Investment in Egypt risky, says EU Commission official

European experts have warned of investment risks in Egypt, as the economy has been hit by numerous labor and political upheavals since the revolution began on 25 January.

“The risks of investing in Egypt have surpassed any possible returns,” said Gerhard Krause, head of the economic reform delegation of Cairo’s European Commission. “And it’s difficult to predict where the economy is heading.”

Krause also said that many European companies fear new leadership may be pressured into undoing Mubarak-era economic reforms due to increasing disappointment with the private sector.

Senator John Kerry, head of the US Senate Foreign Relations Committee, in a statement from Cairo on Sunday, said restoring security in Egypt is vital for attracting direct investment to the economy.

German Minister of Economy Philipp Rösler said at a conference in Cairo last week that foreign investment in Egypt is difficult in the absence of political stability. “For foreign investment to return, the country needs democratic institutions, human rights protections, rule of law and an effective administration,” he said.

The Egyptian Central Bank announced last month that foreign investment decreased by 20 percent, unemployment rose by 11.9 percent, and Egyptian stocks lost half their value in the first half of this fiscal year.

“Foreign investors need to be assured that economic legislation won’t change,” said economic expert Salama Fares. “Legislative security for investment is contingent on the nature of the next parliament,” he said, adding that it would be characterized by a fair representation of Egyptian society — unlike previous parliaments, which were dominated by business tycoons.

Translated from Al-Masry Al-Youm

Related Articles

Back to top button