We had lunch yesterday with some of the most plugged-in people we know. All are ‘household names’ in our community, and we threw in a couple of distinguished foreign guests for good measure. We’re still mulling the discussion, but a handful of random observations stick out in our minds this morning. We’d like to share them with you:

We’re not alone: One of our foreign guests is a guy who takes a fairly broad view of EM from his base in London. The other is a native Brit. They spoke at length about the need to phase-out subsidies, to fix crumbling infrastructure, to bring down high interest rates, redress the mismatch between what universities are graduating and the needs of the labor force — et cetera, et cetera, ad nauseum. They weren’t speaking of Egypt, but of the UK in the late 1970s and early 1980s.

We, as a nation and as a community of people doing business and investing here, too often lose the plot: We’re dealing with problems that others have tackled before, and we’re doing it with an overlay of national trauma from the events of 2011-2013. We’re doing the right things, but things haven’t gotten better overnight because they don’t get better overnight. Our guests were captains of industry and finance, and all agreed that however much they’re complaining about short-term challenges, (a) they’re optimistic in the long term, because we’re generally heading in the right direction and (b) we’re basically building the right infrastructure we need to continue growing the economy.

Unverified fact that would have made our hair stand on edge had we had hair: The cost of land is one of the biggest obstacles not just for developers, but for industry. The cost of land for an industrial project in the US can run as low as USD 10 a square meter (or just under EGP 180 / sqm). Here, the comparable figure is EGP 2k / sqm. Say you need 50k sqm as the base plot for a new plant or an expansion — that’s EGP 100 mn for the land, with no utilities at all, right out of the box.

The real fun starts toward the end of 2019, and the story is about “C&C”— consumers and capacity utilization. That’s around the time we should see wages catch up with the inflation of the past two years, unlocking the power of the 30% of our fellow citizens who account for 70% of consumer spending. That will help corporates start to make better use of their capacities, and as utilization gets closer to the magical 90% mark, they’ll start borrowing for capex — provided interest rates continue to come down. Keep in mind here the size of the opportunity: We’re talking about capex demand that’s been bottled up since the end of 2010. At the same time, exports will likely have reached their first tipping point, and our ambitions as a regional energy export hub will be bearing fruit (all of us are underplaying the impact of the energy self-sufficiency story).

The meltdown of Abraaj has set the region’s private equity industry back years, our guests agreed. The once high-flying EM private equity outfit built a brilliant distribution network, and the allocators in that net now feel burned on the asset class in this region. Some smart firms will craft a story that stands out, that breaks through the veil of suspicion that’s now descending on us — we’re hoping some of our readers are among them. (You know who you are, folks.)

We are a nation without a consistent, coherent, long-term tourism strategy: The chu-chu train at the Magic Kingdom (itself a mere fraction of Disney World) gets 50% as many tourists as all of Egypt, or about 3.7 mn passengers a year. As one of our favourite people noted: “A 2.5 km road encircles this place. Even you could jog around it in 15 minutes.”

More in this vein soon, but before we close: two pieces with relevance to our “Egypt as the region’s energy hub” thesis: Israel is about to ease drilling curbs to entice global majors into its next auction of offshore exploration licenses, spurred by its USD 15 bn export agreement with Egypt. At the same time, the Electricity Ministry has reportedly received a study that is among the keys to our bid to directly link our electricity grid with Europe’s.

And there’s lots more gas in the pipeline (pardon the pun)? That’s the insinuation coming out of the Oil Ministry — we have more in Speed Round, below.

Wall Street stocks rebounded slightly yesterday after witnessing their worst drop in over two months on Monday, the Financial Times reports. The S&P 500 gained 0.2% while Nasdaq rose 0.4%, thanks largely to a rebound in tech and energy stocks. Here at home, the EGX30 was down 1.6%. Global markets had tanked the day before in response to the escalating tension between the US and China which could herald a full-on trade war.

Tomorrow is MPC day: The central bank’s Monetary Policy Committee meets tomorrow to review interest rates. The consensus among analysts is that the central bank will leave rates on hold to help contain the shock of recent subsidy cuts. The prevailing wisdom is that inflation for June will come in at around 4%.