EGYPT

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EGYPT

• MIS680
• Dr. Paul Licker
• Jason Rhodes
• Scott Leslie
• Rodney Libby
• Christina Muñoz
• Tammy Morton

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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

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Egypt
Population Density

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Egypt
Population

• 76,117,421

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Egypt
Life expectancy at birth

• Female - 73 years
• Male - 67.94 years
• Total population - 70.41 years

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Egypt
Language

• Arabic is the official language
• English is widely spoken in business circles

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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

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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 didnt gain full independence until after
  World War II
• Egyptian-Israeli peace treaty signed in 1979

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Egypt
Politics - Present

• Constitution written in 1971, amended in 1980
• President is nominated by a 2/3 majority of their
  Peoples Assembly
• Peoples Assembly
• 444 elected members
• 10 members assigned by the President

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Egypt
Politics Present, cont.

• Judiciary system has 4 levels from districts up
  to Supreme Constitutional Court
• Currently 17 active political parties- by law
  they cant be religiously affiliated
• 26 Governorates (states) run by Presidential
  appointees

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IT-led Development
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Egypt
Education

• 57.7 literacy rate
• 68.3 males
• 46.0 females
• 8,000 university graduates in IT disciplines
• 600 post graduates
• 250 PHDs

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Egypt
Economic Overview

• In the 1990s 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.
• Egypts steps over the last 10 years towards a
  more market-oriented economy has prompted
  increased foreign investment.

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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

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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.

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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

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Egypts Labor Force by Occupation
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Egypt
Exports

• Egypts 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

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Egypt
Imports

• Egypts 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

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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

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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.

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Egypt
Financial System

• Mid 1970s open door policy allowed foreign
  banks to operate in Egypt
• 1990s 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

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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.

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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

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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.

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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

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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/

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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

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Egypt
Mobile Phone Subscribers
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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

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Egypt
IT Investment

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Egypt
Areas of IT Investment

• Infrastructure
• Public Data
• Internet Services
• Wireless and Mobile Networks

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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.

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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.

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Egypt
Telcom Egypt

• As part of a 3 year 1 billion project, Telcom
  Egypt (TE) is seeking a strategic partner to
  modernize Egypts infrastructure.
• TE would like to find a private partner to help
  deploy a fixed Wireless Local Loop nationwide.

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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.

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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

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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.

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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

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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

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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.

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Egypt
E-Commerce

• There are now around 5,000 Egyptian websites, but
  only 200-250 of them are e-commerce sites
• B2B has generally proven more successful because
  computer penetration is much higher within the
  business community than the general population.

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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

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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.

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Egypt Saudi Arabia
Population July 2004 76,117,421 Total area 1 million sq km 25,795,938 Total area 1.9 mill. sq km
Median Age 23.4 years 21.2 years
Languages Arabic (official) Arabic
Ethnicity 99 Egyptian, Bedouin Berbers 90 Arab 10 Afro-Asian
Religion 94 Muslim (Sunni) 6 Coptic Christian 100 Muslim
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Literacy Rate 57.7 over the age 15 can read write 78.8 over the age 15 can read write
Government Republic Monarchy
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 Egyptian Saudi
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Egypt Saudi Arabia
GDP per capita 2003 USD 3,900 USD 11,800
Unemployment Rate 2003 9.9 1.8 million people 25 1.6 million people
Labor Force 19 million (2003) 6.43 million (2003
GDP Real Growth Rate 2.8 (2003) 5.3 (2003)
Currency Egyptian Pound Saudi Riyal
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Rate of Inflation (consumer prices) 4.3 (2003) 0.5 (2003)
GDP composition by Sector (2003) Agriculture 17 Industry 33 Services 50 Agriculture 4.7 Industry 58.8 Services 36.5
Exports in US dollars Imports in US dollars 4.6 billion (f.o.b) 14.75 billion (f.o.b.) 86.53 billion (f.o.b) 30.38 billion (f.o.b)
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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