The value of investments attracted by Egypt during the year 2005 increased at 211 per cent to $ 1.3 billion against $ 408 million during 2004, apart from oil investments which rose by $ 1 billion to $ 2.6 billion; bringing total foreign direct investments to $ 3.9 billion.

In a seminar organized by Al-Ahram Regional Press Institute Minister of Investment, Mahmoud Mohieddin, attended by a number of bank chairmen and businessmen, stressed that Egypt's ability to attract investments could , with little effort and organization, rise three times its present level. He said that it is the responsibility of the government to achieve the goals of economic policy, to reduce unemployment and inflation rates and to realize development, while the private sector must lead the development process. He asserted that both sectors are self-complementary.

Mohieldin referred to the means by which the government seeks to address major problems facing the private sector in order to increase investments including the following as:

- Financing and providing credit: The minister pointed out that the Central Bank of Egypt (CBE) seeks to provide needed financing and credit, while the stock exchange is being used as a financing source. Market capital to gross domestic product ratio increased at 79 per cent, while existing instruments such as bond is being activated as a financing source.
- Lands necessary for investments: Mohieddin pointed out that price of land was reduced at 40 per cent, adding that President Hosni Mubarak issued a decree establishing the Industrialization Development Authority to develop industrial zones and provide lands with utilities for industrial purposes for such zones to be competitive.

- Dispute resolution and lengthy litigation time: The Minister of Investment said that the government will establish economic courts. The relevant law has been drafted and is being revised in preparation for submission to the new parliamentary session.

- Bureaucracy and corruption have been eliminated through the establishment of the General Authority for Investment and the activation of the one-shop system, which allow for the speedy processing of incorporation procedures.

Mohieddin added that among the means to eliminate bureaucracy and corruption is to draft simple and self-explanatory laws such the new tax law and to activate information technology systems by formulating a new information law, rules of disclosure, freedom of media and decentralized decision-making.

The minister confirmed that the privatization process is not governed by ideology but by the interest of Egypt, pointing out that the sale processes are conducted on the basis of specific standards, mainly on who- pays- more basis, for we are talking about a public property. The second standard is who can most protect workers and finally who has the best potential to manage projects successfully.

On his part, the chairman of the General Organization for Investment and Free Zones (GAFI) Dr. Ziyad Bahuddin stated that the enhanced mission of the GAFI is to turn Egypt into a magnet for domestic and foreign investments, in order to achieve economic development and raise employment rates. He added that its new role is to promote domestic and foreign investment in Egypt, to provide services for investors and improve the investment climate in Egypt.

Bahuddin pointed out that during 2004/05 the number of incorporated companies rose at 127 percent to 5981 against 2605 in 2003/04. He added that total issued capital rose at 82 per cent to L.E. 19.94 billion against L.E. 10.48 billion in the preceding year. He indicated that shareholding ratio of issued capital showed 81.5 percent for Egyptians, 11 per cent for Arabs and 7.5 per cent for foreigners. GAFI chairman indicated that foreign participation showed 63 per cent in domestic investment enterprises, 31 per cent in free zone enterprises and 6 per cent in enterprises under Law No. 159 of 1981. The breakdown showed that foreigners' interest was 61 per cent directed towards industry, 29 per cent to tourism and 7 per cent to financing and services.

The chairman made it clear that GAFI's plan for the coming period addresses means of supporting investors after incorporation and paying attention to the question of Arab investor's card. He added that GAFI has made good progress to this end through coordination with the ministries of interior and administrative development and also with banks and airports, particularly with regard to arrival and departure procedures.

He added that a new unit has been established aiming to monitor corporate performance in Egypt by conducting surveys and polls on obstacles to investment, particularly in certain sectors and industries and proposing means of dealing with them in cooperation with the Industrial Modernization Center such as textiles, food processing, pharmaceutical, car components and furniture industries.

He noted that the new unit is to study and propose non-tax incentives. The unit will also consider how GAFI can invest in stimulating the growth of promoted sectors. A draft unified companies law is being prepared. In light of the promulgation of the Income Tax Law, elimination of tax exemptions and the streamlining of incorporation procedures, time is now opportune for issuing a uniform companies law.