Interview with the Counselor of the Embassy of Ukraine in the Arab Republic of Egypt

— Mr. Ruslan, what is meant first of all when it comes to trade and economic cooperation between Ukraine and the ARE? Is it trade turnover, the main items of Ukrainian exports to Egypt and imports from this country?

— I would say that the basis of active Ukrainian-Egyptian relations is trade and economic cooperation. As just mentioned, Egypt is our largest trading partner in Africa and the Arab world. This is best evidenced by the following indicators: in 2020, the total trade in goods and services between the two countries amounted to 1.8 billion US dollars. The largest trade turnover between the two countries for the last 5 years was in 2019 — 2.6 billion US dollars. The main articles of our export are grain, products of a metallurgical complex (semi-finished products from steel, hire, pig-iron, ferroalloys, pipes), mineral products, production of mechanical engineering, wood and paper, production of agrarian and industrial industry and food industry, fats and oils of an animal or vegetable origin, poultry, dairy products). The products of Egyptian imports are mainly vegetables and fruits, mostly citrus ones (up to 50 %), petroleum products, nitrogen fertilizers…

— Can this be considered a positive consequence of the work of Ukrainian companies in Egypt? If so, which ones specifically?

— Egypt is attractive to us not only in terms of trade. Ukrainian companies are implementing a number of interesting and large-scale projects there. In February 2017, the Ukrainian company Tatra-Yug won a tender announced by the Alexandria Passengers Transport Authority for the supply of 15 trams. That is, we received an order to upgrade the rolling stock of the oldest tram system in Africa. This large-scale project for our producers became the first in the region of the Middle East and North Africa since the independence of Ukraine, and provided employment to about 250 Ukrainian enterprises. In 2021, under the contract, Alexandria received all 15 trams. Tatra-Yug is interested in increasing the supply of tram cars to Egypt, so it will participate in other projects.

The Embassy also provides political and diplomatic support to the Ukrainian National Foreign Economic Corporation Vazhmashimpex, which is a participant in several international projects being implemented in the ARE. These are modernization of the coke-oven battery No 3 of the Egyptian El Nasr Company for Coke & Chemicals; iron ore enrichment project with the Egyptian Holding Company for Metallurgical Industry. Naftogaz Ukrainy’s investment project in Egypt, about which I will tell later, is the largest foreign one.

Round table and press conference at the Embassy of Ukraine in Cairo on October 7, 2020 with the participation of Ukrainian and Egyptian representatives of the metallurgical business, including the Director of Metinvest Regional Office Ghazi Maherzi, the Founder & CEO of Steel Network Ahmed Hegazi and the Advisory Board Member of Steel Network Ahmed Hegazi

— In this case, we are talking about the legal framework between our state and the ARE, i.e. bilateral interstate and intergovernmental documents…

— The current legal framework between Ukraine and Egypt has 31 documents (conventions, agreements, memorandums), most of which are economic in nature. An agreement between Ukraine and the ARE on mutual assistance in civil and commercial matters, as well as an intergovernmental agreement on air communication have already been initialed and are ready to be signed within the framework of the forthcoming bilateral measures. The parties are still drafting such key and extremely important documents in the economic context as the intergovernmental agreement on cooperation and mutual assistance in customs matters, the agreement on mutual understanding on cooperation in standardization, the memorandum of understanding on space cooperation and peaceful use of outer space…

— In 2020, a meeting of the Intergovernmental Joint Commission was planned. In general, has the issue of joint production in Egypt been considered for sale in African markets?

— In 2020, the coronavirus pandemic made its adjustments. If the epidemiological situation allows, we will hold the next, eighth, meeting of the Intergovernmental Joint Commission on Economic, Scientific and Technical Cooperation between Ukraine and Egypt by the end of this year. Its agenda is extremely rich: issues of bilateral trade, cooperation in the field of investment, and cooperation in the fields of space, information technology and communications, transport, energy, tourism, etc. In the context of the integration processes taking place on the African continent, in particular within the framework of the African Continental Free Trade Area (AfCFTA), I would like to note that the establishment of joint ventures and production in the ARE will give Ukrainian companies market access of 1.3 billion consumers and with a total GDP of more than 3.4 trillion US dollars, because if the appropriate level of localization of production is achieved, the product is considered as manufactured in the ARE and has the right to duty-free movement both within its territory and within existing economic integration associations (African countries and most Arab countries). So, I believe that the transfer of production or partial production of Ukrainian industrial goods and the involvement of Ukrainian technological processes in Egypt is quite promising. This will also be discussed at the next meeting of the Intergovernmental Joint Commission in Cairo.

March 18, 2021. “Ukraine-Egypt: Promising Spheres of Cooperation” online conference, organized by the Chamber of Commerce and Industry of Ukraine with the support of the Federation of Chambers of Commerce of Egypt

Representatives of the Chambers of Commerce and Industry of Ukraine and Egypt met in 2020. We also held zoom meetings with the CCI of Ukraine and the Federation of Egyptian Chambers of Commerce, which were attended by about 100 companies from both sides. Currently, the business community of Ukraine and Egypt intends to intensify the activities of the Ukrainian-Egyptian Business Council, established more than 10 years ago, which consists of representatives of both Ukrainian and Egyptian business. The activities of the Council will focus on promoting business and bilateral investments in both Ukraine and Egypt, holding various business forums and sectoral business exhibitions in both countries.

— Today, extremely important attention is paid to the theme of energy, which is of interest not only to experts. What can be said about cooperation between Ukraine and Egypt in the energy sector, in particular in oil and gas industry?

— It should be reminded that since 2007 Naftogaz Ukrainy has been implementing the largest foreign investment project in Egypt. Naftogaz Ukrainy is currently involved in two concession projects in the ARE, namely Alam El Shawish East Western Desert and South Wadi El Mahareeth (block No 8) and Wadi El Mahareeth (block No 9) in the Eastern Desert. Since the start of operation, more than 15 million barrels of oil and gas condensate have been extracted and delivered to the oil terminal. In 2021, the management board and supervisory board of Naftogaz Ukrainy decided to further develop assets in Egypt. One of the priorities was to improve the financial and economic performance of existing projects. At the beginning of June 2021, a meeting of shareholders of Petrosannan Company, a joint venture between Naftogaz Ukrainy and the state-owned Egyptian General Petroleum Corporation (EGPC), was held in Cairo. Naftogaz Ukrainy is studying new promising areas in the ARE for oil and gas exploration as part of a policy to continue and expand cooperation with Egypt.

By the way, thanks to the discovery of gas fields on the Egyptian shelf of the Mediterranean Sea, Egypt has recently moved from natural gas importers to the category of its producers and exporters. Therefore, one of the promising areas of cooperation is the export of Egyptian liquefied natural gas to Ukraine. However, it still needs thorough expert study.

— We have just mentioned the cooperation between Ukraine and the ARE in the field of tourism. Has the pandemic not reduced the activity of Ukrainian citizens seeking to holiday in the ARE?

— Egypt is one of the main centers of recreational holidaying for Ukrainians abroad. Two years ago, about 1.5 million Ukrainian tourists visited Egypt, in 2020 — 727 thousand, in seven months of 2021, more than 750 thousand. Let me point out that the citizens of Ukraine became the first foreign tourists who arrived in the Egyptian resorts of Hurghada and Sharm el-Sheikh following Egypt’s resumption of international air services in early July 2020. At the moment, there are about 10 daily flights from Ukraine to Egypt from different cities — Kyiv, Odesa, Dnipro, Lviv, Kharkiv, etc. These are direct and charter flights. In order to attract Ukrainian tourists, the Egyptian side launched by October 2021 joint campaigns with Ukrainian tour operators. In Egypt, there is a flight incentive program for airlines, which simplifies the visa regime, provides a 50 % discount on fees for boarding, accommodation, and 20 % discount on fees for ground handling. The price of fuel have also been decreased by 0.15 US dollar per gallon…

I am pleased to note the close cooperation and active dialogue of our relevant agencies — the State Agency for Tourism Development of Ukraine and the Ministry of Tourism and Antiquities of Egypt. This is evidenced by the visits to Ukraine of the Minister of Tourism and Antiquities of Egypt Khaled El-Enany in July 2020 and his Deputy Ms. Ghada Shalaby in July 2021, during which issues of security of Ukrainian tourists and cooperation in the tourism sector were discussed in detail. By the way, as a result of bilateral agreements in early September 2021, Egypt launched a Ukrainian-language hot line for Ukrainian tourists to provide assistance in emergencies, including in case of need for hospitalization or treatment from COVID-19. This is a very valuable step for our state…

— I wonder how you assess the current internal situation in Egypt?

— The main priority of the President of the ARE Abdel-Fattah al-Sisi after his re-election for a second term in 2018 was declared a large-scale reform of the economic system and strategy of Egypt. Therefore, at least until 2023, the government will try to ensure sustainable economic development in the face of falling living standards and production under the influence of external factors and the negative consequences of the coronavirus pandemic. Despite the problem of the high level of poverty in the country, which today is the main stimulus to anti-government moods, the overall economic situation is quite stable and favorable. High macroeconomic performance in the context of the COVID-19 pandemic and Egypt’s attractiveness to foreign investors ensure short-term financial stability…

The Egyptian economy has one of the highest growth rates in the Arab world. The government’s structural reforms have significantly intensified foreign trade. Therefore, new opportunities open up for Ukrainian exporters, which contributes to strengthening partnerships between the two countries. The peculiarity of the Egyptian market is also that business in Egypt is represented mainly by monopoly structures. At the same time, the Egyptian government is continuing reforms aimed at increasing the transparency of customs procedures and reducing the number of documents for the export and import of goods, taking into account the possibility of providing them electronically…

November 3–5, 2020. A delegation of the Ministry of Economic Development, Trade and Agriculture of Ukraine headed by Deputy Minister — Trade Representative of Ukraine Taras Kachka visited Cairo to hold bilateral consultations on the protective measures for the import to Egypt of semi-finished products from iron or non-alloy steel and reinforcing steel

— Has the COVID-19 pandemic significantly affected the Embassy’s activities?

— At the beginning of 2021, under the quarantine restrictions, the Embassy worked mostly online. For example, on January 28, 2021, in cooperation with the Council of Exporters and Investors at the Ministry of Foreign Affairs of Ukraine, an online briefing was held for Ukrainian producers — “Entering the Market and Doing Business in Egypt”, which became the first in a series of briefings for Ukrainian companies where it comes to trade opportunities in Africa.

During the presentation, representatives of Ukrainian business got acquainted with the general economic situation in Egypt, peculiarities of working in local markets. Topics of public procurement by Egyptian government agencies were also covered, in particular, the specifics of the organization of tenders and sales, the system of certification of logistics peculiarities of Egypt, including Halal certification. In March 2021, the Embassy joined the online conference “Ukraine-Egypt: Perspectives of Cooperation”, organized by the Chamber of Commerce and Industry of Ukraine with the support of the Council of Exporters and Investors at the Ministry of Foreign Affairs of Ukraine.

— You mean, we can assume that with the reduction of the impact of the pandemic, the situation will improve?

— With the improvement of the epidemiological situation, traditional forms of cooperation began to be restored. I recently returned from Sharm el-Sheikh, where the international scientific-practical conference — Poultry Conference Egypt 2021 took place on September 20–23. It was organized by the Ukrainian manufacturer of veterinary drugs and vaccines BioTestLab together with its official distributor in Egypt — EgyVac. The conference was attended by more than 150 representatives of poultry farms in Egypt. The Ukrainian manufacturer is interested in expanding its presence in the market of veterinary drugs in Egypt and the region. And the Embassy is ready to fully support Ukrainian exporters, especially when it comes to high-tech products with a high level of added value.

September 30, according to a long tradition, APK-Inform Agency convened an international Middle East Grains & Oils Congress in Cairo. It was attended by more than 150 representatives from the Middle East, North Africa and the Black Sea region, Ukraine included. Key experts and representatives of the world grain and oilseed markets traditionally met in the region, which is one of the main importers of grain and oilseeds in the world. Interestingly, the conference was held at the St. Regis Almasa Hotel, located in the new administrative capital of Egypt, which is still unnamed.

— What is the purpose of building a new administrative capital of Egypt?

— This is something unique. It all started in 2015, when the Egypt Economic Development Conference announced preparations for the construction of a new Egyptian capital…

The cost of this megaproject is estimated at more than 50 billion US dollars. According to plans, the so far unnamed city will become the new administrative and financial capital of Egypt and will compete with the world’s most famous business centers.

Egypt is an extremely interesting, amazing and multifaceted country both in terms of hard work and diversity of daily life and communication with local friends and colleagues, life and leisure. This is my third time working in Egypt, which is rather an exception for classical diplomatic practice, but each time this country opens new pages and makes an unforgettable impression. Frankly, I’m thinking of writing a book about “My Egypt” based on my many years of observation…

— You know a lot about Egypt and it helps to set priorities in bilateral relations. What belongs to them today, and what will you mention in your future book?

— Regarding the proposals that our Embassy under the leadership of Ye. Mykytenko is trying to implement… In its relations with Egypt and other African countries, Ukraine can and should borrow the positive experience of European countries, but it should pave its own way to Africa, which is in our national interests. Throughout its independence, Ukraine has focused on the United States and the European Union. However, I think we should not limit ourselves to those players, because the world is much wider than the various established geopolitical models. 55 African countries are a large market for Ukrainian industrial, agricultural, military goods, an important source of industrial and agricultural raw materials, and Egypt with its 44 ports can in some ways be seen as a gateway for Ukraine’s entry into the African continent.

Of course, we must realize that our rather limited financial resources do not allow us to develop our activities in Africa in the way that the world’s leading countries do. But this does not mean that we cannot set ourselves ambitious goals. We need to realize that in today’s highly pragmatic world, where fierce competition prevails, we must rely first of all on our own strengths and capabilities, without renouncing the support of friendly states…

In addition to raw materials, Ukrainian businesses can increase supplies of high added value high-tech goods to Africa. That is how the trade turnover of the European Union with Africa exceeded 300 billion US dollars in 2019. African countries need a number of technologies that our country has. Ukraine belongs to a rather small group of countries that have advanced technologies in many fields of industrial production. These are nuclear and hydropower, aircraft and space technology, modern weapons and military equipment. There are all opportunities for active promotion of such technologies on the African market, through Egypt — in particular.

— What is needed for us to begin to understand this and decide on such a promising activity?

— The Ukrainian business community is beginning to promote our interests in Africa. Today, the number of Ukrainian businesses entering African markets is constantly growing, and this requires compliance with certain rules of interaction both with African partners and between these entities.

The main sphere of Ukraine’s economic cooperation with African countries today is only trade, mainly in raw materials. But this is not enough for our full-fledged partnership with African countries. First of all, it is necessary to attract Ukrainian investments to joint Ukrainian-African, mainly infrastructure projects in various spheres of the economy, both in Africa and in Ukraine. Besides, we should intensify cooperation with countries in Africa and the Middle East at the regional level. That is, regional state administrations need to intensify the work of relevant departments on cooperation of local firms and enterprises with these countries. Regional CCIs should pay more attention to cooperation with CCIs in Africa and the Middle East…

The full interview you can read in the “BINTEL” Geopolitical Analytics Journal, Issue 3, 2021