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MONEy AND POwER When real performance pays off Few Egyptians benefited from the upswing of the past few years. In their desperation, most of them did not feel responsible for their country. Mubarak‘s downfall offers some new chances – for German entrepreneurs too by Rainer Herret They demonstrated for 18 days. Hundreds of them were brutally killed, run over or shot to death. Now there is hope of a new, democratic Egypt. The army has agreed to make this wish come true. The young Facebook revolutionaries want far more than the resignation of their President. They are calling for a new system, an end to the old-boys network that stood for corruption and misuse of power, and an economic policy that ensures humane working conditions and appropriate remuneration. That list of demands earned the young protestors the support of the middle classes and eventually that of the working class and [peasant] farmers. Whoever governs on the Nile in future will have to face up to the challenges the old regime failed to address. Egypt was praised by the World Bank as the most reform-hungry land in the world. Entrepreneurial expertise within the government and a bold policy of liberalisation triggered growth rates of seven percent and attracted direct foreign investment. The reforms were designed to stimulate competition. The social goal of combining economic performance with social progress, however, was quite simply – or perhaps deliberately – forgotten. What emerged was predatory capitalism instead of a social market economy. The fruits of the reforms were reaped by a few entrepreneurs and politicians. Inflation of 14 percent is now decimating the purchasing power of the population. Over 80 percent of the around two million unemployed are under 29 years of age and the number of people working under miserable condi- 10 BusinessReport 1/2011 tions has steadily increased over the past few years. So it comes as no surprise that nobody felt responsible for the country. Dirt and decay dominated the streetscape. Now young people are beginning to clean up Tahrir Square. It was already apparent that rubbish was being collected during the demonstra- tions. The people have won back their country. Doing away with corruption and rewarding people for effort will strengthen democratic conditions, productivity and efficiency. Motivated young entrepreneurs now have the chance to prove themselves under fair market conditions. The agricultural industry in particular needs to be completely restructured and modernised. That would benefit some 40 percent of the population who have to survive on two dollars a day or less, and can be achieved without undue effort. Better cultivation methods to boost crop yields and modernisation of the hydraulic infrastructure offer a host of potential areas for German companies to become involved. Apart from stemming the mass migration to the cities, this strategy would also lower the current need for subsidies on imported foodstuffs of around USD 1.6 billion. Modernisation of industrial production facilities will generate an increased demand for energy- efficient technologies. If the outcome of the elections in September is a moderate, religiously tolerant government, the state of the economy will improve considerably from the fourth quarter of the year onward, because there is still plenty of growth potential. Mechanical engineering, the automotive sector, medical technology, ICT, the chemical industry, the electrical en- Dr. Rainer Herret is CEO of the German-Arab Chamber of Industry and Commerce in Cairo and witnessed the revolution that took place in Egypt in the month of February. Here seen standing left of a tank after joining the demonstrators in Tahrir Square. gineering and electronics industry as well as environmental technology are the growth sectors of the country. The position of the German government during the revolution was welcomed by the people of Egypt, and German companies can now benefit from that goodwill. Visitors to the country over the next few months can not only count on increased interest from their Egyptian business partners and customers – they can also demonstrate a sense of solidarity in this new beginning. picture: private
Success without borders! > Interdisciplinary > International > Competence integrated in a single source You are the main focus: we are one of the leading internationally operating consulting and accounting fi rms of German origin and support businesses from German speaking countries in their worldwide engagements. We are active in all the leading industrial nations with more than 3,000 professionals globally and provide customized solutions through interdisciplinary cooperation. We provide interdisciplinary and international services in the areas of: > Audit > Accounting > Tax > Legal PROFIL Certifi ed Public Accountants · Tax Consultants · Attorneys-at-Law · Business Consultants Foreign direct investment and international projects are the main focus of our activities in the Middle East. Our long established company philosophy prescribes that we treat each individual client as our peer and that advice is provided in the manner of entrepreneur to entrepreneur. Besides our locations in Abu Dhabi and Dubai we are represented through offi ces in Sharjah, Cairo, Manama, Doha, Kuwait-City and Jeddah. Your contact for UAE: Markus Schlüter Tel.: + 49 (9 11) 91 93 – 31 23 E-Mail: markus.schlueter@roedl.pro Joerg Gulden Tel.: + 49 (9 11) 91 93 – 30 50 E-Mail: joerg.gulden@roedl.pro www.roedl.com BusinessReport 1/2011 11
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