Egypt’s Islamist leader vowed to carry out tough structural reforms to overhaul his country’s ailing economy and create a better environment for business and investment, participants in a meeting between corporate executives and the president said on Sunday.
The move by Mohammed Morsi, who hails from the Muslim Brotherhood, aimed to assuage fears that an Islamist-led economic program could dampen investment, particularly in tourism. Morsi vowed that Egypt would remain a secular state, said Ahmed Ghanim, head of biotech firm Bio Natural America Institute.
Ghanim and two U.S. officials in the meeting also confirmed that Morsi went beyond previous statements he has made about adhering to Egypt’s international accords, pledging outright to over 60 U.S. delegates present that he respects his country’s landmark peace treaty with Israel. Morsi’s Muslim Brotherhood has a decades-old enmity with neighboring Israel.
The face-to-face at Cairo’s presidential palace was organized to introduce companies, many of which already have billions of dollars invested in Egypt, to the new president, who was elected in June. It is part of a four-day mission to Egypt organized by the U.S. Chamber of Commerce. The 49 companies on the trip are looking to secure their investments and expand profits under the new leadership.
The meeting was also a chance for Morsi, Egypt’s first freely elected president and civilian to take office, to send reassuring messages that he views foreign investment as a key pillar for development and alleviating widespread poverty. The Brotherhood has always taken a strong private-sector philosophy, and many of its top figures and financiers are businessmen.
Deputy Secretary of State Thomas Nides, who was among a number of U.S. officials in the meeting, said Morsi laid out a broad vision for Egypt that was “wholesome” and “focused”.
“He was impressive and understands the challenges his country faces and understands the importance of Egypt on the world stage,” Nides said after the meeting.
Ghanim, an American-Egyptian who founded his business based in Royal Oak, Michigan, said he wants to transfer his technology to Egypt and help the country of 82 million find clean and innovative solutions to its agricultural woes.
Entrepreneurs such as Ghanim who are looking to bring their businesses to Egypt and large corporations already working in the country complain that under the previous regime of longtime U.S. ally Hosni Mubarak, a lack of transparency, bureaucratic red tape, rampant corruption and convoluted laws made opening or expanding a business extremely difficult.
He described Morsi’s words as “comforting” and said he was impressed that the president spoke of an “economic overhaul” and a “war on corruption”.
“The message he sent was that Egypt is open for business,” Ghanim said.
Little specifics have emerged however on how the economy of the Arab world’s most populous nation will be restructured. With no constitution in place or a parliament to pass laws, it is not clear if Morsi will implement urgently needed economic reforms in the coming months or wait until the end of the year when a new constitution and new parliament are likely to be in place.
Another delegate, whose company is weighing an expansion in Egypt, described Morsi’s declarations as optimistic but “non-committal” and “non-substantive.” The delegate wished to remain anonymous because she was not authorized to speak to media.
The U.S. trade delegation, which is the largest ever to the Middle East, includes U.S. corporations such as Apache, Boeing, Coca -Cola, ExxonMobil, Google, Oracle, PepsiCo and Microsoft.
Apache is the single largest corporate investor in Egypt. Chairman Steven Farris said it has invested 10 billion dollars since 1994 and that it employs nearly 4,000 Egyptians.
To assist Cairo, U.S. officials say they are negotiating a debt relief package. Washington has pledged relief for up to $1 billion of the $3.2 billion it is owed by Egypt.
The government is also seeking a $4.8 billion loan from the International Monetary Fund in hopes of cementing investor confidence. The negotiations for the loan include reducing a subsidies program which provides millions of Egyptians, including the rich, with low-cost gas and butane, for example.
Egyptian ministers have said that with or without the IMF loan the country will need to make some hard public spending cuts, including downsizing the number of government jobs. With around 6 million state employees, the government is the country’s largest employer. Experts say it can no longer cover the expense or create jobs for a burgeoning generation of youth under 25 years old.
Critics, however, worry that cutting subsidies will hurt the impoverished masses that rely on them, widening the gap between rich and poor and possibly creating fresh instability similar to last year’s mass protests.
Speaking before Morsi’s meeting, Prime Minister Hesham Kandil voiced support for market-friendly reforms. “The transition is not over,” he said, referring to Egypt’s situation since Mubarak’s ouster. “We need structural reforms.”
Addressing the U.S. trade delegation, he added that Egypt was “ready to move to a new frontier.”