29.11.2005 Country profile - Egypt Agnieszka Gwizdz Manuel Vasconcelos Ela Siudyla Andreas Schmidt Comparative International Management Country Profile

29.11.2005 Country profile - Egypt

Agnieszka GwizdzManuel Vasconcelos

Ela SiudylaAndreas Schmidt

Comparative International Management

Country Profile – Egypt




>> Team

Agnieszka Gwizdz (Poland)

Manuel Vasconcelos (Portugal)

Ela Siudyla (Poland)

Andreas Schmidt (Germany)




>> Impressions




>> Impressions




>> Impressions




>> Overview - Arab Republic of Egypt

1. Location: Northern Africa,bordering the Mediterranean Sea, between Libya and the Gaza Strip

2. Total area - 1,001,450 sq,

3. population: 77 million

4. Capital: Cairo

5. Nile – the father of rivers




1. 3200 B.C: beginings of unified kingdom

2. From 341 B.C.: Persians, Greeks, Romans, and Byzantines

3. 7th century: Arabs

4. 13th – 16th century : Mamluks

5. Till 19th century - allegiance to the Ottoman Empire, governmant controlled by UK since1882

6. 1922 – independence

>> History –ancient and modern Egypt




750 000 tourists monthly

13 000 hotel rooms only in Cairo

2.2 million people employed in

industry

11% of GDP

>> Tourism




>> Economy

1. Economy in numbers• GDP (purchasing power parity): $316.3 billion

• GDP - real growth rate: 4.5%

• GDP - per capita: - $4,200

• GDP - composition by sector: agriculture: 17.2%

industry: 33%, services: 49.8%

2. Oil – 50% of total exports

3. Other industries




1. Terrorisim

2. Overpopulation

3. Environment degaradation

4. Health care

>> Today’s problems of Egypt




>> Information about the culture

People

1. Modern Egyptians (Arabs, living in big cities like Cairo and Alexandria)

2. Bedouin Arabs (nomadic tribal peoples living in isolated oases)

3. Nubian peoples (living

along the Nile)





Population (2005)

77 mio. inhabitants

Growth rate: 1.78%

population explosion

habitable land area (only 4% of the country)





Religion

Official religion: Islam

About 90% of the population are Sunni Muslims

About 10% are Coptic Christians and others





Language

official language: Arabic

The Egyptian dialect is distinct from all others arabic coutries because of the dominance of the media (television, cinema, radio and music)

English and French widely understood by educated classes





Arts

ancient history, cosmopolitanism, strong Islamic traditions, modern pan-Arab political and intellectual history and relative freedom

cultural capital of Arab world





Media

capital of Middle Eastern communications

strong journalistic traditions and a relatively free press

largest publishing industry in the Arab world

newspapers are under governmental supervision





TV and Cinema

The Arab TV and cinema is dominated by the Egyptian film industry and its popular Arabic music

strong cinematic tradition since the 1930s

the only major motion picture industry




>> Advices for dealing with Egyptian

Doing business in Egypt

appointment appearance

coffee and small talk business card

communication mannerism

Egyptian agent gifts

meeting





Appointment Wait for your counterpart to initiate the greeting!

punctuality is not so much a priority but arrive on time!

Expect that your partnership will be late or an appointment will be canceled Standard practice is to keep foreign businesspeople waiting





Coffee and small talk

usually meetings start with coffee and small talk even if time is limited

sometimes the Egyptian businessman has time not limited

Be careful: The “coffee” conversation and drinks can take too much time and you will fail your other tasks





Communication with Egyptian

Speaking distance closer than in other parts of the world

Do not back up !!! in their perception you will be unfeeling person you will present your distance to them

Use simlpe words like “hello”, “please” or “thank you” you can expect to be

better respected





Egyptian agent

allow him to explain the major points of your business in Arabic

in a short meeting, a translation can be very useful

your points will be made much more concisely





Meeting

Business meetings are usually quite formal

You should expect…

interruptions by: phone calls, visits from your partnership’s family, friends

Fridays are off of meetings, it’s a Muslim holy day

The working week takes a place from Saturday to Wednesday





Meeting

You should expect…

Business schedule:In summer: 8 a.m. to 2 p.m. In winter: 9 a.m. to 1 p.m. and 5 p.m. to 7

p.m.

Different dates on paperwork - it should include the Gregorian (Western) and the Hijrah (Arabic) - make sure of it





Appearance – what Egyptian appreciate

Conservative dress, suit with tie Polished shoes Hair-style, beard well cared Visible jewellery – avoid wearing by men Modesty dress all the time – wearing by women

Even if it is extremely hot – most of the part of body should by coveredProfessional look it is important aspect





Business Cards

printed in English on one side and in Arabic on the reverse

It is polite to make a nice comment about it or make a question: “when are you available at your office?”





Mannerisms – what Egyptian appreciate

Call Egyptian by name Sit down with both feet on the floor – showing the bottom of shoes could be a signal of ignorance Keep your feet on floor till when Egyptian do not cross their legs when sitting Hand gestures are often considered rude Eye contact – look with honesty

Professional look it is important aspect





Mannerisms - Difference between women and men

Eye contact withmen - appreciatedwomen - too much intimate

- avoid any hint of intimacy

Welcome withmen - hug to express warm welcome

- hold a hand, means friendshipwomen - never expect that type of behavior





Mannerisms - Left hand

… is considered unclean

… should avoid gesturing

… is acceptable to use if you have to lift something heavy





Mannerisms - Right hand

Arabs greetingsmen shake each other’s hands, placing left hand on he right shoulder, exchanging kisses on each cheekKisses are acceptable between that same sex in public

Westernized Egyptian menshake hands with other menSome Egyptian men will shake a hands with Western women





Gifts

are old customs are expected in a business meeting should have some meaning

Bring souvenirs with you

Don`t use Flowers They are traditionally used at funerals and weddings

Make sure you give or receive gifts with right hand




>> Investing in Egypt

Economic history

1991: Association agreement signed with the EU. Beggining of

trade and economy liberalisation

Lack of deep economic reforms until 2003 limited foreignt

direct investment

2003/4: Several measures to attract investment:

- Customs reform - Privatizations

- Tax reform - Reduced energy subsidies





Incentives

5 to 20 years of fiscal advantages

Free trade zones and special economic

areas to encourage the creation of export hubs

39 industrial zones spread through the country

New legal framework concerning investment guarantees

(excluding any nationalisation or confiscation of assets)





Incentives

5% customs tax applied to imports of incoming

products/equipment required for the investment

Freedom to establish prices and repatriate profits

National companies opened to foreign investors

General Authority for Free Zones and Investment: provides

information and advice to local and foreign investors





Business Opportunities

Public works

1. Construction

2. Energy sector

3. Consulting and studies

Demographic development

1. Health system

2. Distribution sector





Business Opportunities

Tourism

1. Rich cultural heritage

2. Security problems

New technologies

Downstream of agricultural production

Privatisation programs





Finance and banking system

Progressive liberalisation has been taking place since 1991

Public sector remains in a dominant position

(8 banks under state-control)

Free floating of the egyptian pound against the dollar

Foreigners are allowed to have all the kinds of financial

companies





Transnational companies investing in Egypt recently





Weak points and threats

11th September and middle east terrorist attacks

created some fear on investors

Terrorist attacks on tourists made tourism decrease

Financial system still too controled by the state

Low GDP per capita and high unemployment rate





Weak points and threats

Language barriers

Weak private sector

Cultural differences

Different consumer habits

Communication problems





Strong points and opportunities

Low labor cost

New gas and oil reserves discovered

Strategic role in the region:

1.Cultural influence on the arab world

2.Geographical location

3.Large population




Main sources

“How to negotiate” Sergey Frank – Financial Times Gesteland, Richard – Cross-Cultural Business Behavior – Copenhagen Business School Press, 1999 Hofstede, Geert - Cultures and Organizations: Software of the Mind – McGraw-Hill, 1997 www.cia.gov/cia/publications/factbook/geos/eg.html www.arab.net/egypt/index.html www.hejleh.com/countries/egypt.html www.animaweb.org/pays_egypte_pourquoiinvestir_en.php




Thank you for your attention!

Documents

29.11.2005 Country profile - Egypt Agnieszka Gwizdz Manuel Vasconcelos Ela Siudyla Andreas Schmidt Comparative International Management Country Profile