Remarks at a Reception Hosted by the American Chamber of Commerce of Egypt
Secretary of State
Curt, thank you very, very much. Good morning to everybody, and thank you all for being here. It’s wonderful to be here. I’m really happy to be back, particularly here, and – where the water is tantalizing and the sun is warm. I come from the land of seven-foot snow drifts right now – (laughter) – Massachusetts. As you’ve been watching, we’ve had unparalleled amount of snow.
I was thinking, as I was just listening to the introductory comments, watching the video, and looking at this unbelievable gathering here of businesspeople, all of whom have come here with an appropriate sense of possibilities, of enthusiasm and a belief in the possibilities of the future. And then I was thinking about some of the other challenges that we obviously face within the region, discussions that I’ve been having with respect to Iran and Daesh and Libya and Yemen and different challenges.
So I was reminded, actually, of a story of Winston Churchill, who came to America at one point after the war to receive an award for temperance – temperance means not drinking, not being excessive. And here in a predominantly Muslim region, I know you already got the message; you’ve adopted – that your beliefs with respect to that. But I have to tell you that Churchill was very funny about – he really did have a great sense of humor about it all.
And so when he was brought in to receive this reward, the person giving him the award looked at him and said, “You know, Sir Winston, we’ve actually discovered that you really do drink a little bit. In fact, we figured out that you had a little wine at lunch and then in the middle of the afternoon you have a small constitutional, and then in the evening again wine with dinner, and then of course you’d take your bath with a big glass of brandy. And we calculated that if we were to take all the alcohol you had imbibed in a lifetime and added up, it would come to a line right here in this room.” And he pointed so that to a line, it was about where the top of the white panels are there.
And Winston sat back in his chair in a very, very pronounced way. And he looked very deliberately at the line, and then he looked at the ceiling. And then he looked at the line, looked at the ceiling again, and he turned to the introducer and he said, “So far to go, so little time.” (Laughter and applause.)
So the – I couldn’t help but say to myself, time – time is the challenge here. A long way to go, but a lot happening. And we’re beginning to get up to that line in terms of the investments, the things that need to happen to restore confidence. So I want to talk about that just a little bit here this morning, I really do. But I want to thank Curt, first of all. Thank you, Curt, for what you do; thank you for what Coca-Cola does, and for the leadership on the U.S.-Asia Business Council, together with Apache and Exxon and others. I think those of you who know Coca-Cola as a company, probably the world’s most recognized corporate brand – it really is a model case of a company that thinks globally but acts locally. And it acts locally as a good corporate citizen, does a great deal to help not just build a company that’s making a profit, but rather that’s giving back to the community. And the reason $500 million investment of Coke here in Egypt’s going to pay huge dividends, I know, not just for Egypt’s future, but literally for stability and shared prosperity throughout the region. So I thank you, Curt, and I thank Coca-Cola; I thank our friend who is not here, Muhtar Kent, and others for their leadership of this.
Ladies and gentlemen, ministers, many of you my friends who I’ve met along this journey, it’s really a privilege to join you today to reinforce the close partnership between the makers of American foreign policy and the engineers of global prosperity. And by that, I mean, obviously, all of you. In America, we don’t believe – at least most of us don’t believe the vast majority of the government is the engine of job creation. It’s the private sector, it’s the innovators, it’s the entrepreneurs; it’s people who are willing to put their capital into an idea, and to let that idea blossom by virtue of its acceptance in the marketplace and all that that then brings in terms of jobs, prosperity, opportunity, education, the next generation doing better.
And I want to thank the U.S. Chamber of Commerce, and the American Chamber of Commerce in Egypt and the Egypt-U.S. Business Council for their belief in this formula and in the ability of the private sector to make an enormous difference. The fact is that the Chamber does a tremendous job, the businesses that are investing here, and I am grateful for the very capable team of American officials who have accompanied me here today. You heard a number of their names in the course of the introduction, but I just want to mention, first of all, Ambassador Steve Beecroft is one of America’s most skilled and capable diplomats. He was in Iraq, he helped us with the transition of the government there – he did a tremendous job, and many other folks – but he is now here in Egypt and we have extraordinary confidence in his ability to be helpful to all of you in this important collaboration between the public sector and the private sector.
In addition, Ambassador David Thorne, who’s already gotten much too much publicity this morning. But he spearheaded this economic effort, and we’re deeply grateful to him. He served previously as ambassador to Italy most recently, and a private businessman. Scott Nathan, who is my special representative for business affairs, who ran an important fund in Boston, has been an investor, a private investor, putting his capital on the line, making money for investors. He knows the bottom line, he understands spreadsheets, he understands opportunity, he knows how to evaluate it. And then, of course, Andy Baukol, the deputy assistant secretary of Treasury. We’re a team, together with our Commerce Department and those people engaged in our commercial affairs.
And our job is to encourage investment and help break down the barriers to the building of confidence that is essential for the movement of capital. We want to promote around the clock shared prosperity in Egypt and across the region, but particularly, I say, in Egypt. And we want to do that – (applause) – we want to do that. Why do I say “particularly?” Egypt has always had an extraordinary business corps. Egypt has great capacity. This is not something new. In addition, Egypt has always had a vibrant civil society. And it has been there for the hub of thinking, of progress, of energy, of direction in this region – not to mention the fact that it represents a quarter of the population of the Arab world. It has always, in my judgment, had the ability to demonstrate entrepreneurial energy. And prior to the first Tahrir Square, the economy was growing at 7 percent and rising.
I remember that very well, because I was here very, very shortly afterwards, and I was here before that. And I remember where we were before that moment of transformation. There is no reason whatsoever that with concerted effort and belief in the possibilities of the future they shouldn’t quickly get back to the 7 percent and then double it and get into the double digits. That’s not wishful thinking; that’s absolutely a choice staring us all in the face.
So the reason that we’re here is very, very clear. In the 21st century, a nation’s interests and wellbeing are advanced not just by and perhaps not even principally by troops and diplomats, but rather by entrepreneurs and executives, the forward-thinking companies. I believe that. That’s why, when I came to this job as Secretary of State, in the first days, even in my confirmation hearing, I said loudly and clearly – and I repeated again and again – economic policy is foreign policy, and foreign policy is economic policy. They are the same side of – two different sides of the same coin, my friends.
And in today’s world more than ever – much more than ever – we’re in a very different place than where we were at the end of World War II, when most economies of the developed world were destroyed. And one nation, obviously – ours – was in a position to be able to make choices and move. Frankly, to some degree, success was unavoidable. But the world has changed now with the fall of the Berlin Wall, with the changes in countries’ aspirations, with greater levels of education, with more and more people in touch with everybody all the time, every day, because of smart phones and mobile devices. Everybody has access to information and to aspirations and to possibilities. And more than ever, trade, innovation, investment are not just the principal engines of a strong economy; they’re the principal engines of a strong society. They build community and they provide the opportunity for people to be able to do so, and that’s not just in one place; that’s on every continent.
In today’s world, that translates – that kind of business activity and the recognition of global realities translates into not just economic growth, but it translates into stability, upward mobility for people, a better life, the opportunity to have an outlet for those aspirations that are raised by being in touch with everybody in the world and seeing what everybody else is doing.
So wisely channeled, the private sector engagement creates growth that is sustainable. And sustainability is critical in today’s world. It lifts living standards, it helps build bridges to communities that have for too long been left behind. It’s why I have always said that we must keep in mind this synergy – symbiosis, if you will – between the private sector and government today, if government today is doing its job properly.
And we live today in a world of unbelievably fast-rising expectations. But we also live in a world of stunning, increasing possibilities. In country after country, we also see there are huge numbers of unemployed young people. This is one of the countries where you have a massive number of people who are under the age of 35, perhaps 50 percent of the population under the age of 21, 40 percent under the age of 18. And so the responsibility to try to provide opportunity is even greater, and government needs to work even harder to make certain that that happens.
In Egypt, according to the World Bank, the youth unemployment rate is around 30 percent. But a lot of those young people have a combination – in some cases, education; in some cases, a cell phone and mobile device; in many cases, both – and they can communicate with people anywhere anytime, as you all know. And so frankly, that provides much greater demand. That’s why this business conference is really so important. Nobody defines the nature and extent of the opportunities more, frankly, than businesspeople themselves. And I think you are the best place to be able to actually build the future – together with the government, that has to help for a whole lot of reasons, and I’ll get into a couple of them in a minute. But to the extent that we can, my job in the State Department, President Obama’s commitment is to work with you in order to do everything that we can to help you to be able to move and control and shape this transformation that is staring us in the face.
Now, I can tell you we really do approach this challenge with confidence. No question in my mind that we can make it on this road. And there isn’t anyone here who I think doesn’t understand – yes, there are these level of challenges that I referred to in my comments about Churchill; of course there are. You see them everywhere – not just in the Middle East, by the way; they’re all over the world, these challenges. We face them, too. We’re still on our journey of transformation, always trying to do a little bit better. We understand that. And I come here with a great deal of humility about the size of these challenges and the constancy of them. But there isn’t anyone, I think, who doesn’t really believe – or you wouldn’t be here – that these challenges can be met and that the private sector can play a critical role in helping to do so.
This part of the world is blessed with a stunning amount of commercial potential. Recently, the foreign minister of the Emirates shared with me a study that the Emirates have done with respect to what would happen in this region if we actually could make peace between Palestinians and Israelis and how there would be just this unleashing of commercial activity and a sense of possibility and transformation. And I know that the American private sector is absolutely committed. I read the papers; I know how some people spread rumors and some people want to sow the seeds of doubt, but let me dispel them firmly today. The United States of America is eager, ready and willing to be a catalyst in Egypt’s economic development, and we respect the efforts that you are already making, and we want to help you grow them. (Applause.)
Last year, U.S. companies invested more than $2 billion here. I was sitting at the table a moment ago and was reminded that during all of this change that has been taking place, not one company left. We believe in these possibilities, and you’re engaged in nearly every single sector of the Egyptian economy, from energy to health to automobiles, food security, financial services, manufacturing – that’s what American companies are already investing in. Apache Corporation is Egypt’s largest oil producer. And since 2011, Microsoft has doubled its employment in the country and developed the so-called citizen’s portal, giving Egyptians access to more than 300 government services online. Nearly 30 percent of Egypt’s installed power capacity, 30 percent comes from General Electric. And American companies are top-flight corporate citizens, I assure you, bringing the best practices in transparency, innovation, technology transfer, and social responsibility.
Our team at the State Department absolutely understands – as I mentioned a little while ago – that capital needs confidence. And that confidence has to be earned. That’s why we’re working so hard with the Egyptian Government to help support their efforts to implement reforms. And President Sisi has engaged on a bold and critical path to implement reforms. He’s committed to restoring investor confidence in Egypt’s[i] future. He is taking steps to stabilize Egypt’s macro economy and improve the climate for doing business. He has launched a serious effort to phase in the costly – to phase out the costly energy subsidies. And he’s promising tax reform and new investment that aims – the new investment law, I think, that just actually passed in order to eliminate red tape for company registration and project licensing. These are big steps. They’re not all the steps; I understand that. Everybody understands how difficult this part of the road is. But we also know from experience that it’s a fragile process and it’s not going to be easy.
But to sustain it, it’s going to require all of your help and our help and our commitment. And I am not blind to the hurdles that stand in the way. But I want to emphasize: There is a path forward. It’s not as if there aren’t options, choices. And economists predict that the investment that we see in Egypt today could actually grow dramatically if each of these proposals are fully implemented and begin to take hold.
So first, more steps have to be taken in order to improve and sustain a welcoming investment climate. Now, I understand that the new investment law contains provisions to establish a one-stop shop for business registration. And that is something that we have been advocating and supporting for some time. It’s very difficult to come into anywhere, whatever country it is, and get run around from one ministry to another, no matter where you are, and wait month after month after month in order to try to get a decision and not get it. And that hurts investment, it scares investment, because capital needs to have a return, you need to get to work as fast as you can.
So the faster you get those decisions, which hopefully comes from a one-stop shop capacity, the easier you can move. And everybody knows that no country is immune to it. Wherever there is any kind of corruption in that process, that is a hurdle to the movement of capital and to the building of confidence. Of course, a solid bankruptcy piece of legislation is also a critical step that many investors tell us they want to see. And so we’re going to work with the Egyptian Government to try to streamline the decision-making as much as we humanly can affect it.
Second, intellectual property protections have to be strengthened. Better protection of trademarks and patents encourages innovation. It encourages investment, encourages job creation, and it will also shield the public from threats to safety and health from counterfeit goods or from things that haven’t been properly vetted. Strong intellectual property protections are really not a luxury in today’s global marketplace; they are essential to being able to build confidence and attract capital.
In addition, finally, entrepreneurs have got to be empowered to create jobs and grow their businesses. Egypt boasts a lot of very capable entrepreneurs; I’ve met many of them. Too many are still in the diaspora. They need to come back. And the confidence-building is critical to bringing them back. But people like Tanta Iqraaly, who has founded Recyclobekia, or – which recycles electronic waste – it’s a very smart idea; Mia Medhat, who founded Eventtos, which connects people throughout Cairo; the company Cairo Angels has invented – has invested, I think, in some eight startups just since 2012 alone.
But a lot more can clearly be done to unleash Egypt’s talent and investment, and I think all of you understand that. The government and the private sector need to work together to remove the barriers for entrepreneurs, and we pledge to work with you to help people to do that, to go from startup to maturity. And that includes making it easier to turn ideas into products and services that can transform the Egyptian economy.
We also understand that part of the essential ingredients of being able to innovate and being able to invest your capital freely and being able to do so with confidence and knowing that there is transparency and accountability – part of that is also having the freedom to exchange ideas, including when you disagree with your government. And the more inclusive and the more diverse and the more rules-based and accountable the political process is, the greater confidence the business community will have. We continue to talk about these imperatives with the Egyptian Government, and we look forward to seeing further progress in the fulfilment of the democratic aspirations of the people of Egypt.
Now, I know the reason that you’re here. It’s because every single one of you already sees and feels this promise of this great country, this country that has written so much history, been at the forefront of the development of so many of the things we take for granted in the world today, going back to the beginnings of civilization. I also know that many of you have voiced a need for greater transparency and accountability in the government’s engagement with the private sector. The Egypt Economic Development Conference – this conference is a significant step on the path to addressing that concern.
And let me emphasize: The United States, President Obama, myself – we are committed to working with you and with the government to address your concerns. Going forward, I promise you we’ll do everything we can to make it easier for you to create jobs, make it easier for you to build shared prosperity, while also contributing to a stronger and more fully positive relationship between the United States and Egypt. We will continue to work with Egypt, to bolster its economic reforms. We’re supporting the World Bank and the IMF efforts to provide technical expertise, which we know will also contribute to investor confidence. And we will continue to do our part in expanding opportunities for U.S. businesses in the Egyptian marketplace.
As leaders of some of America’s largest companies, those of you who are here, each of you really brings a unique perspective to this discussion and to these possibilities. We will be calling on every one of you in the days ahead. We will need the talent and commitment of everybody in this room, all the good ideas and all the commitment that comes from being on the front lines in order to realize the potential that is in front of us.
But let me just convince you of one simple thing: You can’t get – you can’t become the prisoners of a chicken-and-egg debate – which comes first, the chicken or the egg? If you sit there and say, “Well, I just want to wait a little longer to invest because I want to make sure that everything’s going to be quiet and run absolutely smoothly,” that may be the lack of the next job or the next opportunity that gives people the confidence to make sure the next opportunity comes. You have to make the decision to believe in Egypt as much as a lot of other people who are not Egyptian do. You have to commit to make certain that we’re attracting capital, that we’re investing in the future, because the more jobs that are created, the more people begin to see the movement towards that future, the more opportunities there are for those young people, the faster all the other things will be taken care of and the faster things will turn around.
So we need patience, we need focus, we need discipline, but above all, we need to believe in the future. And if we do, I’m absolutely confident of the role Egypt is going to play in helping to define that future. Thank you. (Applause.)
[i] Secretary meant to say Egypt, instead of Israel, as delivered.