(Nikkei: March 1, 2016 – p. 11)
At their summit meeting on Feb. 29, Prime Minister Shinzo Abe and Egyptian President Abdel-Fattah el-Sisi agreed to strengthen economic cooperation. The two leaders issued a statement that welcomed Japanese corporate involvement in some 2 trillion yen worth of endeavors in Egypt. In his address at the National Diet prior to the summit meeting, the Egyptian president indicated high expectations for the participation of Japanese companies, saying “Egypt welcomes the contribution of Japanese investors in these projects.” Risks remain, however, for Japanese and other foreign firms.
At the summit meeting, the two national leaders agreed to promote the introduction of Japanese private companies’ advanced medical technologies, medical devices, and pharmaceuticals, in addition to electric power infrastructure. During the joint press conference held after the summit meeting, the Japanese prime minister said, “Egypt is the key to stability in the Middle East.” Egypt is on the front lines of the fight against terrorism, including confronting the extremist group Islamic State (IS). Supporting the Egyptian economy will enhance security. It is thought that it will also bolster the Abe administration’s growth strategy.
El-Sisi, the first Egyptian president to address the Japanese parliament, indicated he welcomes Japanese support. Japanese assistance will enable Egypt to catch up in infrastructure development, including enhancement of the Suez Canal and national roads.
For foreign companies, there are risks in entering Egypt. First among them is public safety. There are frequent terrorist bombings in the capital of Cairo. The nation’s restrictions on foreign currency are another major hindrance. Citing shortages in foreign currency and the need to monitor terrorist funding, not only does Egypt have restrictions on remittances to overseas but also on domestic remittances. Foreign companies must deal with these issues.