CAIRO: Germany, Egypt’s third largest bilateral donor, is looking to increase private sector cooperation in the country’s development policy toward Egypt, an official said.
Dirk Niebel, Germany’s minister for economic cooperation and development, called the new approach “a paradigm shift” in the country’s development policy.
A meeting Wednesday hosted by the German-Arab Chamber of Industry and Commerce (GACIC) was also attended by Michael Bock, Germany’s ambassador to Egypt; Werner Schnappauf, CEO of the Federation of German Industries; and Naguib Sawiris, CEO of Orascom Telecom and president of GACIC, as well as members of the German parliament.
In the ministry’s estimation, closer cooperation with the private sector would be beneficial to MENA countries, which Niebel’s new team established as one of the six main focus areas for Germany’s development policy, he said.
Currently, German development aid stands at €5 billion through both financial and technical assistance.
Also, Niebel indicated, removing structural deficiencies, such as trade barriers, trade distortion, and inefficient subsidies as well as opening up markets are vital, as he stressed that six times of all donor funds combined is lost to theses inefficiencies.
DPA reported that two agreements worth €102.8 million (around $129 million) were signed between Egypt and Germany: a €79 million agreement for technical cooperation in developing the irrigation sector and a program for primary education; the second to promote environmental and climate protection, private sector development and reform, management of water and women’s rights.
Trade Minister Rachid Mohamed Rachid met Niebel on Thursday to discuss cooperation between the two countries particularly in renewable energy, applications for the modernization of the food sector, and the modeling and prototyping of digital manufacturing.
Bilateral trade between Egypt and Germany fell slightly during 2009 due to the economic crisis, totaling €3.49 billion with Egyptian exports reaching €832 million and imports from Germany at €2.66 billion, according to the trade ministry.
Giving people freedom, responsibility and alleviating hardship is the aim of development policy, which parallels the goals of the private sector, he added.
The focus of German assistance to Egypt has shifted over the past several decades, the GACIC highlighted in a statement. During the 1980s and 90s funds were geared toward infrastructure and sustainable economic development, according to the GACIC, but now the aim is centered on securing water resources and addressing climate and environmental protection.
Egypt has set a target of producing 20 percent of its energy from renewable sources by 2020 and has undertaken projects, with the participation of the private sector and its German partners, to decentralize the water sector and rehabilitate as well as modernize irrigation and drainage infrastructure, GACIC explained.
With the support of German development funds, the establishment of a wind park in Zaafarana was realized, allowing 6 million Egyptians consumers to be reached and led to a reduction of 1.4 million tons of CO2 per year.
In Kafr El-Sheikh alone, 1.3 million Egyptians receive improved water supplies through decentralization and sanitation efforts, according to the GACIC.
Nielsen pointed out that still greater impact could be achieved with support from the private sector, noting a recent report in the Financial Times of Germany.
“Stock market funds in MENA countries have risen 20 percent since the beginning of the year alone,” indicating that the market potential for further growth has yet to be exhausted, and as such, more exports can be geared toward Europe, he said.
Sawiris spoke of Egyptian demands to be met in the context of development cooperation between the two countries.
Underscoring his appreciation for the education that he received from having attended a German school in Egypt, he called on his German audience members to build more schools. There are currently only seven in Egypt, one being the German University in Cairo.
Sawiris noted that although Egyptians “value German products,” they “expect more than just sales.” Potential sales service should be located in Egypt, rather than “expensive maintenance by traveling technicians.”
He lamented the low percentage of direct investments — only 1 percent originating from Germany — placing the onus on Germany to demonstrate whether it truly wants to be “interested in comprehensive cooperation.”
German investments in Egypt as of October 2009 totaled LE 1.87 billion mainly in iron, steel, chemical, automotive and communications sectors, according to the trade ministry.