Turkish immune-to-coups investors to stay in Egypt
ANKARA/ISTANBUL - Anadolu Agency
Turkish businesspeople have begun to evaluate the potential impacts of the Egyptian army’s overthrow of the democratically elected President Mohamed Morsi on the already fragile region. AFP photoTurkish businesspeople have begun to evaluate the potential impacts of the Egyptian army’s overthrow of the democratically elected President Mohamed Morsi on the region, with an emphasis on how the latest developments in Egypt would affect the economic and trade relations between the two countries.
“Turkish people are immune to the coups as they experienced many, like the one in 1980. And we, as Turkish people, will continue to do business in Egypt,” Zuhal Mansfield, head of the Turkish-Egyptian Business Council, said yesterday.
“What Egypt has been experiencing now is a coup, and I believe the country will overcome the difficult process,” Mansfield added.
$2 billion FDI outflow to Egypt from Turkey
There are currently $2 billion worth of ongoing direct investments of Turkish companies in Egypt, creating 65,000 jobs, according to the official data compiled from the two countries’ economy ministries. And the trade volume reached $5.2 billion between the two countries by the beginning of this year, with the goal of reaching $7 billion by the end of the year.
Turkey has been ranked 28th in the list of the countries which most invest in Egypt right now, with Turkey’s investments being mainly in the construction and textile sectors, according to the data compiled from the ministries.
“There are very big direct investors in Egypt from everywhere in the world, and all of them continue their business operations, despite small interruptions in the distribution of goods in some of the Egyptian seaports,” Mansfield said.
Crisis management desks established
Turkish investors who do business in Egypt have already started to discuss the process. “We will get together with our members who run businesses in Egypt as soon as possible and discuss how to minimize the possible negative effects of the Egyptian crisis on our economic and trade relations,” said İbrahim Çağlar, head of the Istanbul Chamber of Commerce (ITO).
It has always been quite advantageous to do business in Egypt under normal conditions, as businesspersons could export their goods from Egypt to many African countries without paying any customs and even to the United States without any quota, according to Turkish businesspeople running businesses in Egypt. Moreover, energy and workforce costs were very low in the country, they said.
Since the fall of Hosni Mubarak in 2011, Egypt has experienced a dramatic fall in both FDI and tourism revenues, followed by a 60 percent drop in foreign exchange reserves, and a rapid devaluation of the Egyptian pound. For several months the International Monetary Fund and Egypt have been in negotiations for a $4.8 billion aid plan, but talks have slowed down due to political uncertainty.