|
Originally published:
Oct-20-2011
View More Country Risk Reports
Official Name: Arab Republic of Egypt
Internet Domain: .eg
International Dialing Code: +20
Table of Contents
The Arab Republic of Egypt is located in Northern Africa. It is bordered by the Mediterranean Sea to the North, the Red Sea and the Gaza Strip to the East, Sudan to the South, and Libya to the West. Its land area extends into the Asian Sinai Peninsula. With a total land area of 1,001,450 sq. km., it is about the combined size of Texas and California.
Egypt is a Republic.
Executive Branch: following the resignation of President Mohamed Hosni Mubarak in February 2011, the Supreme Council of the Armed Forces, headed by Defense Minister Muhammad Hussein Tantawi, assumed control of the government.
- Chief of State: president (vacant); vice president (vacant)
- Head of Government: Prime Minister Essam Abdel Aziz Sharaf (since March 4, 2011)
Further information (updated on 9/8/2011) on current members of the executive branch can be found in a publication of the U.S. Central Intelligence Agency: Chiefs of State and Cabinet Members – Egypt.
Legislative Branch: on February 13, 2011 the ruling military council dissolved the parliament. New elections are planned for October.
- Advisory Council that functions mainly in a consultative role - 264 seats of which 176 members are elected by popular vote and 88 appointed by the president.
- People’s Assembly – 518 seats of which 508 members are elected by popular vote; 64 seats reserved for women and 10 appointed by the president
Judicial Branch: Supreme Constitutional Court
[back to Table of Contents]
Egypt has a mixed legal system based on Napoleonic civil law and Islamic Shariah religious law. It has accepted compulsory International Court of Justice (ICJ) jurisdiction with reservations.. (What does this mean?)
[back to Table of Contents]
-
A large number of household objects were invented or used by the ancient Egyptians including: locks and keys, combs, scissors, wigs, makeup, deodorants, toothbrushes and toothpaste. Egyptians believed cosmetics had healing power and were initially used by both men and women – not to enhance beauty – but to protect the skin from sunlight.
-
Egyptians were among the first people to invent writing, along with ink and paper.
-
The pyramids of Egypt are the last remaining ancient wonder of the world. They have been given ‘honorary status’ in the list of the new ‘Wonders of the World.’
-
Cairo is home to Africa’s only subway.
-
Egypt has produced four Nobel laureates, awarded prizes for peace, chemistry and literature.
-
Egyptians were the first to have a year consisting of 365 days divided into 12 months. They also invented clocks.
-
To commemorate the role Facebook played in the 2011 Egyptian revolution, an Egyptian father named his newborn daughter “Facebook”. Her full name is Facebook Jamal Ibrahim.
-
On average, only an inch of rain per year falls in Egypt.
-
The Sahara Desert was at one time lush grassland. Overgrazing and/or climate change in 8000 B.C. began to change the area to desert. Now it is the world’s largest “hot desert”, roughly the size of the United States of America. (Antarctica is considered the largest desert of any type.)
-
If the Great Pyramids were chopped into 12-inch cubes, there would be enough cubes to circle the moon almost three times.
[back to Table of Contents]
Egypt has a mixed economic system which includes a variety of private freedoms, combined with centralized economic planning and government regulation.
Predominately due to reduced growth in export-oriented sectors, GDP growth slowed to 4.6% in 2009. In 2010, government spending on infrastructure and public projects increased, and exports drove GDP growth to more than 5%. GDP growth in 2011, however, is unlikely to bounce back to pre-global financial recession levels.
The political transition, initiated by the resignation of President Moubarak on February 11, 2011, is expected to have a number of effects on the economy. Due to the decline in growth, and therefore revenues, budget deficits will most likely be higher than forecast for the financial years 2010/11 and 2011/12. Expenditures will be higher than expected. Income from sales taxes and customs duties will drop significantly, due to the unrest.
Although the Egyptian economy has entered into a cycle of progressive growth, its level of growth remains insufficient to maintain employment and reduce the share of population living below the poverty of line,
Leading Markets (2010): US 7.6%, Italy 7.3%, India 6.1%, Spain 5.4%, Saudi Arabia 5.4%, France 4.7%, Libya 4%
Leading Exports-commodities: crude oil and petroleum products, cotton, textiles, metal products, chemicals, processed food
Leading Suppliers (2010): US 11.8%, China 10.4%, Germany 6.5%, Italy 6.4%, Saudi Arabia 4.1%
Leading Imports-commodities: machinery and equipment, foodstuffs, chemicals, wood products, fuels
Top Industries: textiles, food processing, tourism, chemicals, pharmaceuticals, hydrocarbons, construction, cement, metals, light manufactures
Top Agricultural Products: cotton, rice, corn, wheat, beans, fruits, vegetables; cattle, water buffalo, sheep, goats
[back to Table of Contents]
| |
Egypt |
Israel |
Jordan |
Libya |
Saudi Arabia |
Sudan |
| Populations* (millions) |
82.1 |
7.5 |
6.5 |
6.6 |
26.1 |
45.0 |
| Population growth rate* (%) |
2.0 |
1.6 |
1.0 |
2.1 |
1.5 |
2.5 |
Age Structure* (%)
(15 to 64 years old) |
62.8 |
82.2 |
59.9 |
62.7 |
67.6 |
55.2 |
Age Structure* (%)
(65+ years old) |
4.5 |
10.1 |
4.8 |
4.6 |
3.0 |
2.7 |
| Literacy (%) |
71.4 |
97.1 |
89.9 |
82.6 |
78.8 |
61.1 |
| Unemployment Rate (%) |
9.0 |
6.7 |
12.5 |
30.0 |
10.8 |
18.7 |
| Inflation (%) |
11.1 |
2.7 |
5.0 |
2.5 |
5.4 |
13.1 |
| Population below proverty line (%) |
20.0 |
23.6 |
34.5 |
unknown |
unknown |
40.0 |
| GDP** (USD billions) |
497.8 |
219.4 |
34.5 |
90.6 |
622.0 |
100.0 |
| GDP real growth rate (%) |
5.1 |
4.6 |
3.1 |
4.2 |
3.7 |
5.1 |
| GDP per capita** (USD) |
6,200.0 |
29,800.0 |
5,400.0 |
14,000.0 |
24,200.0 |
2,300.0 |
| Public debt (% of GDP) |
79.9 |
74.5 |
63.2 |
3.3 |
17.1 |
92.6 |
| Exports (USD billions) |
25.0 |
55.8 |
7.3 |
46.3 |
237.9 |
10.3 |
| Imports (USD billions) |
51.5 |
57.9 |
13.0 |
24.7 |
88.4 |
9.2 |
| Reserves of foreign exchange and gold (USD billions) |
35.8 |
70.9 |
13.4 |
99.8 |
445.1 |
2.1 |
| Currency |
Pound
EGP |
New Shekel
ILS |
Dinar
JOD |
Dinar
LYD |
Riyal
SAR |
Pound
SDG |
| Exchange rates (per USD) 10/21/2011 |
6.0 |
3.6 |
0.7 |
1.2 |
3.7 |
2.7 |
| Exchange rates (per EUR) 10/21/2011 |
8.2 |
5.1 |
1.0 |
1.7 |
5.1 |
3.7 |
| Rating in 2010 Corruption Perceptions Index*** |
3.1 |
6.1 |
4.7 |
2.2 |
4.7 |
1.6 |
| Rating in 2011 Index of Economic Freedom**** |
59.1 |
68.5 |
68.9 |
38.6 |
66.2 |
n/a |
*July 2011 estimate
** PPP – Purchasing Power Parity
*** 2010 Corruption Index: 10=Very Clean; 0=Highly Corrupt
**** 2011 Index of Economic Freedom: 100-80=Free; 49.9-0-Repressed
Economic Data from CIA World Factbook
2010 Corruption Perceptions Index, Transparency International
2011 Index of Economic Freedom, Heritage Foundation
[back to Table of Contents]
For information on commercial law and debt collection in Egypt, see “Collecting Commercial Debt in Egypt”, an article by ABC-Amega’s correspondent attorney firm in Egypt.
Dispute Resolution
The Egyptian judicial system functions extremely slowly, and cases can remain in the system for several years. The U.S. Embassy recommends that U.S. companies include clauses specifying binding international arbitration of disputes in their commercial agreements.
Arbitral awards are made in the original currency of the transaction, via the competent court in Egypt, usually the Cairo Court of Appeals. A special order is required to challenge an arbitration award in an Egyptian court. To enforce judgments of foreign courts in Egypt, the party seeking to enforce the judgment must obtain an exequatur. To apply for an exequatur, the normal procedures for initiating a lawsuit in Egypt must be satisfied. Moreover, several other conditions must be satisfied, including ensuring reciprocity between the Egyptian and foreign country's courts and verifying the competence of the court rendering the judgment.
[back to Table of Contents]
Coface Country Rating: B
Coface Business Climate Rating: B – high risk
Political and economic uncertainties and an occasionally difficult business environment can affect corporate payment behavior. Corporate default probability is appreciable.
Ducroire Delcredere Political Risk: 4 – moderate risk
Ducroire Delcredere Commercial Risk: C
[back to Table of Contents]
Economic Freedom: Egypt’s economic freedom score is 59.1, making its economy the 96th freest in the 2011 Index of Economic Freedom. Egypt is ranked 11th out of 17 countries in the Middle East/North Africa region, and its overall score is just below the world and regional averages.
Market Access: Egypt’s trade regulations impose distinct barriers on foreigners. Foreigners may function as commercial agents, but are prohibited from acting as importers for trading purposes. A foreign company wishing to import for trading purpose must do so through an Egyptian importer.
A number of non-tariff barriers or bans continue in force to protect local producers. Mandatory quality-control standards make importing certain products into the Egyptian market difficult. Over 130 categories of imports are still subject to mandatory quality-control inspections, including foodstuffs, appliances, electrical products, and auto parts.
Regulatory System: The Egyptian government has made considerable effort to improve the transparency of government policy. The process has proven difficult and has faced strong resistance from entrenched bureaucratic interests. Significant obstacles continue to hinder private sector investment, including the often-arbitrary imposition of bureaucratic impediments and the length of time needed to resolve them.
Exchange Control: Egyptian law allows individuals and businesses to conduct all normal foreign exchange transactions, including establishing foreign exchange accounts and transferring foreign exchange in and out of Egypt. Authorized banks may provide the full range of foreign exchange transactions, including accepting deposits, executing transfers, and opening letters of credit. Foreign currency is available at banks and foreign exchange bureaus.
Corruption: The January 25th Revolution was a response to several grievances of the Egyptian people, one of which was pervasive corruption. The full repercussions of the revolution are still to be felt, but several former ministers from Mubarak's regime have been arrested. Prior to the revolution there was a key focus on market reforms and the establishment of free-trade and industrial zones. While Egypt has attracted an unprecedented amount of foreign direct investment and achieved high GDP growth in recent years, companies wishing to invest in the country should be aware that several sources identify pervasive corruption as a major obstacle to doing business. Observers agree that corruption in Egypt is pervasive and that the use of wasta ('mediation' or 'influence' in Arabic) is essential for doing business.
For more detailed information on these topics, visit the 2011 Investment Climate Statement – Egypt, of the U.S. Department of State.
[back to Table of Contents]
Islam is practiced by the majority of Egyptians and governs their personal, political, economic and legal lives.
Egyptians prefer to do business with those they know and respect, therefore expect to spend time cultivating a personal relationship before business is conducted. Who you know is more important than what you know, so it is important to network and develop a number of contacts.
Expect to be offered coffee or tea whenever you meet someone, as this demonstrates hospitality. Even if you do not take a sip, always accept the beverage. Declining the offer is viewed as rejecting the person.
You should demonstrate deference to the most senior person in the group, who will also be their spokesperson. This is a country where hierarchy and rank are very important.
More information on Business Protocol:
[back to Table of Contents]
American Chamber of Commerce in Egypt
Egypt: Economic and Political Outline
FITA (The Federation of International Trade Associations)
Egypt Information, US Arab Chamber of Commerce
Export.gov MIddle East/North Africa: Egypt
U.S. Government Export Portal
*****
Subscribe to the Credit-to-Cash Advisor
Monthly e-Newsletter -- It's Free
This information is provided by ABC-Amega Inc. Providing international receivable management and debt collection services for exporters to more than 200 countries including Egypt. For further information, contact info@abc-amega.com.
This report represents a compilation of information from a wide variety of reputable sources.
Comparative Economic Indicators: CIA World Factbook
Risk Assessment information: Coface Country Rating and Ducroire/Delcredere.
Exchange Rates: OANDA.com The Currency Site.
Other information is provided by sites including FITA.
|
