www.amcham.org.eg/bmonthly NOT FOR SALE APRIL 2015 ALSO INSIDE L L AFFORDABLE HOUSING HEATS UP L L WHAT THE VAT MEANS FOR YOU L L WEARABLE ART Landslide Egypt nets billions in investment APRIL 2015 VOLUME 32 | ISSUE 4 36 Cleaning up The March economic summit in Sharm el-Sheikh netted Egypt around $38.2 billion in deals as well as another $12.5 billion in aid from the Gulf. Officials successfully marketed the country to the international media as a business-friendly destination on the rise, despite ongoing economic challenges. Cover Design: Nessim N. Hanna Inside 28 20 Editor’s Note 22 Viewpoint The Newsroom 24 In Brief The news in a nutshell 28 Region Notes News from around the region © Copyright Business Monthly 2015. 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. Business Monthly – 16 I April 2015 APRIL 2015 VOLUME 32 | ISSUE 4 33 52 56 Market Watch Executive Life 44 52 Stock Analysis Dining Out Market pulls back in run-up to Genghis Khan serves up authentic economic summit Chinese food 45 Capital Markets 54 A glance at stocks & bonds Fashion Art & Sole 47 Money & Banking Forex and deposits 48 Key Indicators The economy at a glance The Chamber In Depth 49 Egypt-U.S. Trade Imports and exports 30 58 Affordable housing megaprojects Corporate Clinic Events may not be affordable for most Developers eye “middle-income” 50 62 Six degrees Member News market Cairo tech map shows that success 66 33 depends on connections Announcements Mulling the pros and cons of the VAT 67 How the tax switch could affect SMEs Classifieds 68 Media Lite An irreverent glance at the press Business Monthly – 18 I April 2015 Editor’s Note Director of Publications & Research Khaled F. Sewelam Editor-in-Chief ROOTS Rachel Scheier ast year, a writer friend of mine, seeking a more affordable place to raise her two Contributing Editor children, moved with her family from New York City back to her native state of Tamer Hafez Michigan. Like other creative professionals, she was also intrigued by a nascent urban renaissance taking place in Detroit, an American city that has long been Staff Writer Eric Knecht synonymous with crime and blight. In the second half of the 20th century, the Motor City, as it’s known, went from an industrial powerhouse—home of the auto industry and the Art Director Lfourth-largest city in the United States—to a burned out shell with minimal public services Nessim N. Hanna and littered with abandoned homes. As American car companies lost ground in an increas - ingly global industry, jobs—and eventually the city’s middle class—fled, and with it went Contributing Writer Detroit’s tax base. Decades of corruption and racial tensions helped conspire to bring about Kate Durham the city’s downfall. But even as it became the largest American city to file for bankruptcy in 2013 after rack - Advertising Director ing up $18 billion in debt, a steady stream of artists and entrepreneurs was trickling back Amany Kassem to Detroit, opening coffee shops and boutique hotels, hatching start-up incubators and sus - tainable urban gardens. While people compared the formerly teeming metropolis to a failed Photographers Soha El Gabi state—unable to pay to police its streets or educate its children—young professionals and Said Abdelmessih businesses bought up and renovated cheap downtown real estate, spurring a 21st-century economic boomlet. A few years ago, Dan Gilbert, the billionaire founder of mortgage giant Production Supervisor Quicken Loans, moved the company’s headquarters there. With other capitalists large and Hany Elias small, he set about rebuilding central Detroit, providing services that had previously been the job of the government. Business owners and local residents cleaned up storefronts, Advertising & Circulation Assistants hired private security companies—even installed their own street lights. Tasneem Abo El Ezz In some ways, Detroit’s story would seem to have little in common with Cairo’s. After all, the former is a dwindling metropolis of barely 700,000 people—down from nearly 2 Market Watch Analyst Amr Hussein Elalfy million in 1950—with swathes of abandoned houses, while Cairo is a megacity of nearly 20 million and one of the most densely populated municipalities on the planet. Still, both Chamber News Contacts are faded urban centers long past their heydays whose gritty personas seem to inspire a cer - Nada Abdalla, Farida El Gueretly, tain pride among their longtime residents. Their administrations are both struggling to find Azza Sherif ways to turn them into livable cities. In a way, Cairo’s informal neighborhoods and net - work of microbuses are as much an answer to the Egyptian government’s failure to provide affordable housing and adequate public transportation as Detroit’s privately-run security companies and self-administered street lights are filling that city’s public-sector void. Obviously, neither is a perfect solution. The point is that sustainable urban development comes about organically—from the bottom up rather than the top down. Cairo’s traffic, pollution and unemployment won’t be solved by megaprojects or moving people to a shiny new capital in the desert. As in downtown Detroit, the kinds of efforts most likely to bring about change in Egypt’s millennia-old metropolis are those that involve residents them - selves. Fixing Cairo needs to be done by Cairenes. U.S. address: 1615 H Street, NW • Washington, D.C. 20062 Please forward your comments or suggestions to the Egypt editorial office: RACHEL SCHEIER Business Monthly American Chamber of Commerce in Egypt 33 Soliman Abaza Street, Dokki 12311 • Cairo • Egypt Tel: (20-2) 3338-1050 • Fax: (20-2) 3338-0850 E-mail: [email protected] www.amcham.org.eg/bmonthly CTP and printing: Sahara Printing Company, SAE – Nasr City Free Zone Business Monthly – 20 I April 2015 Viewpoint THE CHARM OF SHARM or three days, Sharm-el-Sheikh witnessed an Given the present circumstances, Egypt needs to use these unprecedented momentum characterized by cash injections and economic support mechanisms to come the high caliber of speakers as well as the out of the bottleneck, bearing in mind long-term plans. number of attendees to the Egypt Economic The Charm of Sharm is behind us; the ball is in our Development Conference. The event also court. The question becomes how do we run with it? ended with an emotional patriotic speech by Presidents and foreign dignitaries do not carry magic President Abdel Fattah el-Sisi that set Egyptians on fire wands. The administration in collaboration with business and clearly defused all allegations of dictatorship and top- organizations must create a monitoring mechanism to heavy governance. The president definitely has popular ascertain first that changes to the regulatory framework, support and can lead his country out of the turmoil of the promised during the conference, are fulfilled; that the past four years. funds received are well managed, and that the business FThe Egypt Economic Development Conference started community remains engaged and motivated. Egypt will out with a political day. The active participation of African not get a similar boost any time soon. countries, the Palestinian leader and other “non-obvious One of the highlights of the EEDC was the John Kerry investors” together with U.S. Secretary of State John breakfast organized on the first day of the conference by Kerry, the heads of Arab states and a solid European pres - AmCham Egypt, the U.S. Chamber of Commerce, the ence created a platform giving Egypt a pivotal position in U.S.-Egypt Business Council and the Egypt-U.S. Business the Middle East. Council. The secretary’s keynote speech clearly empha - The second day clearly stood out as a first-rate econom - sized the importance of bilateral collaboration, the ic development forum. Through well-orchestrated panels, unequivocal appreciation of the efforts of the newly-elect - important strategic topics were discussed, giving both ed president and the common goals of both countries con - guidance and hope for a brighter future. The message was cerning stability and regional peace. clear. The attributes of success exist. Use them. A week after the EEDC, Sharm el-Sheikh hosted anoth - The third day was divided into sectorial panels, making er crucial meeting of the League of Arab States, which will common interests the foundation of tangible business col - be headed by Egypt in the coming term. One of the most laboration based on well-studied, lucrative projects. critical outcomes of this Arab League session was the cre - I purposely did not focus on the financial pledges of ation of an Arab military joint force that will combine the Arab countries. Although they are most welcome econom - efforts of all willing Arab countries to help stabilize the ically and politically meaningful, they are not what Egypt area and fight terrorism. should depend on for its future advancement. Growth has Sharm el-Sheikh has made History. We will all build the to come from within; it must be the fruit of sustainable future. ANIS A. A CLIMANDOS activities away from windfalls and individual transactions. President, AmCham Egypt Business Monthly – 22 I April 2015 In Brief of a floating natural gas import terminal, which is scheduled to allow Egypt’s first imports of LNG to begin in April. The deal comes on top of recent agreements made by Egypt’s state-owned gas compa - In Brief ny with global trading houses to supply 49 LNG shipments over the next two years, a deal with Algeria’s Sonatrach to supply six shipments and an agreement currently under negotiation with UK- based BP to supply 21 shipments.