CAIRO — On July 30, Egypt’s Ministry of State for Immigration and Expatriate Affairs held its first forum for Egyptian expatriates. The conference resulted in several recommendations to promote investment in Egypt. They included exploring the possibility of opening branches of local banks abroad, marketing the Egyptian banking system to Egyptians abroad and coordinating between the Foreign Ministry and banks to include representatives of Egyptian banks in consulates.
Upon the request of President Abdel Fattah al-Sisi and in cooperation with four banks, Misr Life Insurance started issuing Safety Certificates in March. The savings certificates are available for marginalized classes and self-employed workers.
The forum also called on the banking sector to study a proposal put forward by the Egyptian diaspora in the United States to establish an investment fund in dollars. On June 9, Nasser Saber, the president of the Egyptian-American Association for Entrepreneurship, revealed a plan to create the fund with a capital of $10 billion from Egyptian expats to invest in Egyptian markets.
The forum and the fund have renewed talks about Egyptian expat money as one of the solutions to Egypt’s economic crisis. A crisis over the lack of foreign currency reserves at the end of ousted President Mohammed Morsi’s term in 2013 led to floating the Egyptian pound in 2016. A February 2016 initiative called on each Egyptian expat to send $200 to his home country.
Saber said in a June 9 press statement that the fund aims to support the Egyptian economy and connect Egyptians abroad to their home country by investing their surplus income there.
He said that the association negotiated with the heads of Egyptian communities abroad to create the fund. The share price will be $1,000, and Egyptian expats can buy more than one.
The investment fund initiative is not the first of its kind. Minister of Immigration and Expatriate Affairs Nabila Makram proposed an initiative in March 2016, offering $50, $100 and $200 portfolios for Egyptian expats. Makram traveled abroad to promote the initiative, which brought back $250 million.
In 2014, then-Minister of State for Legal and Parliamentary Affairs Mohamed Mahsoub presented a similar proposal to the Egyptian community in the United Kingdom to invest Egyptians' money abroad. That proposal failed. The Future Fund for Investment in the Stock Exchange — an investment fund to support the Egyptian stock exchange, which was launched by the Investor Protection Fund in the wake of the January 25 Revolution — also failed when Egyptian expats did not partake.
Mostafa Ragab, who heads the Egyptian House in London, does not believe that the forum and its recommendations will bring anything new to the table and will fail because not many Egyptians can invest due to the high cost of living abroad.
Ragab told Al-Monitor that the occasional initiatives targeting Egyptian expats’ funds are just a “media show” for the institutions behind them and they cannot attract any investments. He added that most Egyptian expats feel that Egypt only wants their money. They contribute by transferring money to their families, which supports the foreign exchange reserves in Egypt.
Alaa Salim, the secretary-general of the General Union of Egyptians Abroad, said that the recommendations of the forum, if properly implemented, could benefit Egypt and its economy. He told Al-Monitor that the recommendations are not only about Egyptians' investments. They also propose dividing the customs duties on Egyptians’ cars abroad into installments and called for easing several other obstructions for Egyptian expatriates. These procedures, like obtaining civil status documents, passports and marriage or birth certificates, often take a lot of time.
Salim pointed out that the money that could potentially be invested in this fund surpasses the holdings of some banks. He said the idea in itself is good, but it must be done through the proper channels to guarantee the investors’ funds. The initiative should be run under the umbrella of the Ministry of Investment, he said, and abide by Egyptian law.
He added that Egyptian expats want safe and profitable investments that connect them to their home country.
Egyptian-Romanian Business Council Chairman Hassan al-Shafei said, “The forum itself is a successful idea, especially if it aims at resolving the problems facing Egyptians abroad rather than attracting new investments. The current situation is not appropriate for investment.”
Shafei told Al-Monitor that the suggestion of the Egyptian-American Association for Entrepreneurship risks failing because of the deteriorating Egyptian economic situation and ongoing price hikes. He said that the proposed figures are too ambitious.
Shafei explained that the current situation is not suitable for any new investment products, especially after the failure of the 2014 fund proposed by Mahsoub, Makram's 2016 initiative and the Future Fund.