just reached a higher He said Nielsen is trying new approaches to understand the standard of living, are the new cash cows in terms of purchas - mindset of middle class consumers. In an attempt to define ing power, according to Narayanan. what “middle class” means, Nielsen conducted a custom James Russo, senior vice president of Global Consumer research study across 58 developed and developing countries. Insights at the global information company Nielsen said that At first, researchers tried to base the determination on income, the size of the “global middle class” will increase from 1.8 bil - but Nielsen quickly realized this technique was flawed— lion in 2009 to 3.2 billion by 2020, reaching 4.9 billion by instead developing a metric of “shopping basics,” “living 2030. The bulk of this growth will come from Asia, he said. comfortably,” and “spending.”

TOURISM AND TRAVEL Growing online tourism

“As of last year, 58 percent of all travel was not just researched and found online, but booked, bought and sold in a completely online environment,” said Damian Cook, digi - tal tourism marketing advisor at Chemonics International, at a meeting hosted by the AmCham Travel and Tourism Committee on April 14. Cook said 96 percent of travelers start their research online. These changes of course, have meant serious losses for traditional travel agency service companies. Yet opportunities remain . Travel services have evolved from high-street and brochure- driven bookings and reservations to online bookings. The role of social media in this regard is essential to marketing a travel des - Cook noted that customization is a key factor in the success tination or hotel. Through sharing referrals and successful expe - of the internet and online travel sector. He stressed that the per - riences on twitter, Facebook, and Instagram, potential travelers formance of a country’s tourism sector should not be assessed witness others’ travel experiences. Cook said that family and by the number but rather the value of travelers. Future travel - friends as well as honest reviews by fellow travelers are the most ers are expected to travel less and expect much more from the trusted source of information for potential travelers, with many vacations they do take. To promote tourism, venues should checking reviews online before booking. He said there has been offer free access to wifi connections; this would allow a 75 percent decline in direct visits to travel websites, with more travelers to share their experiences online, thus providing free people arriving there through social media. marketing.

54 I Business Monthly – May 2014 HILTON INTERNATIONAL

Hilton International hotels in Egypt celebrated Earth Hour 2014 for the fourth year in a row by switching off and dimming non-essential lights, including exte - rior signage. They also organized orientation sessions for their guests and the local community, highlighting the importance of energy conservation and how it can be achieved. The hotels’ environmental activity is one of the four pillars of the Hilton Worldwide is global corporate responsibility strategy.

SUEZ CANAL CONTAINER TERMINAL

As part of its commitment to the Port Said community, Suez Canal Container Terminal organized a celebration to mark Orphan’s Day. This full-day event saw staff members from SCCT organize and participate in activities such as puppet shows and face painting with children from the city's orphanages. This is the second year SCCT organizes such an event as part of its corporate social responsibility strategy.

PHILIPS

The global leader in light solutions has taken on the task of doing a lighting makeover for one of Cairo's most famous landmarks, the Baron Palace, locat - ed in Heliopolis. Philips plans to use the latest lighting technology, LEDs, which are 80 percent more efficient than traditional bulbs and have a lifetime of 50,000 hours. The project is part of the company’s Cairo to Cape Town road show, organized annually for the past five years.

SCHNEIDER ELECTRIC

Schneider Electric Egypt has been awarded the ISO 50001 certificate for its Badr City factory for efficient power management. The certification was awarded by Bureau Veritas, an internationally recognized auditor and provider of ISO certification. This is the first time a factory in the MENA region has received the certification after only five years in operation. The factory currently exports to Africa and Middle East.

Business Monthly – May 2014 I 55 Member News Condolences On behalf of the members, board of governors and staff of AmCham Egypt, we extend our deepest condolences to the family and friends of Hoda Serageldine The Managing Director of Egyptian Food Industries (Interfoods Egypt) and an active member of the Chamber since 2010.

Serageldine was a founding partner and manager of the Arab Office for the Protection of Industrial Property in 1983, and helped found the Egyptian branch of AIPPI in 1991. She served as its president from 1995 to 2014. She will be missed by the AmCham community.

New replacements in member companies: Changes in company details:

Ahmed Sameh Category: Affiliate Edison International - Egypt Branch Sector: Real Estate Sales Director, ABRAJ Misr Address: Block No. 17, Sector 1, 5th Settlement (Beside Down Town Jan-Kees Nieman Category: General Mall), New Cairo Sector: Food & Managing Director , Al Ahram Beverages Co., SAE Beverages Phone: (20-2) 2322-2400 • Fax: 23222444

Ahmed Samir Singer Category: Affiliate WorleyParsons Engineers Egypt, Ltd. Vice President, PCD Manager, Board Member Sector: Address: Level 3, Plot 69, 90th St., 1st Sector, 5th Settlement, New ECG Engineering Consultants Group, SA Construction/Engineering Cairo • Phone: 01281519992 • Fax: 01200490561 Hussein El-Gueretly Category: Public & Diplomatic Environmental Solutions CEO, Information Technology Industry Sector: Diplomatic Missions, Address: Block Villa 267, off 90th Street, New Cairo, 5th Settlement, Development Agency (ITIDA) Public and Non-Governmental New Cairo Organizations Anup Dutt Category: Affiliate Al Ahly Real Estate Development Co. Plant Manager, L'Oreal Egypt LLC Sector: Address: Building 290, Second business district, Off the 90th Road, Pharmaceuticals/Medical/Health beside Schneider Electric, New Cairo Lindsey Wellons Category: Not-for-Profit Phone: 01022474774 • Fax: 01148266643 Deputy Chief of Party, Trade Facilitation Project Sector: Consultancy Du Pont Egypt Office Saverio Scerra Category: Affiliate Address: 133 Raya Offices, Banking area, off Street 90, 4th floor, Technical & Operations General Manager, United Sector: Petroleum New Cairo Gas Derivatives Company Change in titles

Social Fund for Development Category: Affiliate Mohamed El-Antably Category: Affiliate Sector: Diplomatic Missions, Sector: Financial Sector Hanaa El Hilaly Public and Non-Governmental Head of Corporate Animation & Marketing Acting Managing Director Organizations Tarek Mahmoud Mahfouz Category: Affiliate Sector: Financial Sector Cargill Trading Egypt Category: Affiliate Head of Retail Animation & Marketing Sector: Agriculture Brendon De Boer Ernst & Young Egypt Category: Affiliate Commercial General Manager Medhat Afifi Sector: Accounting Category: Affiliate Ehab Takla Sector: Agriculture Business Development Leader Category: General Regional Financial Controller Al Madina for Advanced Technology Sector: Mohamed Asser Category: Affiliate Hany Saad Hassan Paper/Printing/Publishing & Sector: Agriculture Egypt HR Lead General Manager - DigiPro Packaging

Qatar National Bank Al Ahli (QNB AA) Category: Affiliate For any change to contact information, please contact the Membership Sector: Financial Sector Tarek Fayed Services Department at the Chamber’s Office Chief Business Officer Tel: (20-2) 3338-1050, ext. 0016 – Fax: (20-2) 3338-1060 E-mail: [email protected]

56 I Business Monthly – May 2014 NESPRESSO NATIONAL BANK OF KUWAIT

The renowned coffee maker has launched its new Inissia machine As a testament to the strength of its presence in Egypt and commitment to with a simple, chic design and fun colors that turn your morning the domestic market, the National Bank of Kuwait has rebranded its local coffee ritual into a delightful and unique experience. Inissia features subsidiary NBK, changing the name to NBK-Egypt. “The rebranding the latest technology Nespresso has to offer. It is fast, taking only 25 under the group name will further support the bank’s operations in Egypt seconds to make your favorite brew. It also has pre-programmed benefiting from NBK’s leading position regionally,” said Isam Al Sager, buttons for easy selection of your favorite beverage. Inissia is the NBK Group CEO and NBK-Egypt Chairman. The bank has been in Egypt lightest machine Nespresso currently makes, at 2.4kg. It can hold up since 2007. It remains one of the safest banks worldwide with a credit rat - to 11 capsules and 0.7 liters of water. ing Aa3 by Moody's, AA- by Fitch and A+ by Standard and Poor's credit rating agencies.

IKEA EMIRATES NDB

Emirates NDB bank’s Egypt headquarters is opening in early April. The inaugu - The leading Swedish furniture manufacturer and retailer’s Cairo store is now ration was attended by Deputy Central Bank Governor Nidal Assar and Consul officially open. Located in the newly constructed Cairo Festival City in New Cairo, General of the United Arab Emirates Hamad Al Mansoori. “The opening of our the latest addition to IKEA's 345 stores worldwide is built on 32,000 square meters Head Office in Cairo is a true testament to Emirates NBD’s regional strength and and is designed to hold up to 7500 IKEA household products, each of which is is evidence of the Group’s keen interest in contributing to the Egyptian economy,” designed to be easy and smart to use. IKEA products and their names are the said Hesham Abdulla Al Qassim, Chairman of Emirates NBD Egypt. In addition to same in all IKEA stores. Conveniently, IKEA has a 1300-parking lot as well as its Egypt, NDB has branches in Saudi Arabia, Qatar, Singapore and UK as well as own branded restaurant that serves Swedish and international cuisine. several representative offices in Asia.

Business Monthly – May 2014 I 57 Announcements

Jobs AMCHAM RECRUITMENT CENTER Code Vacancies Company Name 78850 Treasury Manager Family Corporation 78807 Oracle Application Manager Samcrete Egypt 78741 Business Development Director National Telecom Co.- NTC 78700 Administration Manager National Automotive Co. NATCO - Mercedes 78704 Trade Marketing Manager GlaxoSmithKline- GSK 78695 Sales Manager Nahdet Misr for printing, publishing & distribution

For more information about these jobs and others, visit: www.amcham.org.eg/recruitment – e-mail: [email protected], Tel: (20-2) 333 88 220 Ext. 1513 - 1514 Fax: (20-2) 333 73 779

Top Tenders TOP TENDERS FROM TAS Bid bond Description Client Deadline Specs fees Sectors Supply of pipes & fittings required for the stand-by pumps at subordinated pumping Ministry of Water Resources & Irrigation, the May 19, 2014 145,000 LE Industry stations. Tender released for the account of the General Dept. for Studies & Specs. Mechanical & Electrical Dept., the Studies & 1,000 LE Water & Waste Water Specifications Directorate

Request of best offers & proposals in a public auction to finance and construction of the Potable Water & Sanitary Drainage Co. in Giza, El May 18, 2014 150,000 LE Electromechanical Works Water & Waste Water so called company's General Secretariat building on 1,520 M2 area to comprise a base - Warraq Potable Water Utility 500 LE ment, a garage, a ground floor and nine repeated floors on the basis of co-exploitation under which the investor to be given leasing rights of the garage, the ground floor and the four repeated floors, alternatively the last 5 repeated floors. The requested of the lease duration is to be determined in the offer. Pre bid meeting is set for 5/4/2014. Performance bond is L.E. 1 million. Beneficiary Sectors Generating Sectors

www.amcham.org.eg/TAS For further information, contact the Business Information Center at AmCham Egypt Tel: (20-2) 3338-1050 – Direct: (20-2) 3761-9641 • Fax: (20-2) 3338-9896 • E-mail: [email protected] Website: www.amcham.org.eg • US Website: www.amcham-egypt.org

U.S. Exhibitions Listings are now available on our website: www.amcham.org.eg Exhibitions related to the following sectors are scheduled for the upcoming months Sector Show Name Website Contact Person Tel # May Energy-Oil Offshore Technology Conference www.otcnet.org/2014 Mai Abdelhalim 2797-2146 The National Restaurant Hospitality Association Restaurant, Hotel- www.restaurant.org Mai Abdelhalim 2797-3482 Motel Show (NRA Show) June ICT-AAV Equipment InfoComm International 2014 www.infocommshow.org Hend El Sineity 2797-3482 Franchise 2014 International Franchise Expo www.ifeinfo.com Cherine Maher 2797-2688 Specialty Food Fancy Food Show www.specialtyfood.com/fancy-food-show Rania Mekhail 2797-3487

For more information about these exhibitions, please contact: The Commercial Service at the US Embassy Tel: (20-2) 2797-2330/ 40 - E-mail: [email protected]

*Please refer to the Commercial Service at the US Embassy for any updates on the exhibitions.

58 I Business Monthly – May 2014 Benefits

NATIONAL BANK OF EGYPT

Emaar Become an NBE MasterCard Platinum cardholder and enjoy the prestige that comes along with it. NBE's Platinum Card is simply tailor-made to cater for your impulses. AmCham members will get pre-approved limit from 50,000 EGP and up to 75,000 EGP. * 100% waiving of the first year fee (400 EGP) - * Renewal fees for basic cards: 200 EGP * Fees waived for life for two supplementary cards Apply by sending an email to [email protected] with your request and you will be contacted by one of the representatives mentioned below.

**Offer will be granted to AmCham members upon presenting their AmCham valid membership card 2014** For more details, please contact:- • Mahmoud Moustafa Email: [email protected] Office: 25945000 ext. 45808 or Mobile: 01221010622 • Wael Shafey Email: [email protected] Office: 25945000 ext. 11751 or Mobile: 01210700300 Contacts available from Sunday till Thursday (from 9:am - 5:pm)

Please visit AmCham’s Cyberlink on http://www.amcham.org.eg/cyberlink for more information on all AmCham benefits Offer is valid until June 30, 2014

NANO TECH INTERNATIONAL ALLIANZ INSURANCE CO. – E GYPT

NanoTech International, a sister company of World Trading Co. has the pleasure to pre - Allianz Egypt is giving AmCham members a special DISCOUNT on its line-up of retail sent a 15% discount, an exclusive offer on Solar Water Heaters to AmCham members. insurance products and services upon presenting their valid AmCham membership card. NanoTech International for Industry and Trade is an Egyptian company established in 2009 as a focal point for Egyptian and Chinese economic and commercial relationship working in the field of green energy applications, specially the solar ones in Egypt and Offer details: Middle East. 15% discount on Car Insurance - 20% discount on Home Insurance NanoTech is specialized in providing “Total Solar Solution” and it is committed to devel - 25% discount on Travel Insurance - 20% discount on Personal Accidents oping solar applications to satisfy the growing needs of both residential and industrial * Terms & Conditions apply communities. * Terms & Conditions apply ***Discounts will be granted for AmCham members upon presenting their ***Discounts will be granted for AmCham members upon presenting their AmCham 2014 membership card*** AmCham 2014 membership card*** For more information, please contact: For more information, please contact: Heba Samy Customer Services: Telephone: (202) 2322-3401 Telephone: (202) 3303-0421; 3302-6793 Mobile: 010-67055945 Mobile: 010-2043-0601; 010-2043-0106 E-mail: [email protected] E-mail: [email protected]; [email protected] Please visit AmCham’s Cyberlink on http://www.amcham.org.eg/cyberlink Please visit AmCham’s Cyberlink on http://www.amcham.org.eg/cyberlink for more information on all AmCham benefits for more information on all AmCham benefits This offer is valid until June 30, 2014 This offer is valid until December 31, 2014

The BUSINESS MONTHLY Classifieds section is open exclusively to AmCham member companies. Text ads are £E 150 for up to 30 words, £E 5 per additional word. Abbreviations, phone numbers and e-mail addresses count as one word. Display ads are £E 100 per cm in height, per column (max. 20cm in combined total height). Discounts are offered for regular advertisers and repeat bookings. Insertion orders, payment and ad content must be received by the 15th of the month preceding publication. All classified ads subject to editorial approval. For more information, or to place a classified ad, contact Amany Kassem at (20-2) 3338-9890, fax (20-2) 3338-0850, e-mail: [email protected]

Business Monthly – May 2014 I 59 Media Lite A Glance At The Press

We were using coal as an alternative fuel source long before the government. Remind me to patent it.

Akhbar, April 13

Media Lite is a satirical review of items published in the local and international press. All opinions and allegations made in them belong solely to the original publications and no attempt has been made to ascertain their veracity. leged families and orphans to make MOaNaEdi TpIoMlicEe TarOresOte dM 1A1N sYuspects who OIMnP thEeR riSngO rNoaAdT hIeNaGdi nAg Nfro OmF MFaICadEi R to their lives a bit less arduous. One of they said were trying to seize an empty New Cairo, one unlucky air conditioner their highly publicized activities is land plot and sell it using forged owner - repairman on a double date had trouble acting as a matchmaker for orphan ship documents. At first glance, this may keeping his cool. Our Romeo was girls when they come of age. These seem like your run-of-the-mill petty crime. stopped at a routine checkpoint along with group weddings are usually a media But police were soon experiencing deja- two lovely ladies. Police asked for his event, so it was a shock to many that vu. It turns out this was the second time the license and registration, and were sur - at a double wedding held on April gang had tried to seize the land. The first prised when he responded by yelling at 11 in a Mansoura Governorate foot - time was a year ago after the group had them and claiming he was a high-ranking ball stadium, both grooms were actu - constructed a small house and fence on army officer. He presented an ID card ally paid to play the part. Media the plot, without permission from the identifying him as a member of the police reports have not specified how the Maadi city planning authority. Their home - force, but he was quickly arrested and his farce was discovered, but a dead stead was ordered torn down. But the car searched. Inside police found a fake giveaway was one groom showing intrepid criminals bribed the demolition gun and fake police and firemen outfits, up in a plain white t-shirt, black team and forged building permits. Then but no military paraphernalia. It turns out leather jacket and jeans à la John they set about constructing a larger build - the suspect was just blowing hot air, as he Travolta in the 1978 movie Grease . ing on the property. But alas, they flew too had raided a costume shop to steal the Interestingly enough, the brides were close to the sun, constructing a five-story props. He believed that impersonating a revealed to be real orphans, who are apartment building in a zone that only police officer would help his chances with entitled to a welfare check as long as allows four-stories, thereby catching the the opposite sex. they remain unmarried. They were attention of the local building inspector Akhbar Al Youm, April 5 not made party to the scam, as they who found their ownership documents to did not see their intendeds until the be fake. Now, these persistent would-be night of the wedding. Mansoura con-artists have found themselves arrested TPhLeA OYrImNaGn HCOhaUriStyE A ssociation is a authorities are now investigating the and the building is being torn down. well-known organization that works charity association regarding their Al Ahram, April 9 with some five million under-privi - matchmaking activity.

60 I Business Monthly – May 2014