The report is a discussion on Egypt’s current political influences on my business of exporting gypsum boards from Canada to Egypt. As can be learnt from Central Intelligence Agency website, Egypt has a republican form of Government that is guided through a new constitution affirmed most recently through a nation-wide referendum. The interim head of the Republic is currently President Adly MANSOUR following the Republic’s military ousting of Mohammed MURSI from the presidential helm in the mid of July 2013. On the same note, Prime Minister Hazem el-BEBLAWI holds the interim Government leadership position as the next elections schedule falls on 2014’s spring. As things are at present, the military has a huge stake in controlling the government of Egypt affairs and this has negatively affected the export business from a security perspective due to increased chaotic demonstrations from pressure groups that oppose the military.
Usage of tariffs, quotas and their effect on the export business
Egypt being a non-signatory to any free trade agreement means that my business of exporting gypsum board will have to incur tariff charges which increase the cost of doing business. However, there exist free trade zones in Nasr City, Alexandria, Ismailia, Suez and Port Said which provide advantageous business opportunities. No custom duty is to be paid on imports while operating in the free trade zones. Besides, business operations in these zones are exempt from exchange control regulations but are subjected to a one percent annual duty on the value of goods that enter or leave the free trade zones within a year.
Human rights abuses, child labor issues and gender issues
About human rights, child labor and gender issues, Hany Elshamy (25) explains that Egypt has received a lot of supports from USAID in promoting inequalities in gender especially in education, health and employment sectors. Besides, child labor has been alleviated through the Government contribution in efforts by USAID to enhance the participation of youths in the agribusiness by enhancing their enrollment in the agricultural schools that provide technical skills pertaining to agribusiness. However, this does not rule out the absence of unemployment in Egypt, and it should be noted that a high number of youths experience massive unemployment that contribute to their involvement in revolutionary activities against the government. The implication to doing business is that ready human capital will be available as the government has trained the youth in Egypt and issues of child labor will not arise as the same has been checked through Government collaborative initiatives.
Corruption and intellectual property rights issues
Corruption is widespread and intense and according to Corruption Perceptions Index from the Transparency International 2011, 2012 and 2013 surveys, Egypt continuously remains a highly corrupt destination with a consistent global score of 32 for the three periods
Legislation as pertains to intellectual property rights is still being contested and unreliable owing to political instabilities.
Goswami, Arti, Mattoo, and Sebastián (204) reveal that in the recent past dating back to the year 2008 Egypt provided an environment conducive to doing business. Besides that, it would be logical for any entrepreneur to expect an easy export business to Egypt due to it’s geographical strategic positioning in terms of the Red sea, the Mediterranean sea and the Suez Canal, but other factors recently came into play that make the situation not as easy as it would be expected. The current political instability makes business hard as regards the security of the commodity and increased security costs to engage private security to escort and secure the consignment. Moreover, the delay to dispatch consignments from the port has resulted into increased congestion at the port terminals making the situation worse in a clearance perspective and lengthening the turn over time for doing business. The political climate and associated relevant legislation, high affinity for bribery and illegal business dealings amongst the individuals in power would weigh down on efforts to export gypsum boards from Canada to Egypt. In the long run, the venture would turn out to be unsuccessful due to increased loss making.
Central Intelligence Agency (US) 2014 website;https://www.cia.gov/library/publications/the- world-factbook/geos/eg.html
Goswami, Arti G., Aaditya Mattoo, and Sebastián Sáez. Exporting services a developing country perspective. Washington, D.C: World Bank, 2012. Print.
Hany Elshamy. The Relationship between Unemployment and Output in Egypt. Original Reseach Article Procedia - Social and Behavioral Sciences, Volume 81, 28 June 2013, Pages 22-26