Transcript Document 7132555

EGYPT
MIS680
Dr. Paul Licker
Jason Rhodes
Scott Leslie
Rodney Libby
Christina Muñoz
Tammy Morton
Egypt
Geography
75% Desert
2.8% arable land
Size of New Mexico
Controls Suez Canal
Strategic geographical location that makes it
a hub that can connect Europe, Asia, Africa
and the Mediterranean
Egypt
Population Density
Egypt
Population
76,117,421
Egypt
Life expectancy at birth
Female - 73 years
Male - 67.94 years
Total population - 70.41 years
Egypt
Language
Arabic is the official language
English is widely spoken in business
circles
Egypt
Natural Resources
petroleum, natural gas, iron ore,
phosphates, manganese, limestone, gypsum,
talc, asbestos, lead, zinc
Agricultural Products - cotton, rice, corn,
wheat, beans, fruits, vegetables; cattle, water
buffalo, sheep, goats
Egypt
History
Rich ancient history, most notably the pharaohs
The Arabs introduced Islam and the Arabic language in
the 7th century and ruled for the next six centuries
Following the completion of the Suez Canal in 1869,
Egypt became an important world transportation hub
connecting the Red Sea with the Mediterranean Sea.
Britain seized control of Egypt government in 1882
Gained partial independence from Britian in 1922 but
didn’t gain full independence until after World War II
Egyptian-Israeli peace treaty signed in 1979
Egypt
Politics - Present
Constitution written in 1971, amended in
1980
President is nominated by a 2/3 majority of
their People’s Assembly
People’s Assembly:
444 elected members
10 members assigned by the President
Egypt
Politics – Present, con’t.
Judiciary system has 4 levels from districts
up to Supreme Constitutional Court
Currently 17 active political parties- by law
they can’t be religiously affiliated
26 Governorates (states) run by
Presidential appointees
IT-led Development
Industrial
Policy
Environmental
Factors
Political, Social
and Economic
Environment
Education & Skills
Technology Policy
Infrastructure
IT Diffusion
IT Production
and Use
Industry
Structure
Indigenous vs. MNC R&D
Economic
Payoffs
Employment,
Productivity and
Economic Growth
Egypt
Education
57.7% literacy rate
•68.3% males
•46.0% females
8,000+ university graduates in IT
disciplines
600+ post graduates
250 PHD’s
Egypt
Economic Overview
In the 1990’s Egypt received massive
external debt relief through arrangements
with the IMF as a result of participation in the
Gulf War coalition.
In 2002, Economist magazine ranked Egypt
third among 25 emerging markets for
economic performance based on financial
and political stability.
Egypt’s steps over the last 10 years
towards a more market-oriented economy
has prompted increased foreign investment.
Egypt
Economic Overview
Increases in GDP over the last 5 yrs. Due to increases
oil & Suez Canal revenues
•$200 billion 1999
$294 billion 2003
Increases in GDP Per Capita over same time period
• $3,000 (1999)
$3,900 (2003)
• US $37,800 (2003)
Saudi Arabia $11,800 (2003)
Real GDP growth rate over the same period has
decreased by almost half from 5% in 1999 to 2.8% in
2003
Egypt
Economic Overview
2003 GINI Index - 34.4
US - 40.8
Brazil - 60.7
2000 estimates place 16.7% of population below the
poverty line
US - 12%
South Africa - 50%
2003 inflation was 4.3% compared to 21.1% in 1992
however it has steadily increased from 3.7% over the
last 5 years as a result of economic & financial
system reforms.
Egypt
Labor Force
Unemployment in 2003 was 9.9% (1.8 Million
people) down from 11.8% (1999)
Over the last 5 yrs. Egypt has experienced a
shift in the labor force from agriculture and
industry to the services sector
Egypt’s Labor Force by
Occupation
60%
50%
40%
Agriculture
Industry
Services
30%
20%
10%
0%
1999
2003
Exports
Egypt
Egypt’s primary exports: crude oil and petroleum
products, cotton, textiles, metal products, chemicals
In 2003 Egypt had $8.759 billion in exports
 Major export partners include: US 13.6%, Italy
12.4%, UK 8.1%, France 4.8%, Germany 4.7%, India
4.2%
US Exports 2003 - $714.5 billion
Saudi Arabia Exports 2003 - $86.53 billion
The development of an export market for natural
gas is considered a plus for future growth
Egypt
Imports
Egypt’s primary imports are machinery &
equipment, foodstuffs, chemical, wood
products & fuels.
In 2003 Egypt had $14.75 billion in imports
Major import partners include: US 13.4%,
Germany 7.3%, Italy 6.9%, France 6.5%,
China 4.7%, Saudi Arabia 4.2%
US Imports 2003 - $1.26 trillion
Saudi Arabia Imports 2003 - $30.38 billion
Egypt
Debt
 Total Public & Private external debt has
remained relatively stable over the last 5
years at approximately $30 billion USD.
Public Debt in 2003 was 101.8% of GDP
US - 62.4%
Saudi Arabia - 94.6%
China - 30.1%
Egypt
Economic Aid
Egypt Received $1.2 billion in 2001
This includes assistance from the World
Bank, the IMF, and other international
organizations and from individual nation
donors.
Egypt
Financial System
Mid 1970’s – open door policy allowed
foreign banks to operate in Egypt
1990’s banking sector was liberalized
• 49% limitation on foreign ownership of
domestic banks was lifted
•Competition between banks left to market
forces
•Banks were now allowed to determine
their own lending and deposit rates and
spreads
Egypt
Financial System cont.
Government no longer allowed to print
money to cover its fiscal deficit
The Central Bank of Egypt is the regulating
body responsible for setting banking
policies
The government continues to influence the
official exchange rate offered in banks
due to a black market for hard
currency.
Egypt
IT Planning
Presidential Decree 101/98 established the
Telecommunications Regulatory Authority to
supervise the setting of rates, monitor
quality and license new telecom services.
The Ministry of Communications was
established in October 1999 to support
telecom infrastructure development
Egypt
Communication and Information Technology
Plan proposed in 1999
Objectives:
create a vibrant and exportable CIT industry
support the development of a state-of-the-art
national telecom network;
increase employment opportunities;
build an information society;
develop and upgrade CIT systems to improve
standards of living and support competitiveness.
Egypt
IT Industry
The number of internet service providers
has jumped from 40 in 1999 to 267 in August
of 2004
Egypt has 775 government subsidized
internet cafes mostly located in Cairo and
Alexandria
Egypt
IT Training
The Information Technology Institute (ITI)
•Established by The Information and
Decision Support Center (IDSC) in 1993
Specialized Development Programs
•UNIX Administration/Development
•Java & Web Development
•LAN Administration
http://www.iti.gov.eg/
Egypt
IT Penetration
Due to free internet service launched in
2002, the number of internet users has
increased from 1.7 million users in 2002 to
3.6 million in 2004
Mobile phone subscriptions have risen
from 4.5 million in 2002 to 6.68 million in
2004
Egypt
Mobile Phone Subscribers
Egypt
Teledensity
13% of Egypt a land line, 9% cell phone, 5%
internet use
United States has 63% land line, 54% cell
phone, and 54% internet usage
Egypt
IT Investment
Egypt
Areas of IT Investment
Infrastructure
Public Data
Internet Services
Wireless and Mobile Networks
Egypt
Public-Private Partnership
The government is seeking a strong
partnership between the public and private
sector in building an information society.
Providing incentives that foster an
attractive climate for investors is a primary
focus.
Egypt feels it has created a deregulated
environment that promotes free competition.
Egypt
Investment-friendly laws
Streamline the process for international
companies to invest in Egypt
Provide foundation for licensing companies that
supply networks and services
Tax exemptions of 5 to 10 years are offered
Telcom Hotel and Pyramid Smart Village for
international call centers and regional internet
traffic hubs are established.
Egypt
Telcom Egypt
As part of a 3 year $1 billion project, Telcom
Egypt (TE) is seeking a strategic partner to
modernize Egypt’s infrastructure.
TE would like to find a private partner to
help deploy a fixed Wireless Local Loop
nationwide.
Egypt
Pyramid Smart Village
300 acres of land 20 minutes from
downtown Cairo (10 Km from Pyramids)
Land was donated by the government, all
other investment has been privately funded
by 51 shareholders.
The 51 shareholders are mostly companies
including Microsoft, Cannon, Hewlett
Packard plus many Egyptian IT companies.
Egypt
Residents of the Smart
Village:
Have a right to own their land and real
estate
Have the right to transfer funds out of
the country
Are held to no price controls or profit
ceilings
Have protection from nationalization
Egypt
Information Society
Initiative
Designed to combat the digital divide
through:
Subscription Free Internet- Offers internet
access without a monthly fee and at the cost
of a local phone call
PC for Every Home- Affordable computers
payed on installments with no collateral
required. 72,000 computers purchased in the
first two years of this plan.
Egypt
Information Society
Initiative
Broadband Initiative
Information Technology Clubs- Government
sponsored internet cafes in dense and
remote areas of Egypt aimed at familiarizing
people with computers
Egypt
E-Commerce
According to The Economist, In 2004 Egypt
ranks 51st out of 64 in terms of E-readiness. The
US ranked 6th & Saudi Arabia ranked 48th
www.ebusinessforum.com
Egypt
E-Commerce
E-commerce has been held back by low
computer literacy rates and penetration.
According to estimates from Pyramid
Research, there were about 14 computers
per 1,000 persons in 2001.
In addition, credit-card use is low--there are
about 450,000 credit cards in Egypt, held by
some 200,000 persons. Most are still
unwilling to trust using their credit cards on
the web.
Egypt
E-Commerce
There are now around 5,000 Egyptian
websites, but only 200-250 of them are ecommerce sites
B2B has generally proven more successful
because computer penetration is much
higher within the business community than
the general population.
Egypt
IT Industry Strengths &
Weaknesses
 Strengths: Strong government support and
plan
Weaknesses: Infrastructure is not
developed and industry is in its infancy
Opportunities: Stable country allowing
easy entry into the middle eastern market
Threats: Terrorism, exporting talent
Egypt
Country comparison – Saudi Arabia
 Selected for comparison based upon
geographic proximity, similarity in size,
religion and ethnic background
Saudi Arabia is an oil-based economy with
strong governmental controls over major
economic activities. Saudi Arabia has the
largest reserves of petroleum in the world.
Population
July 2004
Median Age
Languages
Ethnicity
Religion
Egypt
76,117,421
Total area 1 million
sq km
23.4 years
Arabic (official)
Saudi Arabia
25,795,938
Total area 1.9
mill. sq km
21.2 years
Arabic
99% Egyptian,
90% Arab
Bedouin & Berbers
10% AfroAsian
94% Muslim (Sunni) 100% Muslim
6% Coptic
Christian
Literacy Rate 57.7% over the age
15 can read & write
78.8% over the
age 15 can read
& write
Government
Monarchy
Republic
Legal System Based upon English
common law. Islamic
law & Napoleonic
codes. Judicial
review by Supreme
Court & Council of
State
Based on
Islamic law –
commercial
disputes
handled by
special
committees
Nationality
Saudi
Egyptian
GDP per capita
2003
Unemployment
Rate
2003
Labor Force
GDP Real Growth
Rate
Currency
Egypt
Saudi Arabia
USD $3,900
USD $11,800
9.9%
1.8 million
people
19 million
(2003)
2.8% (2003)
25%
1.6 million
people
6.43 million
(2003
5.3% (2003)
Egyptian Pound
Saudi Riyal
Rate of Inflation 4.3% (2003)
(consumer prices)
0.5% (2003)
GDP composition Agriculture 17% Agriculture
by Sector (2003) Industry 33%
4.7%
Industry
Services 50%
58.8%
Services
36.5%
Exports in US
dollars
Imports in US
dollars
$4.6 billion
(f.o.b)
$86.53 billion
(f.o.b)
$14.75 billion
(f.o.b.)
$30.38 billion
(f.o.b)
Egypt
Sample Egyptian
websites
 http://www.smart-villages.com
http://www.mcit.gov.eg
http://www.sis.gov.eg/
http://www.presidency.gov.eg/
http://www.ibm-e.com/
http://www.nbe.com.eg/English/index.htm