Egypti
Egypt country profile
Basic facts
| Official name | Arab Republic of Egypt |
| Country code | EG |
| Government type | Republic, currently under military rule. |
| National day | July 23 |
| Area | 1,001,450 km2 |
| Population | 83,688,164 (2011) |
| Neighbouring states | Israel, Jordan, Saudi Arabia, Sudan and Libya. |
| Language | Arabic (Official) |
| Religions | Islam (90%), Christianity (9%) |
| Currency | Egyptian Pound (EGP) |
| Exchange rate | 1 EGP = 0.16259 USD |
| Main industrial products | Hydrocarbons, textiles, processed food, metals |
| Most important export goods | Crude oil and petroleum products, metal products, cotton, textiles and chemicals. |
| Most important import goods | Food, commodities, equipment and wood products |
| Most important export countries | Italy, US, India, Spain, Syria, Saudi Arabia, Japan, Germany. |
| Most important import countries | US, China, Italy, Germany, Saudi Arabia |
| Main natural resources | Petroleum and natural gas, iron ore, phosphates, manganese, limestone, gypsum, talc, asbestos, lead, zinc. |
| Tax rates | Income Tax 10 - 25%, Corporate Tax 20 - 25%, VAT 10% |
| Level of corruption | In Transparency International's comparison, Egypt ranks 112th among 182 countries (bigger the figure, more the corruption). |
| Competitiveness | In World Economic Forum's Global Competitiveness Index 2011–12, Egypt ranks 94th among 142 countries (smaller the figure, better the competitiveness). |
Source: Finnish Ministry of Foreign Affairs
Egypt economy
Main Economic indicators during 2008 - 2013
|
| 2008 | 2009 | 2010 | 2011 | 2012e | 2013f |
| GDP at current prices (billion USD) | 164.8 | 187.3 | 214.5 | 231.1 | 232.9 | 259.3 |
| GDP per capita at current prices (USD) | 2,020.0 | 2,260.0 | 2,540.0 | 2,970.3 | 3,118.9 | 3,068.9 |
| GDP (% change) | 7.2 | 4.7 | 5.1 | 1.8 | 1.6 | 3.7 |
| Gross Fixed Investment (% change) | 14.8 | -10.2 | 3.9 | -5.6 | 1.3 | 3.8 |
| Private consumption (% change) | 5.7 | 5.7 | 5.1 | 5.0 | 4.0 | 4.5 |
| Exports (% change) | 28.8 | -14.5 | -3.0 | 3.7 | 0.8 | 5.6 |
| Imports (% change) | 26.3 | -17.9 | -3.2 | 8.1 | 6.4 | 7.0 |
| Consumer Price Index | 18.3 | 11.8 | 11.1 | 10.2 | 9.1 | 8.7 |
| Unemployment rate (%) | 8.7 | 9.4 | 9.0 | 12.2 | 12.7 | 11.9 |
| Exchange rate (yearly average) EGP / 1 USD | 5.43 | 5.55 | 5.63 | 5.94 | 6.04 | - |
| Exchange rate (yearly average) EGP / 1 EUR | 7.99 | 7.73 | 7.47 | 8.27 | 7.77 | - |
Source: Economist Intelligence Unit
Trade between Egypt and Finland
Trade between Egypt and Finland during 2007–2011
| Million EUR | 2007 | 2008 | 2009 | 2010 | 2011 |
| Finnish Exports | 265.3 | 272.2 | 245.8 | 341.2 | 242.8 |
| Finnish Imports | 18.9 | 34.8 | 19.9 | 30.8 | 28.5 |
| Trade Balance | 246.5 | 237.3 | 226.0 | 310.4 | 214.3 |
Source: Finnish Customs
Top ten Finnish Export products (SITC 2 level) in 2011
| Product | Value of Exports (million EUR) |
| Cork and wood | 121.5 |
| Pulp and waste paper | 27.5 |
| Paper, paperboard and articles thereof | 22.4 |
| Non-ferrous metals | 20.2 |
| General industrial machinery | 6.6 |
| Telecommunications and sound recording equipment | 6.5 |
| Electric machinery and parts | 6.2 |
| Organic chemicals | 6.0 |
| Machinery for specialized industries | 5.3 |
| Dairy products and birds' eggs | 5.2 |
| Total exports to Egypt | 242.8 |
Source: Finnish Customs
Top ten Finnish Import products (SITC 2 level) in 2011
| Product | Value of Imports (million EUR) |
| Vegetables and fruits | 10.2 |
| Textile yarn, fabrics, made up articles, etc. | 5.6 |
| Non-ferrous metals | 4.8 |
| Articles of apparel and clothing accessories | 3.1 |
| Plastics in primary forms | 2.4 |
| Iron and steel | 0.6 |
| Manufacturers of metals | 0.4 |
| Electric machinery and parts | 0.3 |
| Crude fertilizers and crude minerals | 0.2 |
| Road vehicles | 0.2 |
| Total importsfrom Egypt | 28.5 |
Source: Finnish Customs
Egypt strengths and weaknesses
Strengths
Egypt is the most populous Arab country. Due to its size, the country is an important and influential market, which is likely to grow in the long term. Egypt has a sizeable and growing minority with spending power similar to consumers in industrialised economies.
The country's prime location renders it an export base to Asia, Africa and Europe. Egypt is also accessible through a number of airports and ports across the globe. Movement of goods has increased with an improvement in the transport system and modernisation of ports.
Egypt has a large, young, educated and trainable workforce of nearly 22.5 million that is available at a competitive cost. Females constitute about 4.5 million of the workforce.
A new report by Ernst & Young, in collaboration with Oxford Economics ranks, Egypt as 9th among the top African countries for foreign direct investment. The report also notes Egypt's strengths: a, "relatively well-educated population, sizeable domestic market and proximity to Europe."
In recent years, Egypt has established itself as an outstanding location for IT and business process outsourcing. The country's track record in IT is impressive, with a number of leading global companies capitalising on its unique mix of strengths. With existing companies expanding operations and the entry of new players, Egypt is playing an increasingly important role in IT and business process outsourcing.
Weaknesses
There are significant constraints on Egypt's institutional and political effectiveness. Despite legislative improvements, enforcement has been poor due to a slow and corrupt bureaucracy. Success would depend on the ongoing commitment to economic reforms and major improvements in political and institutional effectiveness. The government needs to enhance the efficiency of bureaucracy, to develop a more effective commercial legal system, continue withdrawing the state from economic activity and reform state finances.
Though the new President, Mohamed Morsi, has assured to revive the tourism industry, people believe the implementation of strict Islamic laws would deter Western tourists.
The economy contracted in the first half of 2012 compared to the second half of 2011, also continued weakness in the Eurozone is reducing demand for Egyptian goods. A spike in global food prices could exert pressure on the country's import subsidy bill.
While fertile land is abundant, particularly along the Nile, the country depends on foreign producers for nearly all of its agricultural needs including wheat. Though the state sets prices on basic goods, such as bread and heating oil, the underground economy flourishes when the cost of imported commodities rises. Some bakers sell their flour allotment in the black market instead of manufacturing bread, thereby, leading to supply shortages, long lines and, sometimes, unruly crowds.
Egypt imports about 80% of agricultural products; in 2012, foreign goods are likely to be expensive across the board. Inflation is pegged at 9 % which is expected to increase in the coming months along with a rise in borrowing costs.
Egypt business culture
Egypt, one of the world's earliest civilisations, has served as the crossroads of Arab culture for over a millennium. Continuing to be a bridge between the European west and Arab east, due to its size and position, the country has established its central role in the region. Egypt is currently the most populous Arab country worldwide and its culture is influenced by Mediterranean, African and Arab countries. Egyptians take great pride in their heritage and varied culture, which has led to the development of a modern unified society.
Work culture
Generally, business hours in Egypt vary according to the time of the year. During winter, many businesses are closed for much of the afternoon and reopen for a few hours in early evening. Typical working hours are 9.00 a.m. to 5.00 p.m. from Sundays to Thursdays. The timing for public sector and services is from 9.00 a.m. to 2.00 p.m; they are, closed on Fridays.
Punctuality is not considered a priority in Egyptian business culture. However, visitors are often expected to be on time for meetings.
Business structure
Organisations in Egypt have a strict hierarchical structure. The directive and authoritative leadership style is reflected in their hierarchy. In most business organisations, decisions are made at the top level, while orders cascade down to the commanding chain. One is expected to strictly adhere to the commands with little or no freedom to question the senior authority. Status and hierarchy are very important in Egyptian culture. In general, Egyptians give preference to age and experience in a business environment. Therefore, it is wise to include older people with notable titles in the team for business dealings.
Business meetings and negotiation
Business and personal lives are closely intertwined in Egyptian culture. Great importance is given to interaction with business contacts on a personal level. Business discussions are often interspersed with small talk. It is common for meetings to be interrupted by personal visitors. However, high-level government officials often adhere to more western business practices and hold private meetings without interruptions.
In general, preliminary business meetings with Egyptians tend to be a relatively formal affair. Business meetings, unless tagged confidential, could be frequently interrupted by visitors and topics unrelated to the meeting could also be discussed. This is primarily due to the open door policy of Egyptians. Although meetings do not adhere to a strict schedule, the agenda and attendee details should be shared well in advance with potential clients. It is advisable to have written material in Arabic and English; documents should also include Gregorian and Arabic dates. Presentations should be put forward in a suitable format and claims should be supported with research and documentation. Emphasising on mutual benefits of the proposal and highlighting key benefits for the short and long-term are considered positive.
Egyptians are tough negotiators. Business dealings move at a slow pace, especially in the case of a new venture or deal to establish a partnership or alliance in Egypt. The business society (primarily government run bodies and family – owned businesses) is extremely bureaucratic. It may take several visits to accomplish a simple task. Decisions are reached after great deliberation. Discussions with a government entity tend to take longer as approvals must often be given by ministers of several departments. Therefore, one should be willing to wait before reaching a conclusive decision.
Gifts
Business gifts are rarely exchanged in Egypt. However, if invited to an Egyptian's home for dinner, good quality chocolates, sweets or pastries should be gifted to the hostess. Flowers and alcohol are considered inappropriate gifts.
Economy
The Egyptian economy is highly centralised under President Gamal Abdel Nasser. In the 90s, a series of International Monetary Fund arrangements, coupled with massive external debt relief resulting from Egypt's participation in the Gulf War coalition, led to an improvement in the macroeconomy. Since 2000, the pace of structural reforms, including fiscal and, monetary policies, privatization and new business legislations, helped Egypt move towards a more market-oriented economy and increased foreign investments. Reforms and policies have strengthened macroeconomic growth results, which averaged 5% annually. However, the government has largely been unsuccessful in equally sharing the wealth; also growth benefits have failed to improve economic conditions for the broader population, especially with rising unemployment and underemployment among youth under the age of 30. A youth protest demanding more political freedoms, eradication of corruption and improvement in Bahrain resign on 11 February 2011. In the aftermath of the revolution, foreign exchange reserves declined to just $16.3 billion in January 2012 from $36 billion in December 2010.Also, in February 2012, S & P downgraded Egypt's credit rating from B+ to B in the long term.
Sources: Kwintessential, Communicaid, Executive Planet, Global Negotiator, World Travel Guide, Associated Content