Tuesday, February 23, 2021 3:00 p.m.
The U.S. – Egyptian Strategic Partnership and the Outlook for 2021
Thank you very much Sherif, good afternoon, everyone in the region and good morning to those of you who are joining us in the United States. A special thanks to Sherif and Sylvia for their warm introduction, and thanks also to Sylvia and the whole AmCham team for the hard work that goes into putting these events together, and to the Board and Members of AmCham for sustaining a vibrant partnership with the U.S. Embassy, even during these unusual times of virtual meetings.
For decades, AmCham has been the Embassy’s vital partner in boosting trade and investment between the United States and Egypt, and it’s always a privilege to have the chance to speak with you.
As many of you know, and as Sherif just alluded to, I’ve spent much of my career forging U.S. partnerships in the East Mediterranean for the United States, including in Italy, Greece, Cyprus, Turkey, the West Bank, and now in Egypt. And one of my highest priorities as ambassador here is to help U.S. companies secure business opportunities and overcome challenges.
Using diplomacy to bring people and companies together strengthens our government partnerships, fosters trade and investment, and builds the people-to-people ties that ensure lasting cooperation.
And that’s really my central message for you today:
The United States Embassy is your advocate and your resource, and is also here to link American and Egyptian companies, so that you can find and take advantage of new and expanding prospects, to build and invest in our economic future together.
A year ago, Sherif and Sylvia invited me to talk about this same topic, the U.S. – Egypt partnership and how we could work together to harness the tremendous opportunities that ahead of us.
I imagine many of you were in the audience on that day. And while so much has changed in our world since then, one thing has not: our abiding commitment to strengthen the U.S. – Egypt partnership.
The United States has provided longstanding assistance to Egypt’s military, economy, and cultural institutions, helping make the country more resilient through our security partnership, educational and cultural exchanges, and development work.
The U.S. government provides robust support for Egypt, both bilaterally and through multilateral institutions, and has invested over $80 billion in Egypt over the last 43 years. Our programs have helped to deliver clean water and electricity to millions of Egyptians, created thousands and thousands of jobs, conserved important archeological sites, and addressed many of Egypt’s most pressing public-health challenges, including during this current COVID pandemic.
Our cultural and educational programs have introduced thousands of young Egyptians each year to new ideas, and to new ways of seeing the world. We select hundreds of Egyptians annually for in-person and, now, virtual exchanges. And we conduct cultural, English language, and skill-building programs that reach thousands of Egyptian youth and professionals each year.
We have built more than 2,000 schools, trained over 100 thousand teachers, and provided more than $350 million in higher education scholarships and academic exchanges. And we have supported over 70,000 students at secondary and vocational schools so they can succeed in the labor force.
We are also committed to protecting Egypt’s rich cultural heritage, as illustrated by my team’s work to coordinate the return of over 5,000 papyrus fragments and artifacts only a few weeks ago.
The United States and Egypt have a great deal in common when it comes to our diplomatic engagement as well. On all the major regional issues today – from finding a political solution in Libya, to making progress toward Middle East peace, to working to find a solution to the GERD – the United States and Egypt share a commitment to forging diplomatic solutions that enhance regional stability.
Finally, our robust commercial and investments partnerships – about which I’ll say more in a few minutes – are, as I said, robust, resilient, large, and growing. And despite the shock from COVID-19, we expect them to keep doing so in the coming years.
So, regardless of what else may have changed over the past year, that commitment to building our shared prosperity and advancing our mutual interests remains.
As 2021 unfolds with new challenges and even greater opportunities, we look forward to working with our partners in the business community and the Egyptian government to make the most of them. But before we talk about those opportunities, I want to take a moment to reflect on what we have seen over the past year in Egypt.
While the whole world has grappled with the worst pandemic in a century, Egypt has weathered the crisis far better than most. The government’s economic reforms, those difficult policy choices President Sisi and Prime Minister Madbouly carried out to pull Egypt’s economy back from the brink of crisis between 2016 and 2019 — combined with the government’s ambitious Vision 2030 development plan and some well-considered programs in direct response to the pandemic, created the buffer that cushioned Egypt from the worst of COVID’s economic impacts.
Thanks in large part to those policies, Egypt is the only country in the region whose economy actually grew over the past year, despite the pandemic. Which translates into opportunities for U.S. businesses.
Recently, the IMF looked at Egypt’s strong fundamentals, and a government committed to reform, and predicted solid economic growth and recovery over this year and in the years ahead.
The major ratings agencies, Fitch, S&P, and Moody’s, all share this assessment. Investors are snapping up Egyptian bonds, including the region’s first-ever green bonds, issued last fall. Egypt lies at the juncture of three continents. It is a leader in Africa and the Middle East. It has a young, educated, talented, and growing population, with boundless energy and entrepreneurial spirit.
Egypt is investing in its economic future, by launching new transportation and infrastructure projects linking Egyptian cities and ports with global markets;
It is building 14 smart cities; It is investing in major upgrades to the country’s healthcare and education systems; and It is embarking on an ambitious program to replace hundreds of thousands of older cars with cleaner, more efficient vehicles.
Egypt is satisfying an ever larger portion of its energy needs with renewable, clean energy, as well as modernizing the oil and gas sectors. And the Egyptian government is doubling down on Egypt’s digital future, leveraging technology to bring government services closer to the people, to connect Egypt’s economy even more with the rest of the world with programs like “Egypt Makes Electronics,” and to build the workforce of tomorrow with the “Future Work is Digital” program.
We’re seeing considerable optimism about Egypt’s economy, and a great desire to tap into these opportunities. Here are some that are particularly exciting for U.S. firms:
At the end of November, Transportation Minister Kamel Al-Wazir told this same audience that his ministry alone had 31 major infrastructure projects ready to go, everything from cargo terminals, sea ports and dry ports to railways and subway lines.
And he urged American companies to submit bids on these projects worth a total of nearly 13 billion dollars.
Thirty-one chances for U.S. companies to help build Egypt’s future while helping U.S. business.
The story is similar in the ICT sector – which has been the fastest-growing sector of Egypt’s economy, growing at nearly 17 percent each of the last few years.
Egypt’s location at the nexus of Africa, the Middle East, Asia, and Europe, and its global connectivity to 18 major international data cable systems make it a very attractive market indeed, and I’m told that more connections, and faster speeds, are in the works.
But that’s just the hardware – it’s the people that really make it happen.
With half a million university graduates each year, including 50,000 in the ICT fields alone, Egypt has an energetic and growing talent pool.
Given these strengths and the government’s investments in training and infrastructure, it’s no surprise that global names like AT Kearney, Gartner, and IDC have ranked Egypt as one of the top business and IT services locations, not regionally, but globally.
Investments in Egypt’s ICT sector rose 35 percent over the past year, with startups alone raising over 100 million dollars in 2020, in areas like mobile payments, e-commerce, fintech, and health-tech.
And, as everyone is moving to the cloud, Egypt is strategically positioned to lead the African and Middle East data center markets, which are expected to grow by double digits over each of the next several years.
Another area ripe for investments, partnerships, and American ingenuity is education.
One example where the ICT and education sectors come together is the degree program between Ohio State University and the Ministry of Communications and Information Technology, designed to help Egyptian students and working professionals build capacity in critical cybersecurity skills needed in today’s digital economy.
More broadly, Egypt has the most extensive education system in the Middle East. And whether we’re talking about universities, secondary schools, or vocational schools, demand is strong and growing for more international linkages, more distance-learning options, and more private-sector investment.
In Cairo alone, demand for private K-12 education is expected to grow by more than a million students over the next decade.
The growing number of partnerships between American universities and Egyptian universities shows that we can work together to provide those students with cross-cultural skills, more globalized perspectives, and a world-class foundation for building their future.
Meeting the growing demand for healthcare services, and providing more options for those services, is another area we see with huge potential.
This sector is large, diverse, and growing, so whether we are talking about expanded healthcare services in general, or the digital transformation of the entire system, opportunities for investment abound.
The Medical City in the New Administrative Capital alone offers numerous opportunities for U.S. companies. As Egypt integrates ever closer with the rest of the African continent, major pharmaceutical companies are looking to Egypt as a platform for expansion and innovation.
And I can’t think of anyone better than our world-class companies to supply the medical devices that Egypt’s growing healthcare system needs. From telehealth services, to training programs to meet Egypt’s growing demand for skilled doctors and nurses, to building and managing the healthcare centers that will employ them – there’s plenty of room for U.S. businesses in this critical field.
Egypt also presents us with growing demand and attractive opportunities in agriculture. U.S. companies are already active in food and beverages, feedstock, and much more. And our agribusiness associations are working closely with local firms to share best practices.
There are opportunities to bring U.S. technology and know-how to increase yields and make farms more efficient, to maximize use of water resources, to improve supply and production chains, and to expand the quality and availability of food and beverages that Egypt’s growing population demands.
Despite the pandemic, U.S. agricultural exports to Egypt increased by a remarkable 23 percent in 2020, to nearly two billion dollars, led by soybeans, grains, dairy, and tree nuts. Meanwhile Egyptian agricultural exports to the United States also increased 22 percent during the same period, reaching a record high of $220 million.
We should also pay particular attention to the opportunities emerging in the renewables sector and from the Egyptian government’s ambitious “green agenda.” Egypt possesses an abundance of land, sunny weather, and strong winds, making it a prime location for renewable energy projects.
And as demand for goods and services in this robust and diverse economy increases, for healthcare, for education, for ICT, and for manufacturing, all of those areas are going to need more electricity to power Egypt’s future growth. Not to mention Egypt’s ambition of becoming a regional energy hub.
The Egyptian government recognizes that more and more of Egypt’s energy needs to come from renewable, sustainable sources. That’s why it plans to have more than 40 percent of the country’s electricity generated by renewables by 2035 and is considering even more aggressive targets.
That means a steady flow of new projects in power generation and transmission. And the government is putting serious money into energy efficient buildings, better management of critical water resources, and creating incentive programs for Egyptians to choose cleaner cars.
All of which means opportunities for cutting edge, innovative companies like many of yours. The renewable energy equipment market alone is potentially worth billions of dollars, not to mention the design, construction, and operation of power facilities, new water desalination plants, and recycling stations.
And by working together we can make sure that your companies are positioned to capitalize and to win contracts for some of these projects. To meet these opportunities head-on, I pledge to you that my team and I will work tirelessly with you and the Egyptian government to continue to improve the business climate. Like you, we believe that a strong and empowered private sector is the best way to generate jobs and deliver economic growth, development, and prosperity.
My team and I will continue our efforts to create and expand business opportunities between the United States and Egypt, and work with the Egyptian government to build an environment that attracts even more U.S. investment.
Every day, we advocate with the Government of Egypt to remove or reduce specific barriers and improve the overall business environment. We are helping companies develop attractive, responsive, and bankable proposals and advocating on your behalf to win lucrative contracts.
Egypt has undertaken a number of critical reforms in recent years, but important work remains. We want to help reduce red tape and barriers to international trade and enhance trade facilitation.
We aim to help Egypt improve its intellectual property rights system, so that innovation can thrive. And we want to work with you to ensure a level playing field for the private sector. I know your foreign competitors get help – at least advocacy, if not financing – from their governments. And this makes the Embassy’s support for you more important than ever.
And I look forward to your questions.