USTDA Egypt: Forward Forum, Executive Roundtable

Jose W. Fernandez
Assistant Secretary, Bureau of Economic, Energy and Business Affairs
Washington, DC
June 27, 2011

I would like to welcome my fellow panelists and distinguished delegates to this executive roundtable session. I am honored to take part in the Egypt: Forward Forum. Egypt is indeed open for business.

We have all seen the Arab Spring take flight. But now we must help the Arab Spring take root. The United States is working to ensure the revolution delivers on its promise, and we stand ready to support Egypt as it liberalizes not only its political system, but its economy as well.

I recently traveled to Tunisia and hosted a conversation with business leaders there. We discussed constraints, but we also discussed potential. In Egypt, as with Tunisia, the challenge is to undertake reforms to shed the legacies of the past that have stunted private sector growth – including making it easier to start a business, to invest, to settle disputes, and even to just be an employee. And to do so in an environment of budget deficits, a mismatch between the education system and employment opportunities, and a history of reliance on state-led solutions.

As the dust settles on the streets of Egypt, fears and old mindsets still linger, but a new private sector is emerging – one fueled by young entrepreneurs as well as large corporations.

For our part, the United States is working to strengthen the Egyptian private sector on several fronts. Let me give you 4 examples.

  • The Overseas Private Investment Corporation plans to create a 10-year loan guarantee facility in Egypt which could provide up to $700 million in loans to small and medium sized enterprises and support over 50,000 Egyptian jobs.
  • USAID plans to leverage existing partner microfinance networks, expertise, and infrastructure to help start up new businesses and increase the volume of trade among current enterprises.
  • The State Department’s Global Entrepreneurship Program is planning to help create angel investor networks by providing seed funding and technical support.
  • And, to engage multilateral partners in Egypt’s private sector development, Treasury and State are working to support Egypt’s request to reorient the European Bank for Reconstruction and Development (EBRD) so that it can play the same role today in supporting democratic transitions in the Middle East and North Africa that it played two decades ago in Central and Eastern Europe.

We realize, however, that the private sector cannot do it alone. It is vital that the Egyptian government play its part in ensuring that Egypt’s business climate is welcoming and empowering for business.

For example, the Secretary recently announced a new Domestic Finance for Development, or “DF4D” program. DF4D seeks to connect likeminded partners to explore how countries can better mobilize domestic resources, improve transparency and mitigate corruption as a means of holding governments more accountable. It is vital that we forge partnerships that ensure country ownership of the development process. We are depending upon business leaders such as you to give us the perspective, support and feedback necessary to ensure that these initiatives are legitimate and genuinely helpful for the economy.

This is just a snapshot, but I offer it to underscore our position: developing and strengthening the private sector is a principal component of our economic strategy for Egypt. A prosperous Egypt, supported by economic growth and a strong private sector, will be an anchor of stability for the region.

Egypt’s economic story did not begin on January 25, however. Over the last 50 years, Egypt has made great strides towards opening up its economy. What has changed is that Egypt has awakened to the potential of its population of men, women, and youth to drive Egypt’s growth, and reap its benefits. The government of Egypt and the international community must not underestimate the value of this human resource – a people that not only stand ready to work hard and innovate to grow their country, but who in fact demand the right to do it.

Of course, a resource must be valued and harnessed if it is to contribute to a country’s growth. This is where the government and the business community must work together and play their parts. The private sector will play a crucial role in generating employment and spurring growth to be sure. But there is another vital role for the private sector – one embodied in the spirit of our panel today: to participate in the open and constructive dialogues that will lay the policy foundations for prosperity – personal, business, and national – to be shared and sustainable.

It is my hope that our discussion today will be candid, insightful, and forward-looking. Knowledge transfer is not a one-way transaction and I think our panel today reflects that – we come from different countries, representing different sectors, and offering different experiences. Yet we all come together because we appreciate that this is a moment of tremendous opportunity for Egypt.

On that note, I would like to start off this conversation by asking my fellow panelists to consider the following question: what are the biggest opportunities and challenges that you see for business in the new Egypt?