Egyptians have witnessed rapid growth throughout their businesses and economy in recent years. But could the economic crisis and its subsequent impact on the country’s tourist industry set the nation back?
Egypt is a populous country covering more than one million km² and bordering the Gaza Strip, Israel, Sudan and Libya. Its capital is called Cairo, which means triumphant.
In the last 40 years Egypt has changed dramatically and economic conditions have steadily improved due to the adoption of more liberal economic policies. Furthermore, in recent years increasing revenues from tourism and a booming stock market have created greater wealth within the ancient North African country.
Since 1985, Egyptian Engineering Projects (Quality) has operated as an integrator in the audiovisual marketplace. Eman Attia, contract processing manager and a partner in the company, said changes the Government has made in the last three to five years had helped the industry.
“We used to spend maybe 35 per cent in customs on some equipment imports,†she recalled. “Now on these items we only spend about five per cent. The government is realising that high taxes and high customs are not a good answer to a growing industry like ours.â€
In addition to slashing customs, a new taxation law was implemented in 2005, decreasing corporate taxes from 40 to 20 per cent. The reforms and subsequent positive impact on the economy have generated great business opportunities - in the government, corporate and retail sectors - for integration companies like Quality.
“Recently we were involved on the renovations for the Shura Council,†said Attia. The 264-member council, which is the upper house of Parliament, was burnt down and had to be completely restored in one month. “We installed the interpretation system, the voting system, sound systems and audiovisuals,†added Attia.
Further installation opportunities are presenting themselves as the 2009 FIFA U-20 World Cup comes to Egypt in September and October. A massive renovation programme of stadiums in Cairo, Alexandria, Port Said and Ismailia has been embarked on with Quality benefiting from the investment.
“We are renovating stadiums in terms of audiovisual, sound and security systems. Many contracts are in the pipeline but for now we are working on four stadiums. Of course we have our eye on the Cairo stadium but that is not yet finalised and we don’t know if we will take the job. We are currently going through assessment,†Attia said, stressing that the system integration part of Quality’s business was doing very well.
Rather predictably in these troubled times, it’s not all good news in Egypt. “Retail has been affected and is now struggling,†commented Attia. “At the beginning of the year we started to notice the problems in retail. However, I don’t think Egypt is as affected by the global economic crisis as people think,†she noted. “Retail customers are holding onto their money because they are afraid of what might happen.
“Tourism is also struggling and will continue to struggle for while,†she continued. “I’m seeing less tourists coming into the country. I’m seeing closed bazaars. I’m seeing hotels that are putting on very low offers to attract Egyptian people to go to El Gouna and Sharm El Sheikh – it was never like this,†Attia lamented. “We always see the offers for the national holidays but not on normal days. Some of my friends who work in Sharm say it’s not the same – tourism has been really affected. I think the decline is firstly down to the economy and secondly down to security concerns. We have one big hotel project that is currently on hold until the budget is finalised. Otherwise we are not affected [by the slump in the tourism industry],†she added. “Most projects are going well. We are currently dealing with an order from the Four Seasons Hotel [Quality were originally involved in the project three years ago] for more equipment. They want security equipment and updates for software, amongst other requests. More hotels are ordering security to our benefit,†Attia concluded.
The Egyptian Government is still providing a steady income stream for integrators in the country. Quality works closely with its technical research department, the National Defence Council, the Airforce, the Army, the Presidency and Government Ministers. “Their spending is fairly unaffected,†said Attia. “Furthermore the budget for this year had already been allocated. We have a lot of Government projects in the pipeline that will cover us for the year ahead.
Education is becoming an increasingly important area for the audiovisual industry in Egypt. “In education they are using new educational techniques and audiovisual and presentation enhancements. Now most of the good schools are smart schools, with smart classrooms and control systems. We’ve installed projectors, screens and smartboards. Education is not affected by the crisis because people have started to realise that education is an asset – the Egyptians are happy to spend on this important area.â€
Talking of education, Attia explained the troubles Quality encounters when trying to find good employees. “The Egyptian education system trains engineers to be engineers only. It doesn’t prepare them have languages, communication skills, or public speaking skills. It’s more interested in academics than self-improvement or development for the student. So more often than not we get employees who are very good engineers but nothing else. Languages – zero, social skills – zero, communication skills – zero. It is hard to find good marketers or good sales people that have been well raised and well educated.â€
To combat the situation Quality tries to develop the missing skills as far as possible. “We offer training through our suppliers,†explained Attia. “We are agents for almost 60 companies and we invite them to come over because when you have young engineers it is very hard to get them visas to travel to Germany, the UK or the States. So we have training here. For example we have a sound academy with Dynacord or a system integration one with Extron or Crestron.â€
Attia explained how the company’s approach had changed in recent years to combat the skills problem she perceived in the industry. “Before we didn’t have a training concept. But, five years ago we started doing a lot of training for the equipment we install. It’s worked really well because we also have about 12 engineers with more than 20 years of experience. These engineers are also trainers, they train the younger ones and pass on their skills.â€
Whilst tourism looks like a declining market, it’s not going to be this way forever and it seems in the meantime the country is generating a varied range of opportunities in the government, corporate and education spheres. Egypt looks like it will live up to its capital’s name.