Hello everyone. My greetings and thanks to the U.S. Chamber as well as the American Chamber of Commerce in Egypt for hosting today’s U.S.-Egypt Business Council. And I’d like to extend my greetings to all those here today who support the goals of the Doorknock Mission to foster strong bilateral and commercial ties between our two countries.
The true measure of any partnership – whether between friends or in the complex, multi-layered relationship between countries – comes in how closely they stay connected in difficult and challenging times.
As your former AmCham President – Taher Helmy – once said, those are exactly the times when you make the effort. Those are the times when you make contributions.
As we meet today, our relationship with Egypt couldn’t be a more compelling example, not only for how far we have come together – but in light of recent events – for the challenges we must now address, especially if we are to continue on a path that will bring Egyptians the future they deserve.
Let me just reiterate some of the elements that undergird our important relationship. Egypt is one of our most valued strategic partners in economic and military cooperation. It’s our third largest market for U.S. goods and services in the Middle East, and the U.S. is Egypt’s second largest source of foreign direct investment. We have important and abiding interests in Egypt – and seeing it become a stable, prosperous, democratic country.
In the Arab Spring, that relationship evolved in unprecedented ways. We supported Egyptians as they made clear their demands for dignity, justice, and political and economic opportunity. The stakes couldn’t have been higher: Egypt is the most populous Arab country, representing fully a quarter of the Arab world – with rising numbers of young people seeking economic opportunities, as well as political freedoms and cultural pride. Reinvigorating our ties so we could support those aspirations wasn’t an option. It was essential.
Egypt has undergone almost daily challenges ever since. But the stronger their challenges, the more resolute and committed we are to the partnership, as we continue to advance our strategic partnership and shared interests.
As you know, Secretary Kerry met with President al-Sisi and Foreign Minister Shoukry this past Sunday to discuss political and economic challenges in Egypt and key regional developments.
The Secretary joined the White House in condemning what he called the “chilling, draconian sentences” that the Cairo Criminal Court handed down to three Al Jazeera journalists and fifteen others June 23rd.
As the Secretary made clear, these verdicts not only “lacked many fundamental norms of due process,” but fly in the face of the essential role of civil society, a free press, and the real rule of law. That makes it difficult for Egypt’s economy to move forward – and to undertake economic reforms to encourage job creation, promote growth, and attract domestic and foreign investment. And it raises significant concerns about the future of U.S.-Egypt relations, especially domestically and with Congress.
The Secretary reaffirmed the United States’ strong commitment to our enduring relationship, and the need for the government to uphold all the essential components of a stable, strong, democratic and economically vibrant society, including universal rights and freedoms, an independent civil society, a free press, rule of law, and due process.
As the Secretary also said – and I quote – “There is no question that Egyptian society is stronger when all of its citizens have a say and a stake in its success.”
I bring these issues to your attention today because – as leaders in the business community – you know that growth and development, security, and stability are all inextricably linked. You are also keenly aware that Egypt faces a moment of high stakes as well as great opportunity. One of the greatest challenges confronting the Al-Sisi government is providing economic opportunities for the Egyptian people, especially the youth.
I’d like to first talk about the size and breadth of our support, which is extensive across the US Government – and then I’d like to talk about ways we seek your support and contributions.
The State Department – including my bureau, the Economics and Business Affairs Bureau – takes a leading role in building trade agreements and investments and promoting commercial ties globally.
We work to fight corruption and ensure a level playing field for U.S. exporters and businesses. We press for strong and effective regulations to protect copyrights, patents, and other intellectual property. And every day our Ambassadors and economic officers advocate for U.S. businesses and investors abroad. Through our Direct Line to Business program and our Business Information Database System, or BIDS, we provide market intelligence and other useful information to U.S. companies.
We are also deeply involved in two of the President’s initiatives: Our second SelectUSA investment summit to be held in March 2015, and the launch of NEI/NEXT – an update to the 2010 National Export Initiative – which Commerce Secretary Penny Pritzker announced last month. These efforts are directed globally, to countries that include Egypt.
But on a more country-specific level, Egypt is a critical partner in pursuing our shared security interests, including: countering transnational threats of terrorism and weapons trafficking, and maintaining regional stability on a range of fronts, foremost among them peace with Israel. We firmly believe a stable, prosperous, democratic Egypt will be the best partner in these interests. As President Obama said in his May 28 address at West Point, “…support for human rights and democracy goes beyond idealism – it is a matter of national security.”
With our economic assistance to Egypt, we are seeking to demonstrate a USG commitment to achieving prosperity and improving the lives of the Egyptian people. We are striving to sharpen that commitment, by focusing on key issues such as higher education, private sector growth, and long term establishment of democratic institutions. The Egyptian-American Enterprise Fund, which Secretary Kerry launched last March, is a major initiative to help expand and grow small and medium enterprises and spur job creation.
Through the Overseas Private Investment Corporation (OPIC), the U.S. Government is providing more than $400 million in financing and insurance in Egypt. This supports companies that work in transportation, finance, high-tech, energy, construction, and franchising.
We are also encouraging Egypt to further promote and maximize existing opportunities in the Qualifying Industrial Zones – or QIZs. This allows factories to diversify and expand – and create more jobs. QIZ exports account for more than half of Egypt’s exports to the U.S. And they support 280,000 jobs at last count – more than half of which go to women. So this is a tide that is lifting all boats, and well worth expanding.
If you want to support aspiring entrepreneurs, eliminating barriers to starting a new business is vital. So, through USAID, we are working with local business chambers and government counterparts to establish “one-stop shops” that streamline the procedures for launching new businesses and licensing.
The good news is, there are so many things in place – not only in the structure of support available for Egypt, but also in the country’s great potential with an affordable labor market, infrastructure networks from telecommunications to ports, natural resources, and entrepreneurial spirit. These capabilities must be supported and harnessed to help put Egypt’s economy on a more sustainable footing.
But for all our support, the United States, its various regional and multilateral partners, as well as the work of organizations like yours, we can never be more than exactly one half of the equation.
The other half, of course, is the Egyptian government. And we are calling upon them to put together the steps needed to create a democratic society with inclusive and equitable economic growth. We are calling on the government to protect the fundamental right of peaceful political dissent. And we have long encouraged the Egyptian government to begin undertaking credible and sustainable economic reforms to help stabilize and grow the economy by expanding the private sector, attracting investment, and spurring job creation, especially for the youth.
Since the January 2011 revolution, Egypt has faced rising economic pressures, including high expenditures, particularly subsidy costs, which are causing fiscal deficits to rise. External imbalances are also and increasing putting pressure on foreign currency reserves, and low economic growth has been exacerbated by disruptions in manufacturing and tourism.
The United States remains committed to supporting Egypt’s economic recovery and the government of Egypt’s efforts to create jobs and economic opportunities for the Egyptian people. We continue to encourage Egypt to take advantage of the breathing room provided by external assistance to implement its economic reform agenda, particularly on rolling out tax and subsidy reform measures. Making progress on these reforms will help put the Egyptian economy on a sustainable path, which will help enhance political and social stability and help promote inclusive, equitable growth for the Egyptian people.
The United States also stands ready to work with you as the business leaders of our two countries to strengthen the business climate, from removing impediments to foreign investment to streamlining regulatory procedures to expand Egypt’s private sector. All of which is essential to help Egypt get back to higher economic growth rates and create jobs for the Egyptian people.
We also stand ready to work with the business community and the Egyptian government to support assistance as well as technical and policy advice from international financial institutions and partners.
As Egypt’s largest bilateral trading partner, our commitment to Egypt’s economy remains strong. Our Chamber of Commerce has announced a large business mission to Egypt November 9-11, and there is strong interest by American firms. We want to work with you to help Egypt further promote and maximize existing opportunities in the Qualifying Industrial Zones (QIZs), specifically to diversify QIZ exports, expand the number of Egyptian factories exporting to the United States, and create thousands of additional jobs for Egyptians.
And we ask for your help in encouraging the new government to prioritize conclusion of three pending trade agreements – a trade facilitation agreement, investment principles, and information and communication technology (ICT) principles. Progress on Egypt’s overall economic and business indicators will help us enhance our trade relationship further. And we seek the help and efforts of the business community to expand trade ties between our two countries – and create jobs in both countries. That is why the DoorKnock Mission this week and the Business Mission to Egypt in November are so essential.
So the message is: watch that space. There are hopeful signs. We know, for example, that the government has embarked on some reforms as proposed in the Cabinet’s FY 2014/2015 budget. Those reforms are now pending presidential approval. But if enacted, they would take decisive steps towards stabilizing and growing the economy by expanding the private sector, attracting investment, and spurring job creation.
We also understand that technical cooperation is ongoing with both the IMF and World Bank. We continue to encourage President al-Sisi and his new government to deepen engagement with these and other international financial institutions.
The stakes – as I said – are high. Every single day – Egyptians wake up and make daily decisions about their lives, based on what options they have. Their government’s political and economic policies are directly linked to those options and, therefore, what actions they will take – positive or negative.
We continue to see encouraging signs, such as the formation of the Middle East Commercial Center – or MECC – last February in Jordan. There was a real show of strength and purpose to the tune of more than 350 business leaders from nearly 20 countries. This is a positive development for supporting foreign investment and regional integration and we are excited about the fall Forum in Cairo when we will have a chance to build on that promise.
This is how it works. Whether we are talking about the construction of ancient pyramids or the building of modern democratic and inclusive societies and institutions, sustainable structures depend on interdependent elements, each one reinforcing the other. With Egypt, we are talking about democracy, economic growth and development, security, and stability.
And in this collective effort, let me say again how much we appreciate what you do. Your hard work and advocacy in Egypt, as well as the counsel you offer to the State Department, key leaders in the Administration, on Capitol Hill and in other policy circles, are all critical.
So I am delighted to join you today, and to hear your thoughts on the situation in Egypt now and how much more we might do to move things forward.
As you know, we join a long shared history of relations between our countries. May we continue to work hard and share ideas towards the goals that we share: creating jobs, building economies that will support investors and other businesses, and sharing prosperity everywhere.