It is certainly a great achievement for Egypt to be among the world’s top destinations for investment. It is even more gratifying to see Egypt consistently climbing the ranks for the fourth consecutive year, according to the recently published World Bank report Doing Business 2010.
Foreign investment—provided it is regulated by proper standards and conditions—can expand a country’s economic output, create jobs, and drive growth, particularly in the early stages of capital inflow. It also strengthens foreign currency reserves and brings numerous other benefits, depending on the recipient country’s strategy and national priorities.
Over the past decade, the Egyptian government has introduced numerous procedural reforms to attract foreign investors, particularly in the last five years, during which these efforts intensified. As a result, Egypt has advanced ten places in the global Ease of Doing Business index, moving from 116th to 106th place out of 183 countries.
The World Bank report attributes this improvement to a series of measures Egypt implemented this year, including reducing the cost of starting a business, expediting the process of obtaining construction permits, expanding the scope of information provided by the private credit bureau, and establishing commercial courts to accelerate the resolution of contract disputes. The report commended these efforts.
However, how wonderful these reports are when they deliberately overlook—or conveniently separate—several key factors that have played an equally significant role in achieving the same results.
The World Bank, the very institution praising Egypt’s investment environment, is also the one that issues scathing reports on the country’s labour conditions and environmental policies—two fundamental issues directly linked to the so-called ‘growth in foreign investment’. Yet, it is precisely Egypt’s extreme leniency in these areas that serves as the real incentive for many investors. In the early 1990s, when Egypt was grappling with excessive bureaucracy and security concerns due to bombings at the time, British pharmaceutical giant Glaxo Wellcome decided to invest in the country, establishing one of its largest factories worldwide. Clearly, the recent procedural reforms have facilitated further investment, but they were never the primary factor in attracting foreign capital in the first place.
In advanced economies, strict environmental regulations designed to protect future generations often limit or even prohibit highly profitable but hazardous industries. But in Egypt, investors are welcomed with open arms and granted exceptional privileges. In fact, Egypt may well be the first country to allow the construction of a petrochemical plant inside a nature reserve—an extraordinary level of ‘facilitation’. So why wouldn’t investors rush in? Are they really more concerned about our health than we are?
Labour laws in Egypt tell a similar story, making comparisons only possible with the world’s least developed nations, such as Bangladesh, Sri Lanka, or certain sub-Saharan African states. Cheap labour, minimal or non-existent workplace safety regulations, seasonal employment, ineffective health insurance, and a lack of proper pension schemes all make Egypt an attractive destination for unethical foreign investors seeking maximum profit at any cost. It is not uncommon to hear about private companies, backed by foreign investment, exploiting their workers through extreme overtime—conditions that would be unthinkable if not for poverty silencing any complaints.
Speaking up is not an option, especially when many workers do not even have formal contracts. In some cases, employees are made to sign a resignation letter (Form 6, used for termination) at the same time they sign their employment contract. Sudden mass layoffs are also perfectly legal under Egypt’s investment-friendly policies. And let’s not forget the many other ‘advantages’ Egypt offers—either enshrined in law or simply left unregulated—especially in the absence of real trade unions. So, welcome to all foreign investors, Arab and Egyptian alike. After all, why not?
This article is originally published by AlBorsa in Arabic and later AI-translated by South Push.