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Helal: Egypt needs to do its homework for economic revival - Part 2

Karim Helal, Board Member of CI Capital Holding, offers suggestive remarks and tips to help overcome Egypt’s economic and financial dilemma.
After carefully analyzing Egypt’s current economic and financial difficulties in the first part of the interview, Karim Helal – former Group CEO of CI Capital in Egypt and current Chairman of the Egyptian ASEAN Business Association – takes a look at how to attract investors, strengthen ties with Asia and support entrepreneurship in Egypt.

The first part of the interview can be found here:
Helal: Egypt is in a state of collective coma and economic suicide

For the sake of economic revival, Helal believes it important to encourage local and foreign investment in Egypt – but not in a blind manner. “Like President Mohammed Morsi said during his visit to China: There is no hope in Egypt without private sector, local investment and foreign investment. Yet, the key is to bring in productive investments that create economic value and jobs,” he explains.

To attract investors, Helal offered Egypt’s economic authorities four main tips:
1. Capital does not like ambiguity – and Egypt lacks clarity. The country needs to create a transparent, credible, legally secure environment for investors.
2. Egypt needs to stop acting like it is a privilege for foreign investors to pump their money into the country’s financial system.
3. One needs to primarily encourage local investors, because if they are not confident about investing their money in Egypt, foreigners will never even consider it.
4. Defining Egypt’s economic identity is crucial, in order to tell investors how to do business.

When talking about Asia, Helal conveys his passion and objective to narrow the gap between Egypt and the mentioned continent, in order to create a relative balance in the trade capacity of both areas. “There is a trade capacity of $9 billion between Egypt and China: $8 billion are going there, and only $1 billion is coming here. We need to find the service where we have a relative competitive advantage and focus on it in order to even out this imbalance,” he suggests.

Working on his goal, Helal is currently the Chairman of the Egyptian ASEAN Business Association, which aims at advancing the industrial, commercial, professional and public interests of the ASEAN-Egyptian business community, locally, nationally, and internationally. “We have become completely attuned to look West, in a political, social and economic sense. But we neglected two very important areas: Africa and Asia. Since 2008, the economic power shifted irreversibly from the West to the East, and Egypt is already late in jumping on the Asian bandwagon.” Helal started his project five years ago, bearing in mind that Asia had saturated its own market and can provide Egypt with a lot more than just consumer goods. The whole world is currently competing to gain and devour some of Asia’s knowledge, logistics and technology know-how and it is about time Egypt starts learning and stands tall for the taking.

Practically, Egypt needs to “do its homework” and shortlist what it can supply Asia with, while keeping an eye on specifications and quality during the manufacturing process. “Egypt needs to realize that Asia is a huge consumer-market and it also needs to attract the East to come manufacture here. Egypt’s geographical proximity advantage to Africa and the Gulf region is an irreplaceable asset,” Helal advises.

Besides building relationships with Asia, Helal believes in the active role of entrepreneurship in the cycle of Egypt’s economic stimulation. “Former Presidents Gamal Abdel Nasser’s and Mohamed Hosni Mubarak’s biggest crime was killing the youth’s ability to dream. If you kill my dream, you kill me. Egypt used to be full of entrepreneurs and all major brands today used to be young people who started with taking a chance at a minimum budget some years ago. This idea and motivation was systematically killed over the past 50 – 60 years.”

Helal further explains his point: “Nasser is one of the main reasons for that, as he destroyed agriculture through fragmentation, and then forced free education on the population, while guaranteeing a governmental position at the end of the educational journey. The road to hell is paved with good intentions – and these intentions were great, but the result was that nobody wanted to take a chance and everyone wanted to secure a good position without having to do too much dirty work.”

Even though it seems like the entrepreneurial sector is booming, one main problem remains: the lack of a stable support-system for entrepreneurs. Helal offers yet another solution: Social corporate responsibility. “Why don’t we try to get big companies to act as venture capitalists or angel investors, in order to feed the ideas of young entrepreneurs in each sector?” The answer lies with major multinational corporations.

Helal concludes his thoughts by saying: “Egyptians do not have work ethics and are victims of an appalling education-system – and this has been building up ever since 1952. The objectives and noble guidelines of the revolution have not materialized, which is not a big surprise in a historic context. Yet, we’ve been here for 7000 years – and we’re not going anywhere, for Egypt remains the Mother of the World.”