CERCLE DIPLOMATIQUE - issue 01/2016

Fine hotels
LE MONDE EGYPT
EGYPT & AUSTRIA
CERCLE
DIPLOMATIQUE
selected by
ECONOMIQUE et TOURISTIQUE INTERNATIONAL
can also be found in these exclusive hotels:
Dromedaries at Canyon
Beach in Dahab, Sinai.
Feluccas on the
Nile river in Aswan.
Enjoying the endless horizon
of the Red Sea, sailing the
Nile, shopping in a souk.
After five turbulent years – with the revolution of
the Arab Spring in early 2011, the violent removal of
President Mohamed Morsi, leader of the Muslim
Brotherhood, the following coup d‘etat and the election
of Abdel Fattah el-Sisi, former head of the Egyptian
Armed Forces, who was sworn into office as President
of Egypt on 8 June 2014 – the main issue is to
stabilise the economy. Egypt‘s population of some 90
million inhabitants is growing by about 2 million
each year with a majority under the age of 35, the
unemployment rate is close to 13 percent and almost
40 percent of the younger are without jobs.
To address these challenges of massive youth unemployment,
plus high internal and external debt,
low foreign exchange reserves, and a serious energy
crisis, President Sisi relies on three main pillars of
economic planning towards a path of sustained high
growth and low unemployment. First: Reforming the
generalised subsidy system and reducing the very
high fiscal deficit. Second: Launching a number of
megaprojects mainly related to energy and infrastructure
to spur growth and create employment.
And third: Generating foreign financing to fill an ongoing
large external financing gap.
According to an analysis by experts of the ”Atlantic
Council“, an intelligence group, ”actions on these
three fronts in late 2014 and early 2015 led to considerable
optimism that a corner was being turned in
Egypt’s economic fortunes, and that 2015 would be a
much better year.“ Indeed, growth in 2015 rose to 4.2
INFO:
General: egypt.travel
Diving: cdws.travel
percent, almost twice the rate of 2014. The subsidy
bill for the government fell sharply from 14.2 percent
(of GDP) in 2014 to 11,7 percent last year. And foreign
direct investment, which is the best indicator of
a country’s economic prospects, rose by 2 billion dollar
in 2015 above the 4.1 billion dollar figure in the
previous year. However, this was a far cry from the
peak of $13.2 billion inflows in 2008.
But the main disappointment in 2015 was the
country’s external accounts deficit, which increased
from 0.8 percent in 2014 to 3.7 percent of GDP in
2015. Exports stagnated and workers remittances
from overseas (in average some surprising 20 billion
dollar a year) and tourism receipts, having fallen to
only 6.1 billion dollar due to cancellations after the
downing of the Russian airliner, did not sufficiently
cover the trade account deficit of close to 28 billion
dollar. All this forced Egypt to tap the international
capital market by issuing Eurobonds worth 1.5 billion
dollar in mid-2015 and asking the World Bank for
another 3 billion dollar loan. Nevertheless the Egyptian
government for 2016 is projecting growth of
around 5 percent, while most other observers, including
the World Bank and the International Monetary
Fund, expect only a rate of 4 percent or less. ”There
doesn’t seem to be any particularly persuasive
evidence that 2016 will be much better than 2015“,
the Atlantic Council concludes.
So all hope is concentrated on the range of mega
projects, presented at a big ”Egypt Economic Development
Conference“ in 2015 to attract major foreign
direct investments. An official paper handed out
there states: ”As Egypt develops and innovates its
economy, it will only grow as a destination for international
investment. Today investors increasingly
view Egypt as a smart place to do business, not only
putting down payment on their own future, but reflecting
a strong confidence in a more prosperous
and stable tomorrow for the Egyptian people.“
However, in a sluggish world economy the desired
sums to achieve this goal seem to be more than
ambitious. In order to reach a 5 percent growth rate,
the Egyptian government has calculated, overall investments
of more that 53 billion dollar would be
needed, of which the state can only provide some 15
percent. Having this in mind, even President Sisi
seems to have recognised that it will take a while to
transform the economy, as he warned his people during
a recent speech that “…maybe a generation or
two will not reap the benefits of reform“.
PHOTOS: CHICUREL ARNAUD, B.RIEGER, GARDEL BERTRAND
PHOTOS: EUROMONEY/THE EARL OF GUILFORD, CHICUREL ARNAUD/HEMIS.FR
The legacy of Alois Negrelli
If there exists a household name from Austrian origin in Egypt – apart
from Arnold Schwarzenegger and Niki Lauda – then it is the one of the
Austrian engineer Alois Negrelli, who featured prominently in the
planning of the Suez Canal in the 1860s. With his visit to the inauguration
ceremony of ”Egypt‘s gift to the world“ on 17 November 1869, the
Austrian Emporer Franz Joseph I. then layed the grounds for subsequently
deepening economic ties between the two countries, with currently
around 600 Austrian companies engaged in business activities with
Egypt. ”Today Austria and Egypt enjoy excellent trade relations“, says
Martin Woller, Commercial Counsellor for Egypt. ”Austrian contributions
to Egyptian success stories are noteworthy to this day.“
Hidden Champions. Especially Austrian technology and know-how are
widely used in Egypt and can be found in many projects. However, these
vital components packed “inside” machineries or projects are often
delivered by ”Hidden Champions“ and therefore not known to the public.
Currently, Austrian experts are helping with the ”New Suez Canal“
project, by providing engineering services for the tunnels crossing the
Suez Canal. Important Austrian involvement and cooperation in Egyptian
projects include hydropower installations on the Nile, formwork and
facade solutions for the Egyptian Grand Museum, water treatment and
desalination plants to ensure drinking water supply for Egypt or even
four sided professional squash courts for one of Egypt’s favourite sports.
”Of course some of the famous brands are also well known to all
Egyptians“, Woller reports. ”Think only of jewellery or consumer goods
such as fruit juices, energy drinks, sweets and dairy products.“
Stable exports. Egyptian-Austrian trade is growing steadily. Austrian
purchases from Egypt increased during 2014 by 12 percent to over EUR
92 million. Austrian exports to Egypt remained stable 2014 at around
200 million Euros with significant increases in 2015, reaching an all-time
high some 230 million Euros.
The Peace Bridge over the
Suez Canal which links
Africa and Asia.
The sun, the pool, the relaxation – Egypt is
offering far more than a wide range of business
and investment opportunities.
Hotel de France Wien
General Manager
Michael Pohn
Schottenring 3
1010 Wien
Tel 43 1 31368-0
hoteldefrance.at
A member of Gerstner
Imperial Hotels & Residences
These select hotels offer
CERCLE DIPLOMATIQUE - ECONOMIQUE et TOURISTIQUE INTERNATIONAL
as a special service:
Almdorf Seinerzeit ● Hotel Altstadt Radisson Blu ● Hotel Astoria ● Astoria Relax & Spa-Hotel ● Hotel
Bristol A Luxury Collection Hotel Vienna ● Austria Trend Hotel Europa ● Fleming‘s Deluxe Hotel ●
Hotel de France ● Wien Hotel Goldener Hirsch ● A Luxury Collection Hotel Salzburg ● Gradonna****s
Mountain Resort ● Grand Hotel Wien ● Hilton Danube ● Hilton Vienna Plaza ● Hilton Vienna ● Hotel
Imperial A Luxury Collection ● Hotel Steigenberger Herrenhof ● Hotel Vienna ● Imperial Riding School
Renaissance Hotel Vienna ● Interalpen-Hotel Tyrol ● Kitzbühel Country Club ● Hotel Kitzhof Mountain
Design Resort ● Hotel Lamée ● Loisium Langenlois ● Loisium Südsteiermark ● Meliá Vienna ● Park Hyatt
Vienna ● Palais Coburg ● Palais Hansen Kempinski Vienna ● Austria Trend Hotel Park Royal Palace
Vienna ● Austria Trend Parkhotel Schönbrunn ● The Ritz-Carlton Vienna ● Sacher Salzburg ● Sacher
Wien ● Sans Souci Vienna ● Austria Trend Hotel Savoyen Vienna ● Schloss Fuschl A Luxury Collection
Resort & Spa ● The Guesthouse Vienna ● Austria Trend Hotel Schloss Lebenberg ● Sofitel Luxury Hotels
Vienna Stephansdom ● Stanglwirt ● Vienna Marriott Hotel ● Vila Vita Pannonia
Would you like to belong to these exclusive hotels?
If so, please contact us!
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ECONOMIQUE et TOURISTIQUE INTERNATIONAL
32
Cercle Diplomatique 1/2016