A Saudi business-delegation is scheduled to visit Cairo this Monday, with the legal impediments to Saudi investment leading the visit’s agenda.
Reportedly, Dr Tawfik Al-Rabea, Saudi Minister of Industry and Trade, will head the delegation that encompasses up to 35 Saudi businessmen, in addition to the Saudi Ambassador to Egypt, Ahmed Al-Katan.
The Egyptian delegation will be represented by; Ossama Saleh, Minister of Investment; Hussain Sabour, chairman of the Egyptian Businessmen Association; Hatim Saleh, Minister of Industry and Foreign Trade, and Ahmed al-Wakeel, Chairman of Chambers of Commerce Union.
A press release issued by Ministry of Industry and Foreign Trade reported that after a meeting of Hatim Saleh and Ahmed Al-Katan; the Saudi Ambassador asserted Saudi Arabia’s commitment to support Egypt economically, and encouraged foreign and Arab investors to grow their current investments and inject new ones.
Saudis are facing legal obstacles with regard to their investments in Egypt. Saudis are encountering legal encroachments related to the vaunted privatisation programme, solicited by Ahmed Nazif’s government, under the previous regime. Egyptian representatives filed various law suits against the privatisation of state-owned companies that granted ownership to Saudi investors over these companies. These legal assaults, by Egyptian representatives, as well as workers’ strikes led to the halt of over 20 investment projects, Al Jazeera, a Saudi daily newspaper, reported.
The National, an Emirati English-speaking newspaper, reported 18 March 2012 that Saudi investors were planning to seek international arbitration against the Egyptian government for $250 million in claims. A growing number of foreign investors were seeking international arbitration against the Egyptian government to restore their claims over privatised companies, according to The National’s report.
The Egyptian Ministry of Agriculture decreed the expropriation of Al-Noubaria seed production, a company previously privatised and owned by Saudi investors. In October 2011, military and police officials stormed the company’s offices in Alexandria, seizing documents and ordering managers to answer to them, according to the National.
In September 2011, an Egyptian court annulled the privatisation of Tanta Flax and Oil, a previously Saudi-owned company. The company’s chairman, Sheikh Mohamed Saleh Kaki, who happens to be an investor in Al-Noubaria seeds production, is pursuing separate legal proceedings against the Egyptian government over the court’s decision, according to The National’s report.
Egyptian government officials, on the other hand, stressed the need for boosting foreign investments and to pave the legal and procedural path in order to drag the country out of its economic hardship.
Saudi Arabia is Egypt’s biggest Arab-gulf investor, investing around EGP30 billion, and Saudi businessmen own up to 2300 companies operating in Egypt, specialising in different sectors. Trade exchange between the two countries amounted to $ 1.21 billion during the first quarter 2012. Saudi Arabia also receives the biggest proportion of Egyptian workers and professionals working abroad.