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Business
Business Profile
As Egypt’s capital and largest city, Cairo is the hub of the country’s economy. With a GDP of $68.8 billion in 2001/02 (a 2% increase on the previous year), Egypt has the third largest economy in the Middle East and North Africa region, after Saudi Arabia and Israel. Its trade in goods and services now exceeds $30 billion. But Egypt is still an emerging market, moving from an economy previously dominated by nationalised industries to one that is increasingly being led by the private sector. The commitment of the current government to privatisation of industries and to banking and other reforms has spurred foreign investment. Economic growth slowed down to 2.5-3% for 2001/02 (it was 5.7% in 1998/9). Inflation is under control and is expected to remain below 3.5% in the coming years. The budget deficit fell to 5.5% of GDP in 2001/02, with balance of payments deficit declining to only 1% of GDP. Exports show an increase of around 2% per year, with non-petroleum exports showing an increase of 15%, mainly due to rude cotton and free-zone exports. Unemployment, however, is high in Egypt as a whole – at 17.5% – and even this is only the official figure and does not include the large numbers of unregistered people. Cairo’s figure is not known but is certainly higher than this average. Reducing unemployment, primarily by encouraging private sector initiatives, is a high priority for the government.
The public sector, including government and social services and the military, makes up the city’s largest ‘industry’. Cairo is the centre of a growing trade, finance and insurance sector, with names such as American Express, Coopers & Lybrand and Price Waterhouse present in the city. Tourism and the industry of the Suez Canal (serving the shipping companies) are the major industries in the services sector. Tourism is the country’s largest source of foreign currency and has shown remarkable growth, with record numbers of visitors (70% of them from Europe) in 2002. The most important tourism markets are Italy (up 59% in 2002); Germany (up 30%) and the UK (up 21.9%).
Although total revenues have been falling in recent years, petroleum remains one of the key industries and is poised to recover with the rise in oil prices. With gas reserves of 57 billion cubic metres and more reserves being exploited, Egypt has become the 12th largest natural gas producer in the world. Oil companies such as Mobil, Esso and Exxon are all investors here.
Just under a third of Egyptians are employed in agriculture, with cotton being the main export. The industrial and mining sectors made up 20% of GDP in 1998-99. The economy is reasonably well diversified, with manufacturing, construction, communications and transport, as well as tourism, all showing significant expansion. Transport and communications have shown strong growth over the past few years. Key industries, such as metals (aluminium, iron and steel), petrochemicals, cement, automobiles, textiles, consumer electronics and pharmaceuticals, are increasingly expanding under private sector management. The government has also pledged to make the development of high-technology a priority, and to attract export-oriented manufacturing firms to establish bases in Egypt.
Business Etiquette
Courtesy and hospitality are as important in business dealings as they are in Egyptian life generally and, indeed, as they are throughout the Arab world. The host of a business meeting should be sure to offer guests some tea or a small snack before commencing the meeting proper. It is considered polite to refuse the first offer but the host must insist and then it would be impolite for the guest to refuse on the second or third invitation to have something. Alcohol should be avoided until visitors are certain of their Egyptian colleague’s attitude towards it. Even when drinking with Egyptians, visitors should only ever partake in moderation. This especially applies to women, for whom it is not considered seemly to over-indulge in alcohol.
Hospitality is generous. If invited to a business lunch, the table will probably groan with food and visitors must do their best to enjoy as much of it as possible. It is always better to claim an allergy to a particular kind of dish than to express distaste.
Throughout the Arab world, it is considered the height of bad manners either to display anger or to openly criticise another person in public. Tact and diplomacy will be required to conduct business meetings and much will be gained by a close observation of the way Cairo businesspeople operate. Instead of criticising or contradicting someone, visitors should instead ask if they think a different way of doing something might be better.
In social life, it is considered impolite to turn up for a rendezvous at precisely the agreed time. Everyone is always a little late. This is less true in the business world but does still happen. No one minds foreigners being on time but Egyptians certainly exercise the right to be late and visitors should be prepared for this and not take offence.
In this Muslim country, women should not offer to shake a man’s hand, but only do so if the man offers his hand first. They should dress smartly for business meetings and always dress modestly.
Government offices are open 0830-1400 except Fridays and sometimes Saturdays. Business hours for the private sector are generally 0900-1400 in winter, until 1300 in summer; most open again in the evening from 1700-2000. Muslim businesses may be closed on Thursday afternoons and Fridays, Christian businesses on Saturday afternoons and Sundays.
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