Headache for Egypt’S Ever-Changing Homes in the Middle of the Night
Total Page:16
File Type:pdf, Size:1020Kb
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: L L INSURANCE FUNDS A REALITY L L LIQUIDITY OVERFLOWS L L 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.