Want to understand how the US business community sees Egypt? Speak with these two gentlemen.
Khush Choksy and Greg Lebedev are both in Cairo with one of the largest US business delegations to visit the country post-revolution. Choksy is the US Chamber of Commerce’s Senior Vice President for Middle East and Turkey Affairs, while Lebedev is chairman of the Center for International Private Enterprise. They sat down with Enterprise to discuss the potential of the Egyptian economy and the US business community’s longstanding relationship with Egypt. Both men believe that Egypt is at a critical economic juncture that could make or break the country.
“I think the size of our delegation itself, more than 135 people, suggests optimism,” said Lebedev. “Right now the government has some very difficult but necessary decisions to make. If the reform process is managed correctly, it will be an important benchmark that will send positive signals to international investors.”
The US business delegation’s visit to Egypt comes days after the US Treasury announced that the Americans are working with other G7 countries to make sure that we close the USD 6 bn in third-party financing ahead the IMF wants before it closes the USD 12 bn extended-fund facility. Choksy and Lebedev said the timing of the visit has nothing to do with their government’s announcement, but they’re happy if this show of force is interpreted as a solid vote of confidence in Egypt — and the Ismail government’s reform agenda — ahead of the IMF agreement.
“The Chamber is of course very supportive of the IMF financing for Egypt, but we did not specifically time the visit to coincide with any particular announcement. We met with President El Sisi in September when he was in New York and there was genuine interest from both sides in making this visit happen,” said Choksy.
While admitting that US sentiment towards Egypt hasn’t always been positive during the past few years, Lebedev believes that Secretary of State John Kerry and his senior advisor, David Thorne, have been instrumental in taking the relationship forward in a constructive direction.
Added Lebedev: “We work with them on Egypt as well as other matters and they have done a tremendous job in sustaining the relationship through difficult times. Having said that, of course, there is no shortage of critics in Washington. There are segments of the think tank community who take issue with things that are happening in Egypt. I think it’s safe to say that they harbor a set of misconceptions about Egypt. As a result, we [the US] sometimes take positions that aren’t as wise or correct as they should be. On some areas, I’ll admit we are sometimes way off base because of a failure to understand the environment in which the President and the government of Egypt is operating.”
Choksy, however, points out that the American business community as a whole has always been largely supportive of Egypt.
“They are cognizant of the fact that President El Sisi brought security and stability to the country,” Choksy said. “Now the most difficult task ahead is coming to terms with the economic situation. We have extended an open invitation to the president to come and visit the American heartland. Our companies are not just headquartered in D.C. We also want Americans to know him because I think he’s more global than anyone gives him credit for.”
On political baggage, Lebedev notes: “As compelling as it was, the general public in America didn’t equate June 30th [2013] with an act of democracy. To me, there was nothing more poignant than a population whose country was literally abandoned. They had no recourse but to go out and demand change, but Americans get a little confused between democracy and governance. It’s one thing to get elected, but then if you abandon the trust, you can’t drape yourself on the mantel of democracy.”
According to both Lebedev and Choksy, one of the most common misconceptions about Egypt amongst Americans is that the country is an autocracy when, in fact, Egypt is dealing with a lot of similar issues as the US, including the war against terror.
“They are unaware of Egypt’s role in the region and they don’t have any appreciation of the economy that President El Sisi inherited. To step into those shoes, diagnose and solve the massive problems that Egypt has is no easy task. It will take you a while to do it but Egypt has a lot of smart people. No one really appreciates the magnitude of the economic turnaround that the government is currently attempting,” said Lebedev. “Most Americans don’t differentiate between Iraq, Iran, Syria — Egypt just gets thrown into that confusing geographic bucket.”
“Telling your story to the world is extremely important. I think Egypt could do a much better job at PR,” said Choksy. “Egypt is always playing defensive and answering to the NGO community when they should be using the business community more effectively to get their message across,” he adds.
Asked to discuss the main barriers to entry for American businesses, Choksy broke it down into very simple terms: “Ultimately businesses will go where they are welcome. US businesses — like businesses anywhere in the world — want an environment that is good for them. The IMF facility and managing the process that goes with it is going to be critical. You also need to have people within the government who can make decisions quickly and effectively. Removing those bottlenecks will make the economy grow much faster.”
Lebedev thinks it comes down to making the climate better for business regardless of which national anthem that business sings: “A healthy and growing domestic economy is one of the most attractive things for foreign investors because it bodes well for what they can achieve. So the government should start by looking at how they can facilitate things and create an enabling environment for their own private sector, which will have an indirect positive effect on attracting more FDI into the country.”