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Egypt Is back, says Principal Deputy Minister of Investment

Interview - March 5, 2015

Ambassador Yasser Elnaggar brings years of international experience from diplomatic corp to build investment ties cross-culturally


How optimistic are you regarding the current state of Egypt’s economy and its future?

Ambassador Yasser Elnaggar: I’m incredibly optimistic.  As an Egyptian citizen and government official, I see a number of indicators that are proof of the positive direction in which the country is headed. The political will and enthusiasm exists to implement the policies and direction outlined by the elected President and his government to revitalize the Egyptian economy after three years of no change. This sentiment is reflected by the public’s support.

 I see a high sense of responsibility in the government leadership that is married with a determination to deliver on its promises.  This government is committed and credible in what it does, what it is doing, and what it intends to do.  I personally attest to this as I witness this determination from those around me.  There are a number of decisions, policies, and laws that this government has already adopted to improve the economic situation – and a vibrant agenda of more positive changes ahead.  The effort put forward by the government, its officials, the Prime Minister, and President, into resolving problems, issues, and making the difficult decisions, is something Egypt has not witnessed in the past 15 years. 

How is the government implementing these changes and reforms? 

This government, led by President el Sisi, has a unique approach that promotes accountability.  The government is not only willing to make the necessary difficult decisions, but hold others to this high standard and follows up on a regular basis.  This determinism is not tied exclusively to decision making but also to the detailed reviews of the implementation of its policies, and follow-ups in the process.  A review is done quarterly on the economic and social development plan. 

The Minister of Investment, since coming on board, has required that all companies with public shares must report on a monthly basis their expenditures and financial data in order to provide us with immediate feedback on the changes that we are implementing, as well as specific data on the direction the economy  is headed.  As a result of this timely information, we are able to make adjustments as necessary.  We can try to better understand what the problems are and solve them in a timely fashion. 

This willingness to solve issues collectively gives me a sense of optimism. And domestic and foreign investors can sense the difference.  This is why companies, whether regional, global, or domestic, now consider Egypt an attractive market for opportunity.  They are either expanding current ventures or actively investing in the country. 

The Government is nearing the completion of an economic recovery plan as well as a series of economic and social reforms to show the business community that today’s Egypt has a vision that includes real reform. There are some critics of the investment reforms and those that believe the one-stop-shop will not be as effective as expected.  What is your response?   

When new endeavors are embarked upon, a number of critics will always arise that do not grasp the realm of what the reforms entail.  That is partly a fault on the government as we did not explain the program well or reach out to the right groups.

But let me be clear; we are not re-inventing the wheel.  We have seen this model used in a number of countries and are following their successful path, but adapting it to the unique circumstance of Egypt. The success will obviously be judged by the results, but the results have been positive to date.  And it is not the government making these decisions alone; we have consulted widely with international institutions on how best to increase our competitive advantage.

Can you further explain the Ministry of Investment’s one-stop-shop?

To fully explain the one-stop-shop concept, let us examine two things when putting a dollar in an economy.  The first thing that must be examined is the return on the dollar. The second is how quickly you can enter with the dollar and exit with that dollar.  The Internal Rate of Return (IRR) is pivotal.  The IRR in Egypt is the 2nd highest in the world.  However, the entry and exit are not so smooth.

The concept behind the one stop shop is to simplify investment in Egypt.  We want to make it easier for companies to enter the market, receive approval for their investment and start their new venture. That is our goal with the one-stop-shop.  It is an automated system.  According to the World Bank and IFC, 12-18 months is needed in order to have a fully automated system. 

With this new method, only one entity deals with the investor.  As a result, the company seeking the license no longer has to deal with multiple parties, reducing opportunities for corruption and facilitating greater investment in the economy.

The Ministry is also going to open an investment promotion agency, what is the purpose of establishing this agency?

At the Ministry of Investment, our intent is to promote further investment in Egypt.  In order to do this, we have several objectives in the new Investment Law.  First, we want to establish an independent investment promotion agency.  This is a point many misunderstand.  People assume that promotion entails having an advertisement on a street or a few videos floating on the internet.  The Investment Promotion Agency will be one place where potential investors can go to find an investment map, based on sectors, readily available and accessible to companies in Egypt and abroad.  Our intent is to simplify the investor procedures especially for foreign companies who may not fully understand the market here. 

This approach is common in other parts of the world. Here in Egypt, it is the first occasion to introduce this.  Hence, we understandably face skepticism, as this is new.  This investment map is a huge endeavor that has taken meticulous planning with many stakeholders involved.  As such, we need an agency to promote it. Investing is a rigorous process and effectively marketing Egypt to potential investors, elucidating the correct methodologies and procedures for investment, is a necessary but massive undertaking. And the results must be made readily available to all potential investors.  

The Investment Law aims to enhance social inclusion.  What areas are targeted? 

One of the three main aims of the amendments to the Investment Law is directing greater investments to the underdeveloped provinces in Egypt.  In the past, we have paid lip-service to developing Upper Egypt and border provinces but only minimal actions were taken.  It is clear that we need to find ways to spur private sector interest in developing these areas.  The role of the government should only be that of a regulator and to introduce laws and policies that promote investment.  It is the private sector that ultimately will make the difference.  As the private sector is the engine of growth, the government must find ways, through our Investment Law, to encourage investment in previously untapped regions of Egypt. 

You spent 15 years in the US as a diplomat. Now that you are back in Egypt, how are you utilizing the experience gained abroad and your understanding of the American psyche to change the current perception Americans may have of Egypt? 

Americans love Egypt.  They care about Egypt as they are more affiliated with Egypt than any other country in the region.  They learn Egyptian history from the 5th grade as they study about the Pyramids, Queen Nefertiti, and the story of King Tut.  Caring about what happens in Egypt is not dictated by a hegemonic power.  It is rather that Americans pay attention to the news about Egypt, when perhaps they are more ambivalent to the current events of other countries. 

On the other hand, Egyptians admire the “American Dream.” However, Egyptians are sensitive to who stood by us during difficult times.   This is where we have doubts vis a vis the United States.  This is something I have attempted to explain while living in the US.  There are certain geopolitical facts that cannot be changed.  The US is the world superpower and Egypt is the regional power.  You cannot form a coalition to confront major security challenges in the Middle East without Egypt.

The relationship between Egypt and the US is strategic.  Due to the common threats the two states face together, it is crucial for Egypt to stand on its own two feet and advance economically.  We must address many complicated issues such as economic and social reforms, inflation, national security threats as this is for the betterment of the region and beyond. 

You are very involved with the planning and promotion of the Egypt Economic Development Conference (EEDC).  What are your expectations for this conference?  Is it more about changing the perception of the country, signing of contracts, or releasing the investment roadmap?

This conference is about sending a clear message to the international political and business community, that Egypt is back on track. We are back economically with a solid social and economic development plan.  Egypt is back- its people support the policies of the President, Prime Minister and their government and are prepared to take the necessary steps to revitalize the economy.  

It makes an immense difference when the objective can be visualized.  Egyptians today can see where the country is heading. They have the utmost trust in their leader; they believe they have made the right choice.  Despite all the criticisms you hear, there is still a fundamental and underlying trust that the government is taking Egypt forward. 

In order to move Egypt along a path of progress, we need to adopt certain policies.  Perhaps our challenge is to better explain these policies. Perhaps that is why I am sitting here with you today.  To sum it up, the conference is about announcing to the world that “Egypt is Back” through presenting our economic, social, political reforms, by presenting certain projects and opportunities to the private sector, who will help package it themselves to one another. 

This conference is important as it represents the credibility of our country.  We will present ten respective sectors following international standards, with clear strategies and workable action plans. The status quo is no longer acceptable; this government wants action to get things done.  It is not about making noise or saying things that sound nice but with no follow through.

This government is indeed motivated to make changes and achieve the goals that they have set out to.  One such challenge, however, is the security issue.  Do you think the issue of regional security will threaten the rest of the world from realizing the potential of Egypt? 

The security issue is an important consideration, but one challenge that we are facing head on.  We understood on June 30, 2013, the second Revolution, that there would be a price to pay. The price is of blood; a price we continue to pay-that my countrymen and family members pay.  We are faced with a clear-cut choice.  We decided that we could not accept the Muslim Brotherhood.  When we took to the streets in 2013, it was not just one segment of society.  It was the entire population uniting to send a message that we did not want that government.  We did not want terrorists running our country.

 It was a risk that I personally took in order to secure a better future for my two children.  We understood the challenge then.  I don’t believe the rest of the world gives enough credit to the Egyptian people in that we knew the price that we would have to pay for our actions. The price for government upheaval would be paid in blood.  We decided to put our trust and confidence in the current President because we knew that we deserved better. 

Terrorism is not only about simply killing people.  It is terrorizing people through the threat of killing.   Anyone that gives a platform to a terrorist is threatening a population, harboring terrorism, and by default, is a terrorist.  This is something that I believe in with great conviction.

You’ve had such an extensive career as a diplomat thus far, what’s next for you?

I hope to make a difference in my capacity here at the Ministry of Investment.  I want to use my experiences to help pull my country forward to take the position it deserves on the world stage.     

You’ve spent a lot of time in the US, now in Egypt. Do you plan on going overseas again?

I hope so. I have spent significant time in the United States as well as in international organizations- the Arab League and the UN, for example. My experiences have helped me to understand the US business community, the political and business circles of influence and how they operate.  The lines are less defined in America concerning the political and business communities.  I am a believer in the strength of the strategic relationship between the US and Egypt.  This relationship must be based on mutual respect and understanding.  There is not enough being done by both parties to explain this alliance and relationship and to strengthen it.  

How are you using this knowledge to drive the message home?

I know how to speak in a way that our friends in the US understand. I maintain relations with many people in US business and political community with whom I consult with on a regular basis.  It is important to have someone who can understand and effectively communicate with these leaders about Egypt and what can and cannot be attained.  I bring clarity.  I am a strong believer in the bilateral relationship, although misconceptions remain on both sides. I believe I can help in bridging this gap. 

What is your contribution to Egypt that you are most proud of?

The Revolution on June 30, 2013, was many things.  Part of it was a personal stake in the current goings-on of Egypt. After this Revolution, representing Egypt in Washington, was one of the most challenging tasks I have ever encountered as it was difficult to explain the strong support of the Egyptian people for taking action against the seated government. I returned to Cairo just recently, but remain very proud of my efforts and that of my Embassy during that period in explaining the realities on the ground in Egypt.  There are certain principles in the American psyche that cannot be changed. Yet we attempted to explain our actions and our position.  With diligence and persistence, I was able to help many in the US better understand the importance and the unfortunate necessity of taking this drastic action. In a small way, I believe our efforts have helped to maintain the strong ties that exist between our two countries.