Egypt keen for US investment

Arab Spring economies: Hisham Qandil, Egypt's prime minister, this week tried to convince more than 100 American business executives that investing in his burgeoning economy was a safer bet than dealing with the notorious tourist scams at the Great Pyramids of Giza.

Souvenir salesmen and camel owners wait for tourists at the pyramids in Giza. Marwan Naamani / AFP

Cairo // Hisham Qandil, Egypt's prime minister, this week tried to convince more than 100 American business executives investing in his burgeoning economy was a safer bet than dealing with the notorious tourist scams at the Great Pyramids of Giza.

"You won't have to pay 5 [Egyptian] pounds [Dh3.02] to get on a camel and then 50 pounds to get off, " he said with a broad grin.

Mr Qandil sought to reassure the biggest ever business delegation to Cairo "Egypt is open for business" ahead of the president Mohamed Morsi's planned visit to Washington this month.

The US delegation, which represents regional chief executives of US companies including Coca-Cola, General Motors and ExxonMobil, is in Cairo this week in an effort to revive Egypt's flagging investments and boost confidence in the economy.

Mr Qandil said he was working on finalising an economic plan that would phase out wasteful subsidies, adding he expected the economy to grow in the current financial year by 3 to 4 per cent, or more if investment goals are achieved, Reuters reported.

He also said the plan was to cut 1 percentage point off the country's budget deficit, which is already equivalent to about 8 per cent of Egypt's GDP, Reuters reported.

The unusually large US-led turn-out comes as the United States and Egypt negotiate the terms of writing off US$1 billion (Dh3.67bn) of debt. The US is also keen for Egypt to finally secure an agreement with the IMF for a $4.8bn loan package, after more than a year of dithering.

Michael Froman, the deputy assistant to the US president Barack Obama and the deputy national security adviser for international economic affairs, was also speaking to the delegation in Cairo this week. He said it was "critical that Egypt designs a reform package the IMF can support".

Political disagreements have delayed the signing of a loan and the IMF has insisted it needs broad political backing before any agreement is signed. Egypt's economy has struggled to recover from more than a year and a half of political turmoil as foreign investors and tourists, two of the country's main sources of foreign currency, fled after the uprising that toppled then president Hosni Mubarak.

Foreign direct investment fell to $218 million in the nine months that ended in March compared with $2.1bn a year earlier, according to Egypt's central bank. Tourism revenue also slumped 18 per cent to $7.1bn during July last year and March. Analysts and investors had expected economic revival to come hand-in-hand with political stability once Mr Morsi was sworn in as the president and a cabinet was in place under Mr Qandil.

However, no official economic policy has been announced yet and budget-draining initiatives including subsidies that soak up up to a third of the budget are still in force despite promises to the contrary.

The nation is still grappling with labour unrest, too, with demands for improved social welfare ringing throughout the country.

Executives arriving in Cairo over the weekend managed to dodge a labour strike by employees of Egypt Air, the country's national carrier.

Despite the air of uncertainty, the US visit this week was generally regarded as a positive step for the country.

"The size of the meeting was decided by the visitors and represents the scale of interest in Egypt," said Emad Mostaque, a strategist at Religare Noah, an emerging-markets investment bank based in London.

"I think Qandil did a good job and I hope he sticks with his promises."