CAIRO: When US President Barack Obama came to Cairo to give a speech in June 2009, he announced that the United States would reorient the country’s policy toward the Middle East region.
Unlike his predecessor, Obama’s new policy ramped up support for the private sector as a driving force for economic, political and social change.
The Global Entrepreneurship Program (GEP), recently launched by the US embassy in Cairo, responds directly to Obama’s call last year to “identify how we can deepen ties between business leaders, foundations and social entrepreneurs in the United States and Muslim communities around the world.”
Egypt was selected to be the first GEP pilot country, because, an official at the US embassy said, with its significant population of 80 million, it is has a wealth of potential to be a force for change in the rest of the region.
“The US State Department examined research related to the business sectors of several countries and identified Egypt as being a key country that is poised for success in entrepreneurship,” he added.
A broad range of institutional and private sector organizations came together on June 21 under the umbrella of the GEP, which aims to provide impetus to the growing sector of SMEs in Egypt.
The program targets each element required for the success of SMEs, offering support in areas including training and mentoring, funds, as well as networking opportunities to promote their businesses.
Furthermore, it will focus on the whole “economic spectrum, including traditional industries such as food, agriculture and handicrafts; consumer products; service industries and tourism; computer and information-technology businesses; and social entrepreneurs,” indicated an official US embassy spokesperson.
Uniting the key players
A constellation of institutional, private sector and NGO organizations and individuals were assembled by the US embassy, and will work together towards creating a dynamic private sector through support to SMEs,
Each organization — which includes, to name but just a few of the 17 organizations that have signed on, the Ministry of Communications and Information Technology, USAID, the American University of Cairo, the Egyptian Junior Business Association, Amideast, the Middle East Council for Small Business & Entrepreneurship (MCSBE) — will play a disparate yet complementary role in supporting Egyptian entrepreneurs.
To raise awareness of the GEP’s goals, organizations that have access to large numbers of young, ambitious university students seeking to jump-start their own enterprise — such as the Egyptian Junior Business Association (EJB), a nonprofit organization that supports high impact entrepreneurs in emerging markets — have been brought into the fold.
EJB will expand their already existing programs aimed at raising the awareness of Egyptian university students about practical skills and business ethics.
“Through their capacity building programs in five major universities across Egypt, they have the potential to reach over 200,000 students,” said the official US embassy spokesperson.
Organizations such as Amideast, a private, nonprofit organization that strengthens mutual understanding and cooperation between Americans and the peoples of the Middle East and North Africa, will be tasked with identifying which SMEs in Egypt demonstrate strong potential to stimulate innovation and succeed, which in turn will allow the entrepreneurs to receive financial support and training.
Funding and training
The training individual entrepreneurs will receive, from organizations such as Endeavor, a non-profit organization that specializes in identifying and supporting promising entrepreneurs to drive economic growth in emerging markets, to acquire the necessary skills and knowledge to sustain and grow their business will vary in length from two-week “boot camps” to multi-month immersion programs.
“Entrepreneurs will be matched with mentors in the US, such as CEOs, CFOs and other entrepreneurs, and will either work with them directly in the US or over the phone,” explained Ahmad Ezzat, managing director of Endeavor.
Finally regarding financing, through its Mentor Capital Program, for example, “Endeavor will … help promote smart capital and encourage investing and venture capital formation in the Middle East,” indicated the official US embassy spokesperson.
Meanwhile, EJB will provide interest-free funds for ongoing projects and jump-start new projects needing less than LE 100,000 to move forward.
Also, USAID is entering into a new partnership with Silatech, a not-for profit social enterprise based in Qatar, to set up an investment fund to facilitate access to finance for micro-sized and SMEs in Egypt and elsewhere in the MENA region, indicated the official US spokesperson.
“The plan is for USAID to issue a credit guarantee to help attract private capital which will be invested in innovative start-ups, as well as existing businesses to help them scale up and become sustainable,” he said.
“While Silatech’s equity investment, along with the planned USAID guarantee and technical assistance, is expected to leverage $250 million in financing for entrepreneurs in countries with a significant Muslim population; upwards of $50 million will be designated for investment in Egypt,” he explained.
SME-friendly environment
While funding and training are instrumental in helping SMEs succeed, these efforts will be in vain if a supportive business-friendly environment is lacking.
Thus, changing the policy environment through government reforms that will target access to finance, regulatory costs and tackling legal disputes will be another GEP objective.
To ensure that this is realized, the official US spokesperson stated that the US Egyptian Business Leaders Forum (BLF) will be a leading organization in this effort.
It has already established a sub-committee to focus specifically on fostering government reforms, as well as holding a semi-annual roundtable for BLF members and Egyptian entrepreneurs to exchange ideas about the barriers and opportunities in the private sector and how to guide entrepreneurs to success, the spokesperson said.
According to Ahmed Eldaly, the chairman of the Entrepreneurship and Innovation Committee at the American Chamber of Commerce, an organization that focuses on coordinating the efforts the GEP participating organizations, asserted that the motivation to create such initiatives stems from the growing acknowledgement in Egypt of the important role the private sector has for improving citizens’ quality of life, as well as engendering greater political stability.
Affirming this view, Ahmed Naguib, managing director of advising and exchanges at Amideast, stated that it is crucial to have such programs and initiatives, because “they help stimulate growth, and by providing a good standard of living and keeping individuals engaged in society, many of the country’s social and economic problems will be solved.”
“It is also important to understand that the government struggles to provide some of the services that citizens require due to its lack of financial resources, and therefore by bestowing a larger role to the private sector, it is able to fill in this lacuna and meet citizens’ needs,” Naguib underscored.
