With the world economic crisis right now, this is a very good vote of confidence in Egypt,’ the official said, adding that the project would involve investment of 1.4 billion Egyptian pounds ($248 million) over five years…A memorandum of understanding to set up the zone was signed in 2008…Simon Kitchen, vice president for research and economics at investment bank EFG-Hermes, said it was a positive signal amid the financial crisis but said the impact would be long term…’It is money coming in — in particular at a difficult time — but I expect we will feel the impact of this over five to 10 years rather than immediately,’ he said…Egypt used to promote free trade zones that offered tax breaks and other benefits, but Kitchen said it was now trying to attract investors without such breaks but with a low corporate tax rate of 20 percent, reduced bureaucracy and improved infrastructure…The ministry official, who asked not to be identified, said the zone’s partners would initially target Spanish firms, which could include textile, machinery and autopart makers. They would then also seek to attract other European firms…The zone, based in Egypt’s 10th of Ramadan city, could generate 20,000 jobs, the official added…Egypt, a North African country of about 80 million people, recorded economic growth of 7.2 percent in 2007-8 but expects it to slow to 4 to 4.5 percent in.2008-9, adding to the challenge of creating enough jobs for its young workforce.
Date:4/28/2009
Source:Reuters