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Nearly 50 U.S. Companies to Visit Egypt in Show of Economic Support
By Tom Barkley
WASHINGTON--Executives from nearly 50 major U.S. companies will head to Egypt next week in a show of commitment to the economy's long-term stability, as part of a White House effort to support the country's democratic transition in the wake of last year's Arab Spring uprising.
The delegation of senior Obama administration and corporate officials comes at a pivotal time for the new government of Egyptian President Mohammed Morsi, who after consolidating political control is looking abroad for help to shore up an economy still struggling in the aftermath of Hosni Mubarak's overthrow. The business delegation includes regional heads of many of the biggest multinationals across a range of industries, such as Boeing Co. (BA), General Electric Co. (GE), Google Inc. (GOOG) and Citigroup Inc. (C).
The U.S. is pursuing a two-prong strategy to ensure Egypt gets the official assistance needed to stabilize its finances, as well as private-sector investment to support long-term growth, said Deputy Secretary of State Thomas Nides.
"There's a lot at stake in Egypt, and quite frankly from the U.S. government's perspective, a stable and growing and prosperous Egypt is in our national security interest," Mr. Nides said in an interview.
Although the Morsi administration is "young," he said it has shown that it is serious about stabilizing the financial situation by seeking a loan from the International Monetary Fund and committed to ensuring a strong economic foundation over the long term by helping to organize the U.S. business trip.
"Morsi will need over time to produce, and we want to be part of helping him produce a future that Egyptians can see," said Mr. Nides, who will be joined on the trip by Mike Froman, deputy national security adviser for international economic affairs at the White House, and officials from several other agencies.
Rather than being a typical trade mission that results in headlines about big-ticket sales deals, the goal is to present Mr. Morsi and his new cabinet with policy proposals on creating an attractive investment climate and to demonstrate a commitment to the country's economic development, said Lionel Johnson, vice president of Turkey, Middle East, and North Africa Affairs at the U.S. Chamber of Commerce, which helped organize the business delegation.
"The new government there has a pretty narrow window to begin delivering on the promise of democracy," said Mr. Johnson. "It's our purpose in trying to help them and show that our companies would like to be supportive of that process."
International assistance like the $4.8 billion credit under discussion with the IMF and the Obama administration's pledge to provide $1 billion are positive steps, but private-sector investment will be key to generating the type of job growth needed to ensure long-term stability, said Mr. Johnson.
Mr. Morsi, Egypt's first freely elected civilian leader and an Islamist, has also signaled a willingness to chart a course for the country beyond its traditional reliance on U.S. support. His first state trip abroad began this week with a visit to Beijing to seek Chinese investment, followed by a meeting earlier Thursday with Iranian President Mahmoud Ahmadinejad to renew long-severed ties with Tehran.
The Obama administration has said it is comfortable with the direction that the new government is taking, as well as its efforts to look broadly for help to shore up its economy.
Mr. Johnson acknowledged the competition from China for trade and investment, but said Egypt will need market-led growth to deliver on the promise of broadly shared development. China overtook the U.S. last year as Egypt's top trading partner, but the U.S. still ranks first in foreign direct investment.
Such long-term investment flows nearly dried up following last year's uprising, leading to a contraction of more than two-thirds to $2.2 billion in the fiscal year ended in June 2011.
Mr. Johnson said the business group hopes to show that with the right investment climate, Egypt's economy can turn around within a few quarters.
One of the hardest hit sectors has been tourism, one of the country's top sources of income. Egypt attracted about a third fewer tourists last year, and the sector has only started showing signs of recovery. Revenue from Marriott International Inc.'s (MAR) seven hotels in the country slid to $120 million last year from a peak of $200 million the year before, but they have moved higher so far this year.
Alex Kyriakidis, the head of Marriott's operations in the Middle East and Africa, said he will encourage Egyptian officials during the trip to build on the recent uptick in tourism by showing the world that the country is a safe place to visit.
"The new government seems to be giving the right messages regarding tourism," said Mr. Kyriakidis, with no indication that tourists will be treated any differently on the basis of religion or gender. "Assuming that's the case, I'm optimistic."
Write to Tom Barkley at tom.barkley@dowjones.com
Nearly 50 U.S. Companies to Visit Egypt in Show of Economic Support
US Embassy Cairo Twitter account.
US Embassy Cairo ‏@USEmbassyCairo
In 2 weeks, the largest ever American business delegation will visit #Egypt w/over 100 people frommore than 40 companies
By Tom Barkley
WASHINGTON--Executives from nearly 50 major U.S. companies will head to Egypt next week in a show of commitment to the economy's long-term stability, as part of a White House effort to support the country's democratic transition in the wake of last year's Arab Spring uprising.
The delegation of senior Obama administration and corporate officials comes at a pivotal time for the new government of Egyptian President Mohammed Morsi, who after consolidating political control is looking abroad for help to shore up an economy still struggling in the aftermath of Hosni Mubarak's overthrow. The business delegation includes regional heads of many of the biggest multinationals across a range of industries, such as Boeing Co. (BA), General Electric Co. (GE), Google Inc. (GOOG) and Citigroup Inc. (C).
The U.S. is pursuing a two-prong strategy to ensure Egypt gets the official assistance needed to stabilize its finances, as well as private-sector investment to support long-term growth, said Deputy Secretary of State Thomas Nides.
"There's a lot at stake in Egypt, and quite frankly from the U.S. government's perspective, a stable and growing and prosperous Egypt is in our national security interest," Mr. Nides said in an interview.
Although the Morsi administration is "young," he said it has shown that it is serious about stabilizing the financial situation by seeking a loan from the International Monetary Fund and committed to ensuring a strong economic foundation over the long term by helping to organize the U.S. business trip.
"Morsi will need over time to produce, and we want to be part of helping him produce a future that Egyptians can see," said Mr. Nides, who will be joined on the trip by Mike Froman, deputy national security adviser for international economic affairs at the White House, and officials from several other agencies.
Rather than being a typical trade mission that results in headlines about big-ticket sales deals, the goal is to present Mr. Morsi and his new cabinet with policy proposals on creating an attractive investment climate and to demonstrate a commitment to the country's economic development, said Lionel Johnson, vice president of Turkey, Middle East, and North Africa Affairs at the U.S. Chamber of Commerce, which helped organize the business delegation.
"The new government there has a pretty narrow window to begin delivering on the promise of democracy," said Mr. Johnson. "It's our purpose in trying to help them and show that our companies would like to be supportive of that process."
International assistance like the $4.8 billion credit under discussion with the IMF and the Obama administration's pledge to provide $1 billion are positive steps, but private-sector investment will be key to generating the type of job growth needed to ensure long-term stability, said Mr. Johnson.
Mr. Morsi, Egypt's first freely elected civilian leader and an Islamist, has also signaled a willingness to chart a course for the country beyond its traditional reliance on U.S. support. His first state trip abroad began this week with a visit to Beijing to seek Chinese investment, followed by a meeting earlier Thursday with Iranian President Mahmoud Ahmadinejad to renew long-severed ties with Tehran.
The Obama administration has said it is comfortable with the direction that the new government is taking, as well as its efforts to look broadly for help to shore up its economy.
Mr. Johnson acknowledged the competition from China for trade and investment, but said Egypt will need market-led growth to deliver on the promise of broadly shared development. China overtook the U.S. last year as Egypt's top trading partner, but the U.S. still ranks first in foreign direct investment.
Such long-term investment flows nearly dried up following last year's uprising, leading to a contraction of more than two-thirds to $2.2 billion in the fiscal year ended in June 2011.
Mr. Johnson said the business group hopes to show that with the right investment climate, Egypt's economy can turn around within a few quarters.
One of the hardest hit sectors has been tourism, one of the country's top sources of income. Egypt attracted about a third fewer tourists last year, and the sector has only started showing signs of recovery. Revenue from Marriott International Inc.'s (MAR) seven hotels in the country slid to $120 million last year from a peak of $200 million the year before, but they have moved higher so far this year.
Alex Kyriakidis, the head of Marriott's operations in the Middle East and Africa, said he will encourage Egyptian officials during the trip to build on the recent uptick in tourism by showing the world that the country is a safe place to visit.
"The new government seems to be giving the right messages regarding tourism," said Mr. Kyriakidis, with no indication that tourists will be treated any differently on the basis of religion or gender. "Assuming that's the case, I'm optimistic."
Write to Tom Barkley at tom.barkley@dowjones.com
Nearly 50 U.S. Companies to Visit Egypt in Show of Economic Support
US Embassy Cairo Twitter account.
US Embassy Cairo ‏@USEmbassyCairo
In 2 weeks, the largest ever American business delegation will visit #Egypt w/over 100 people frommore than 40 companies
