Monday, May 27, 2024

Egypt growth reversing brain drain

CAIRO, Egypt (AP) – Mohamed el-Kashashy has the kind of business experience that could help drive Egypt’s economy. During six years working in brand management and marketing, he has led focus groups in Nigeria and cut business deals in Iran.Until recently, however, el-Kashashy, like many other talented Egyptians, was sitting in an office in Dubai — a flesh and blood example of the ‘brain drain’ to booming Gulf economies that has afflicted Egypt for so many years.This year, however, el-Kashashy, 28, took a small step toward reversing the trend. Attracted by the recent growth of certain sectors of the Egyptian economy, he moved back home to take a job with an international media company in Cairo.’Egypt is on the verge of an economic boom,’ el-Kashashy said.He is not alone in his optimism.Heba el-Gabaly, a Harvard Business School graduate who worked for McKinsey & Co. in Dubai, also recently returned to Egypt to work for a financial services firm and rear her children closer to friends and family.She said four of her 10 close Egyptian friends in Dubai also decided to come home — mostly to jobs in financial services, consulting or telecommunications.’The whole region is growing, and Egyptian businesses, especially financial services, are able to tap into the entire region,’ said el-Gabaly.Although exact numbers are not tracked, the return of a trickle of well-trained Egyptians is a significant development for a country that ranks second to last among the world’s emerging economies in keeping talented people from leaving, according to a 2006 report by the World Economic Forum.Their return represents a small vote of confidence in Egypt’s economic future and could provide local businesses with the skills necessary to take operations to the next level. That, in turn, could set the stage for sustained growth in a country where lack of opportunity helps fuel extremism.Dr. Nihal el-Megharbel, a senior economist with the Egyptian Center for Economic Studies, said recent gross domestic product growth near 7 percent has indeed expanded opportunities for well-educated Egyptians — who used to rely on places like Dubai for higher salaries and standards of living.But she stressed that most of Egypt’s people have seen no benefit at all from the trend, and continue to look to Saudi Arabia, the United Arab Emirates and other countries as their only economic hope.’It will take some time for the trickle-down effect,’ she said.Nearly three million Egyptians are believed to be living and working abroad, and remittances sent home every year are among the highest in the world, totaling more than $3 billion in 2006, according to the World Bank.Reham Mansour, director of the career development office at Cairo University, said many students not educated at elite Egyptian institutions like the American University in Cairo still struggle to find jobs at home.Many of them view Dubai, the business center of the Persian Gulf and home to about 80,000 Egyptians, as the most attractive alternative.’If you give them the same opportunities, they would want to work here. But if you give them a better job, bigger salary, they would travel to Dubai,’ she said.Prospects for well-paying jobs in Egypt are best in telecommunications, financial services and consulting. Many other sectors are less dynamic. And unofficial estimates put the country’s unemployment rate at 15 to 25 percent, roughly twice the official rate.Nevertheless, a growing number of well-educated young Egyptians believe the economic reforms undertaken by the current government have significantly improved the country’s business environment.The pace of reform increased markedly with the arrival of Prime Minister Ahmed Nazif in July 2004. Since then, the government has reduced income tax rates and customs duties and has begun the difficult process of reforming the banking sector by restructuring non-performing loans and privatizing state banks.With the help of high oil prices and a surge in tourism revenue, those reforms have pushed the economy to ever-higher levels of GDP growth, reaching 6.8 percent in the fiscal year that ended in June 2006 and 7.1 percent during fiscal 2007.The government estimates that Egypt’s economy needs to grow by at least 6 percent a year to create enough jobs for the 600,000 people who enter the labor market every year.Motazmagdy Negmeldin, a Cairo University engineering student, said most of his friends still dream of going to Dubai, Europe or the United States to earn higher salaries.But with the economy growing, Negmeldin said he does not plan to leave.’Together, we can make something of this country,’ he said.Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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