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A

GLOBAL COUNTRY REPORT

ON

FINDINGS OF EGYPT

SUBMITED TO:

OXFORD SCHOOL OF MANAGEMENT, BALIYASAN

IN PARTIAL FULFILLMENT OF THE

REQUIREMENT OF THE AWARD FOR THE DEGREE OF

MASTER OF BUSINESS ASMINISTRATION

IN

GUJARAT TECHNOLOGICAL UNIVERSITY

GUIDED BY: SUBMITED BY:

PROF. PRAJAPATI MAHENDRA PATEL PARTH [11800592037]

PATEL MAYANK [118000592038]

PATEL JAIMIN [118000592039]

PRAJAPATI ARVIND [118000592040]

PRAJAPATI CHANDRESH [118000592041]

DESAI JITENDRA [118000592042]

Batch: 2010-12

OXFORD SCHOOL OF MANAGEMENT, BALIYASAN

MBA PROGRAMME III

Affiliated to Gujarat Technological University

Ahmadabad

Month, Year

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Students Declaration

We,MAYANK,JAIMIN,PARTH,ARVIND,CHANDERH,JITENDRA . hereby declare that

the report for Global/ Country Study Report entitled .EGYPET is a result of our own

work and our indebtedness to other work publications, references, if any, have been

duly acknowledged.

Place: .. (Signature)

Date: (Name of Student)

PARTH PATEL:

MAYANK PATEL:

JAIMIN PATEL:

ARVIND PRAJAPATI

CHANDRESH PRAJAPATI

JITENDRA DESAI

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Institutes Certificate

Certified that this Global /Country Study and Report Titled FINDING OF EYGEPT is

the bonfire work of Mr.PARTH,MAYANK,JAIMIN,ARVIND,CHANDRESH,JITENDRA ,

1180005321037/118000592038/118000592039/118000592040/118000592010/118000

592042 who carried out the research under my supervision. I also certify further, that to

the best of my knowledge the work reported herein does not form part of any other

project report or dissertation on the basis of which a degree or award was conferred on

an earlier occasion on this or any other candidate.

Signature of the Faculty Guide

(Name and Designation of Guide)

(Certificate is to be countersigned by the Director/HoD)

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PREFACE

We are living in the supersonic area. Today word becomes global village due to

globalization, economic development, and liberalization in the industrial area. So more

and more demand of able and practical manager won are able to solve the problem and

to face any kind challenges. Today industries demand an outstanding ability to lead.

Keeping this in mind schools of management has incorporated practical studies

important for the industrial requirements. Practical are vital for a management student

because he/she is going to control and to handle all the responsibilities as manager in

the future. And also, as a student, training is the great opportunity to apply theoretical

knowledge in the real life.

In the report I have focused on POLITICAL, ECONOMICAL, SOCIO CULTURE and

technological analysis and also made SWOT analysis on FINDINGS of EGYPT at

Africa. I have tried to include all essential information plus our survey results. This report

will be certainly beneficial to me.

I have tried to include all the important information in project report.

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ACKNOWLEDGEMENT

I am very much thankful to university and our HOD Mr. JAPANBHAI SHAH for

conducting a GCR report and providing such an opportunity to get practical knowledge.

I would also like to express many thank to our honorable HOD MR.JAPANBHAI

SHAH,OXFORD SCHOOL OF MANAGEMENT for giving me an opportunity to makeanalysis ofEGYPT COUNTRY .

I am also thankful to PRO.MAHENDRABHAI PRAJAPATI who gives us guidance as

well as methods regarding the GCR report.

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CONTENT

SR NO. PARTICULARS PAGE NO.

PREFACE I ACKNOWLEDGEMENT II

1. MAPS OF EGYPT 7

2. PEST ANALYSIS OF EGYPT 8

2.1 KEY FACTS ABOUT EGYPT 8

3. POLITICAL ENVIRONMENT 9

3.1 POLITICAL STRUCTURE 9

3.2 MAIN POLITICAL PARTIES 9

3.3 ENVIRONMENTAL LOW 9

3.4 FOREIGN TRADE 10

3.5 TAX RATE 10

3.6 WITHHOLDING TAX 10

3.7 CORPORATE TAX EXEMPTION AND DIDUCTION 11

3.8 TAXABLE INCOME 11

3.9 LABOUR FORCE 11

3.10 ECONOMIC ENVIRONMENT 11

4. ECONOMICAL ENVIRONMENT 12

4.1 EGYPT RISK ASSESSMENT 13

5. SOCIO CULTURE ENVIRONMENT 14

6. TECHNOLOGICAL ANALYSIS 15

7. EGYPTS SWOT ANLYSIS 16

8. FINDINGS 18

9. CONCLUSION 21

10. BILBIOGRAPHY 22

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MAPS OF EGYPT

Map of Egypt:

Flag of Egypt(1984present)

http://en.wikipedia.org/w/index.php?title=File:Flag_of_Egypt.svg&page=1http://en.wikipedia.org/w/index.php?title=File:Egypt_(orthographic_projection).svg&page=1http://en.wikipedia.org/w/index.php?title=File:Flag_of_Egypt.svg&page=1http://en.wikipedia.org/w/index.php?title=File:Egypt_(orthographic_projection).svg&page=1http://en.wikipedia.org/w/index.php?title=File:Flag_of_Egypt.svg&page=1http://en.wikipedia.org/w/index.php?title=File:Egypt_(orthographic_projection).svg&page=1http://en.wikipedia.org/w/index.php?title=File:Flag_of_Egypt.svg&page=1http://en.wikipedia.org/w/index.php?title=File:Egypt_(orthographic_projection).svg&page=1

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EGYPT PEST ANALYSIS

Key FACTS about Egypt:

Full name:Arab Republic of Egypt Capital: Cairo

Population: 80.3 million

Area: 1 million sq km

Major language:Arabic

Major religions: Muslim 90% , Coptic 9% & other Christian 1%

Currency: Egyptian Pound

Main exports: Petroleum, petroleum products, cotton, Textile, Metal product and

Chemicals.

Geographical Location: Northern Africa, bordering the Mediterranean Sea,

between Libya and the Gaza Strip, and the Red Sea north of Sudan, and

includes the Asian Sinai Peninsula.

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POLITICAL ENVIRONMENT

Political structure:

The Egyptian Constitution provides for a strong executive. Authority is vested in an

elected president who can appoint one or more vice presidents, a prime minister, and a

cabinet. The president's term runs for 6 years. Egypt's legislative body, the People's

Assembly, has 454 members--444 popularly elected and 10 appointed by the president.

The constitution reserves 50% of the assembly seats for "workers and peasants." The

assembly sits for a 5-year term but can be dissolved earlier by the President. There also

is a 264-member Shura (consultative) Council, in which 88 members are appointed and

174 elected for 6-year terms.

Main political parties:

The multi-party system was restored in 1976 by the then president Sadate. However, in

practice it is the ruling National Democratic Party (NDP) which completely dominates

the political arena. The Muslim brothers, a brotherhood created in 1928 by Hassan El

Banna is the main opposition party of the country.

Environmental laws:

According to the Law 4/1994 for the Protection of the Environment, the Egyptian

Environmental Affairs Agency (EEAA) was restructured with the new mandate to

substitute the institution initially established in 1982. At the central level, EEAA

represents the executive arm of the Ministry.

The Principal Functions of the Agency Include:

Formulating environmental policies.

Preparing the necessary plans for Environmental protection and Environmental

development projects, following up their implementation, and undertaking Pilot

Projects.

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The Agency is the National Authority in charge of promoting environmental relations

between Egypt and other States, as well as Regional and International

Organizations.

Foreign trade:

The Egyptian market is gradually opening up, especially after signing an agreement

with the European Free Trade Association (EFTA) in 2006, and a free trade treaty with

the United States. Its three primary export partners are the European Union, which

represents more than a third of the trade, United States and Syria. Its three primary

import partners are the European Union, the United States and China. Egypt mainly

exports mineral fuels and oil, cotton, iron and steel. It imports mainly consumerelectronic goods and capital goods, nuclear reactors and nuclear-powered boilers,

cereals, food products and chemical products. Import volume has doubled and is twice

the export volume, a fact which contributed to the deterioration of the country's trade

balance.

Tax Rate:

The standard rate of corporate income tax is 40%. The rate is 32% on profits arising

from export operations and on profits of an industrial company as long as they arise

from its industrial activities.

Withholding Tax:

Contracting and supplying: 1%

Services: 3%

Commissions: 10%

Professional fees (under LE 500): 10%

Professional fees (over LE 500): 15%

Leasing of property or selling of goods for trading or manufacturing: 1% - 5% (to be

added on the payee's tax liability account.

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Corporate Tax Exemptions and Deductions:

Almost all business expenses are deductible including depreciation, interest, royalties,

rent, profit sharing payments to employees, legal expenses, pension and Egyptian state

social insurance contributions.

Profits of companies located in the free zones.

Capital gains are applicable in some cases of asset replacement.

All tax holidays granted under Investment Law No.8/1997.

Personal Income Tax:

Taxable Income:

Tax Law No. 187 of 1993 distinguishes among the following categories of income of

individuals (as well as partners in partnerships):

Salaries and wages.

Commercial and industrial profits

Income from immovable property

Income from movable capital

Noncommercial profits.

Labor force and laws

Labor force

Government, armed forces & public sector: 36%

Agriculture: 34%

Private sector: 30%

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ECONOMICAL ENVIRONMENT

Occupying the northeast corner of the African continent, Egypt is bisected by the highly

fertile Nile valley, where most economic activity takes place. Egypt's economy was

highly centralized during the rule of former President Gamal Abdel NASSER but has

opened up considerably under former President Anwar EL-SADAT and current

President Mohamed Hosni MUBARAK. Cairo from 2004 to 2008 aggressively pursued

economic reforms to attract foreign investment and facilitate GDP growth, but is

postponing further economic reforms because of global economic turmoil. With the

installation of the 2004 Egyptian parliament, the Government of Egypt began a new

reform movement, following a stalled economic reform program begun in 1991, but

moribund since the mid-1990s.

The international economic downturn slowed Egypt's GDP growth to 4.5% in 2009,

predominately affecting export-oriented sectors, including manufacturing and tourism.

Unemployment is rising. In 2009 the government implemented a $2.7 billion stimulus

package favoring infrastructure projects and export subsidies, and is considering up to

$3.3 billion in additional stimulus spending in 2010 to mitigate the slowdown in

economic growth.

In September 2009 - Egypt was ranked among the worlds 10 most active reformers for

the fourth time. The country moved up to 106 from 116 among 183 economies

worldwide in the overall ease of doing business ranking. According to the recently

released report by IFC and the World Bank Doing Business 2010: Reforming through

Difficult Times, Egypt made business start-up less costly, expedited the construction

permit process, expanded the information available from the private credit bureau, and

created commercial courts to speed up contract dispute settlements.

Being a former global leading reformer and a regional leading reformer in 2008/09,

Egypt continued to make it easier to deal with construction permits by issuing executive

articles for the 2008 construction law and eliminating most preapprovals for construction

permits. Contract enforcement was expedited with the creation of commercial courts.

http://www.doingbusiness.org/default.aspxhttp://www.doingbusiness.org/default.aspxhttp://www.doingbusiness.org/default.aspxhttp://www.doingbusiness.org/default.aspxhttp://www.doingbusiness.org/default.aspxhttp://www.doingbusiness.org/default.aspx

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Egypt Risk Assessment:

Rating: B

Risk Assessment

The economy has also benefited from oil country boom via their investments andemigrant worker remittances. In this context, the business environment is improving with

the Coface payment incident index remaining below the world average. While the gas

sector has continued to develop, manufacturing, construction, tourism, and

communications have achieved excellent performance. The outlook for 2008 is bright

with growth likely to reach between 7.0 and 7.5 per cent. .

The external financial situation remains healthy amid the good trend on foreign currency

earnings and the increase in foreign direct investment fuelled by the privatizations. Debt

service is low and Egypt is building up foreign exchange reserves. However, the fiscal

deficit and public sector debt remain a source of concern. Controlling public spending

and reducing the debt necessitates a spending overhaul that will take time. Regional

conflicts and poverty have strengthened Islamist opposition movements. In this context

social climate is tense and officials have exercised caution in pursuing reforms.

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SOCIOCULTURAL ENVIRONMENT

Egypts total population stood at 80.3 million. Out of this approximately 90% are

Muslims while the remaining are Christians. Most of the population inhabits the area

near the Nile River and almost half of Egypts population is urban, living in the densely

populated cities such as Cairo and Alexandria.

The education indicators of Egypt project a poor image of the education system. Only

about 58% of the population is literate and there is a big difference in the literacy rates

for males and females. Male literacy rate is around 68%, while female literacy rate is

just about 47%, indicative of gender disparity. The National Council for Women, a nodalgovernment agency that works for the welfare of women in Egypt, aims to completely

eradicate illiteracy among females.

The healthcare system in Egypt is underdeveloped with only around 29% of the

population covered by governmental health insurance. Egypts public healthcare system

is under-funded, with the government committing only around $1 billion in 200506 for

upgrading the healthcare sector, which represents a meager 2.7% of the total state

budget. The ministry of health is the largest institutional financier providing free

healthcare services in Egypt but its reach is limited. Almost 65% of the Egyptian people

pay for their own insurance through private and other health insurance organizations.

The total spending on healthcare in Egypt is only about 4% of its GDP.

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TECHNOLOGICAL ENVIRONMENT

Egypt's IT spending is expected to increase from US$1.3bn in 2010 to US$2.1bn by

2014 and the Egyptian IT market growth is forecasted to remain below pre-economiccrisis levels in 2010, but economic recovery, tenders delayed from 2009 and higher

incomes boosted by pay raises for civil servants and other groups should help to keep

sales on an upwards trajectory.

.

A number of policies have been implemented to attract foreign investment in IT

outsourcing, including local employment subsidies, lower corporate taxes and

deductions for training costs. The Egyptian minister of state for administrative

development has said that 200 government services will soon be available online

through a new e-government portal. The portal will offer 70 services in both English and

Arabic. According to the Ministry for Administrative Development, more than 20

government agencies currently offer services and licenses online.

.

Egypt's computer hardware sales are projected at US$821mn in 2010 and are forecast

to reach around US$1.3bn in 2014. Egypt's IT market will stay hardware dominated,

with spending on PCs sustained by initiatives like the 'Computer for Every Student' and'PC for Every Home' programs. Hardware accounted for an estimated 62% of Egypt's IT

spending last year. Households account for 20-25% of unit sales, with almost 1-1.5mn

households said to possess a computer at present. .

Overall spending on software remains rather low, which reflects the relative immaturity

of Egypt's IT market. One market driver has been a significant fall in software piracy,

with the illegal software usage rate, as measured by the Business Software Association,

falling a further 1% to 59% in 2008. While large corporations have long understood the

business case for deploying technology, small and medium-sized enterprises is

increasingly beginning to see such investments as important if they are to avoid being

overtaken by more tech-competent competitors. .

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EGYPT'S SWOT ANALYSISI believe that before embarking on a journey, one should analyze everything carefully

from the starting point, the road/journey and the goal. So, here I begin with the first step

i.e. the starting point. Being a marketing professional, I cannot help but borrow from the

marketing terminology hence the title "SWOT Analysis". I believe it does not help to hide

from the truth; we need to realistically assess our situation in order to position ourselves

well to achieve our goal.

Of course I will start with Strength not only because it's the first letter but also because it

gives a positive push and appeals to my optimistic nature :) As you may know the

elements for strength has to come from within so we need to consider what Egyptsinherent elements of strength are. I have to say at this point that the major element I see

is the people or the human factor (not only because we exceed 80 mil. but because at

this point in time we are a really motivated 80 mil. thanks to the January 25th spirit). I

have to admit that this human factor comes with its inherent weaknesses such as

illiteracy and poverty, however, these weaknesses could be remedied and the start

should be educational reform (and we will discuss this at length in the coming article

about the second step i.e. the journey). Besides the human factor, we also have the

natural resources, Egypt may not be an oil country but still it's not a poor country either;

its main problem was mismanagement and corruption (again to be discussed in the

journey). Our resources, as they have repeatedly mentioned over our school years,

include oil, gas besides the Suez canal and our great resort cities as well as the last but

not least resource the Pharaonic monuments and artifacts.

As for weaknesses, it seems that I have already covered most of them during my talk

about strengths; apparently I am not the optimist I thought myself to be:) To recap,illiteracy, poverty, mismanagement and corruption are the greatest obstacles I see on

the road (I am sure many people can add more to this list but these are the ones I

believe pose the greatest threat and are the root for many of the other problems we

suffer today).

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Opportunities and threats are both external factors. So if we look what's out there at this

particular time, we'll find a mixed picture. On one hand, in terms of opportunities, many

countries seem to be willing to offer help at this stage financially and otherwise to

guarantee achieving democracy in Egypt (if you believe all the rhetoric which I

personally have to take with a grain of salt till it materializes into action). On the other

hand, in terms of threats, I see two major problems that may make these offers of help

vaporize. The first being the state of the world economy which may make a number of

countries unable of helping Egypt because they need to consider their own problems

first (something which I cannot blame anyone for). The second and more troublesome

obstacle is possibility of the rise of politically active Islamists in Egypt to power (not

necessarily the top of the political ladder but at least to the point where they have an

overreaching effect on all decisions) which most probably may automatically lead to

making Egypt a pariah to many countries even though no one cares to discuss this

scenario at length at this particular stage.

To wrap it all up, I believe that we may be in a fix right now but we are not doomed to

stay in it forever. We are well positioned for a good start if we can make a realistic and

well-managed plan for our journey. So for the coming article, I will try and collect

many of the plans proposed by experts that build on our strengths and remedy our

weaknesses.

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FINDINGS

POLITICAL ENVIRONMENT :

Political structure:

Egypt's legislative body, the People's Assembly, has 454 members--444 popularly

elected and 10 appointed by the president. The constitution reserves 50% of the

assembly seats for "workers and peasants." The assembly sits for a 5-year term but can

be dissolved earlier by the President.

Main political parties:

They were able to win 88 seats in the People's Assembly in the 2005 elections. The

other opposition parties like Wafd, El-Ghad or the Nasserian Party are minority parties

and were nearly wiped out in the 2005 elections.

Environmental laws:

The Egyptian Environmental Affairs Agency (EEAA) was restructured with the new

mandate to substitute the institution initially established in 1982. At the central level,

EEAA represents the executive arm of the Ministry.

Foreign trade:

Egypt mainly exports mineral fuels and oil, cotton, iron and steel. It imports mainly

consumer electronic goods and capital goods, nuclear reactors and nuclear-powered

boilers, cereals, food products and chemical products. Import volume has doubled and

is twice the export volume, a fact which contributed to the deterioration of the country s

trade balance

.

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Tax Rate:

The standard rate of corporate income tax is 40%. The rate is 32% on profits arising

from export operations and on profits of an industrial company as long as they arise

from its industrial activities.

Taxable Income:

Commercial and industrial profits

Income from immovable property

Income from movable capital

Labor force:

Government, armed forces & public sector: 36%

Agriculture: 34%

Private sector: 30%

ECONOMICAL ENVIRONMENT:

Egypt Risk Assessment:

Risk Assessment

The external financial situation remains healthy amid the good trend on foreign currency

earnings and the increase in foreign direct investment fuelled by the privatizations. In

this context social climate is tense and officials have exercised caution in pursuing

reforms.

SOCIOCULTURAL ENVIRONMENT:

Egypts total population stood at 80.3 million. Out of this approximately 90% are

Muslims while the remaining are Christians.

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The unemployment rate, which has averaged more than 10% over a decade, increased

to over 12% in 201112 with the population growing at 1.8% per annum, the economic

growth of 4.4% is not enough to curb the unemployment rate

The total spending on healthcare in Egypt is only about 4% of its GDP.

TECHNOLOGICAL ENVIRONMENT:

Egypt's computer hardware sales are projected at US$821mn in 2010 and are forecast

to reach around US$1.3bn in 2014.

Overall spending on software remains rather low, which reflects the relative immaturity

of Egypt's IT market. One market driver has been a significant fall in software piracy,

with the illegal software usage rate, as measured by the Business Software Association,

falling a further 1% to 59% in 2008.

The Egyptian IT services market is dominated by demand from government, finance

and telecoms sectors, which account for more than 25% of Egypt's total spending.

Freedom and financial freedom. Egypt is ranked 12th out of 17 countries in the Middle

Egypts economic freedom score is 57.9, making its economy the 100th freest in the

2012 Index. Its overall score is 1.2 points lower than last year, reflecting declines in

property rights, business East/North Africa region, and its overall score is just below

world and regional averages.

Egypt has opened its markets to global trade and investment, but non-tariff barriers

continue to constrain trade freedom. The investment regime has been stable, but flowshave slowed significantly due to the challenging economic and political situation. The

state owns about 45 percent of the banking system. The financial system has been

under stress, with negative impacts from the global crisis exacerbated by domestic

turbulence

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CONCLUSION

Based on the above information it is clear that, Egypt have a high potential market in

construction industry which shows an increment in size at least every year, within

this specific industry the government have also done several reforms in order to be

favorable to both the domestic and foreign investors especially when it come to

obtaining construction permit. Also the petroleum sector has outstanding

developments in the past few years, with government trying to integrate renewable

energy technology in a commercial scale.

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BIBLIOGRAPHY

Websites:

www.imf.com

www.indexmundi.com

www.cia.gov.com

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Thank you