RIYADH, 29 December 2003 — The Ministry of Commerce in Cairo will tackle the problems of Saudi businessmen whose exports to Egypt have fallen as a result of red tape there, Egypt’s commerce minister vowed yesterday.
Dr. Yousuf Boutros Ghali was in Riyadh for talks at the Council of Saudi Chambers of Commerce and Industry, leading an 18-member Egyptian business delegation. He told reporters the Saudi-Egyptian Businessmen’s Council would be revived as part of a joint drive to boost bilateral trade, which at $2.2 billion looks insignificant compared to the Kingdom’s bilateral trade with Bahrain at $11 billion.
Dr. Fahd Al-Sultan, secretary-general of the Council of Saudi Chambers of Commerce and Industry, said among massive obstacles were customs duties on Saudi products, which limited their access to the Egyptian market. Egyptian customs regulations also significantly hindered the free flow of trade, while fluctuation in the value of the Egyptian pound created instability in bilateral trade.
A regulation meant to bolster the Egyptian pound requires exporters to reinvest 75 percent of their export earnings in the Egyptian economy, discouraging investors, according to Dr. Abdul Rahman Al-Zamil, the chairman of the Saudi Exports Development Center.
But Boutros Ghali said the rule was a temporary measure which would be withdrawn once the Egyptian currency stabilizes.
Other problems include the high rate of taxation, including 42 percent income tax on revenue generated from Saudi investment; and lack of sufficient incentives to investors.
