Interview: Ambassador David Thorne
How is the US assisting Egypt in developing a more sustainable and inclusive economy?
DAVID THORNE: Secretary Kerry entrusted me with promoting his “Shared Prosperity Agenda” which is premised on the belief that security, stability and prosperity are inexorably intertwined and envisions a greater role for economic diplomacy as a foreign policy tool. Given Egypt’s vital role in the region – it is its most populous nation and one of its largest and most diversified economies – the US is committed to supporting economic reform in the country.
The US provides Egypt with a substantial amount of aid. We recently created the Egyptian-American Enterprise Fund, which is $300m of US aid money that is going to be invested in the Egyptian economy by an independent private sector board, most of whose members are Egyptian or Egyptian-American. Since 2011, we have provided about $875m of general economic support funds. In 2015 we are also funding $150m of aid in our vocation and entrepreneurship programme. In April 2015 we created the US-Egypt Higher Education Initiative, which was funded with $250m and will provide 2000 underserved Egyptian students, particularly women, with opportunities to pursue studies in areas such as technology.
In what ways would US multinationals like to see the business climate improved?
THORNE: In general, making it easier for foreigners to invest by eliminating bureaucratic impediments is the central goal towards which Egypt needs to work. I know that many ministers, and President El Sisi in particular, are very focused on this area, which is a positive sign. More specifically, companies are awaiting clarification on the implementation of both the value-added tax and the investment law. There is also a fair amount of interest in the industrial zones being planned for the Suez Canal area but little information about how they will be developed. Companies have expressed concern about the current lack of liquidity in the foreign-exchange market and about how the government plans to tackle the issue going forward. From a macro standpoint, there are questions about how the government is planning to finance its deficit, whether through further aid from the Gulf or through assistance from international monetary What sectors offer the greatest opportunities for US companies that are looking to invest in the THORNE: Energy will remain a very important area of investment. GE has been very active in this space and will continue to be. Transport – specifically rail and road construction – and agriculture are also areas of opportunity. Recently, Blumberg Grain committed to building a significant amount of storage facilities for the country’s grain harvest, half of which currently goes to waste. Health care is another sector in which there is a fairly robust relationship between the two countries that can be expanded. The US government is doing a public investment in the eradication of Hepatitis C, of which Egypt has the highest incidence in the world. Gilead Science is also active in these efforts, and Varian is looking to become involved in oncology. IT is another sector in which we would like to see more investments by US companies.
To what extent has the Qualifying Industrial Zone (QIZ) programme been a success?
THORNE: QIZs are an excellent vehicle for Egyptian companies to access the US market. They cut business registration and licensing times by up to 60% and also facilitated nearly $1bn in Egyptian exports to the US and the creation of more than 280,000 local jobs in 2014. We would like to see the QIZs used more and believe that there is greater opportunity for increased trade through these means.
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