Egypt needs serious investment to grow

This week Herbert Smith, an international law firm, hosted a roundtable discussion on power and infrastructure opportunities in Egypt at the Intercontinental Hotel in Abu Dhabi.

The aim was to bring together project sponsors, government officials, and financiers to determine what opportunities might be available in the country.

Chairing the event was Karim Helal, who is a board member of CI Capital, an Egyptian investment bank, and the chairman of the Asean Egyptian Business Association. He describes himself as a "banker turned scuba-diver turned banker" because of his twin passions for finance and diving.

At 62, he has worked in the Gulf, the Far East, London and Cairo, where he is now based. He spoke to The Nationalafter the roundtable meeting on the need for and risks of long-term investing in Egypt.

Give us the background to Egyptian infrastructure investment?

Egypt has suffered under totalitarian regimes for 60 years, people say it's 30 years but in fact it started under Nasser. They always say the road to hell is paved with good intentions. With good intentions he made education free for everybody. But the problem is that it is not free, Egyptians pay more than 10 billion Egyptian pounds [Dh6.16bn] every year educating their children, and not really getting a proper education at that. Then graduates were guaranteed a government job creating huge disguised unemployment and effectively planting the seeds of the administrative corruption that we see today. Education, along with health care, ate [into] crucial areas that Egypt needs to seriously overhaul and that represent additional investment opportunities in the broader infra structure space with power, roads, ports etcetera, just think of an 80 million-plus population growing by 2 per cent a year.

But hasn't there been quite a lot of foreign investment over the years?

Yes there has, it's true, but the problem is that it didn't trickle down fast enough or wide enough in the sense that while the macro-economic indicators were showing positive and continuous growth, the average person in the street was feeling and getting poorer.