CAIRO: Amid the three-day flurry of handshaking, card trading and power lunching that defined the Confederation of Italian Industries trade tour to Egypt this week, the role of economic ties between two ancient nations in the modern economy took center stage. The intertwining of Egyptian and Italian cultures is legendary, from the exploits of Mark Antony and Cleopatra to the adoption of hundreds of Italian words into Egyptian Arabic. But modern ties have often fallen short of their historic glamour: Egypt was only the 21st in the confederation’s four-year-old series of trade excursions, coming after both Brazil and Kazakhstan.
A great lot of future success, in the confederation’s view, depends on thinking small.
Tours of the type concluded last week, mostly chances for small and medium-sized business owners to fasten deals with international partners, have occupied an increasingly central role in the confederation’s activity over the past four years, said Simone Palmarini, a spokesperson for the group.
The aim is to help small and medium-sized business owners make otherwise difficult connections by using the influence of high-level private and state officials. “The real heart of the thing, in Palmarini’s words, was the 1,000 or more meetings between Egyptian and Italian businesspeople that followed a chain of presentations and speeches yesterday morning.
“Fiat, ENI, Pirelli, have already been here. They don’t need this mission, said Luca Cordero di Montezemolo, president of the confederation and CEO of the Fiat Group. “For the small companies, this is crucial.
Fiat has a joint venture agreement with the state-controlled Nasr auto company, which makes Fiat-designed models. Until four years ago, such tours were sporadic, and mostly to developed economies, Palmarini said. The first delegation traveled to China with no more than 60 people, he said. Attendance has since spiked, with over 350 attending the Egyptian tour.
Firms hailed from fields as diverse as electronics and fishing, with many looking to profit from Egypt’s cheap labor and proximity to markets in the Middle East and Africa. One artichoke seller said he imports frozen artichokes from northern Egypt to Italy because energy and labor costs here make it cheaper than buying from Italian farms.
The privatization of Egyptian companies has lured a phalanx of foreign investors here over the past half-decade, Italians among them. Intesa Sanpaolo, an Italian firm, bought the Bank of Alexandria when the state sold it last year.
Montezemolo said Italian firms could buy further into the country’s public sector as Egypt continues to auction its state-owned groups. “We are studying in the next weeks where the areas for future privatization are, he said. “I think ports, I think logistics – we will see.
Italy is the second largest European investor in Egypt after the United Kingdom, according to a report published by Intesa Sanpaolo, adding about $1.6 billion here last year.
Italy’s largest import from Egypt is fuel, which comprises 44 percent of their total imports from here, though recent trends show this may change. Italian fuel purchases from Egypt dropped from ?1.25 billion to just above ?800 million from 2006 to 2007, according to the report. Goods such as machinery, appliances and medicine, have largely filled this gap, rising from ?591 million in 2006 to about ?679 million in 2007.
Egypt mostly buys machinery from Italy, with this segment constituting about half of its overall imports.
Small and medium-sized enterprises have long been considered vital, but overlooked catalysts for economic growth. In Egypt, the refusal of many small businesses to register formally with the state has frequently confounded authorities and record-keepers.
But Montezemolo said even the notoriously widespread informality in the Egyptian market does not worry him.
“Big companies no problem, because they have already identified partners. Everybody has partners. The small guys, I count on these face-to-face meetings, he said. “Of course, this is not a one-day shop. We have opened the windows, now we will have a big follow-up.
