2008 Ambassador Speeches
Ambassador Scobey Speaks to 10th of Ramadan Investors Association
October 16, 2008
Thank you very much. I would like to thank his Excellency, the governor, so much for allowing me to come and to visit this huge governorate. I cannot wait to come back when I have more time to spend here. I thank Mr. Halal, Senator Basharas, and Mr. Mohammed Farid Khamis for inviting us to come and work with you today on a seminar designed to look at the practical aspects of enhancing U.S. and Egyptian trade.
I thought I would do two things: first a few general opening remarks, then I can tell you a little about what the United States is doing today in response to the financial disruptions that many of you have observed. We can talk a little, perhaps, about how we [The United States], from our perspective, intend to continue to go forward. Because, as Mr. Halal said, global trade is the life-blood of the planet. We are all interconnected, none of us stand alone. I can assure you that no matter what happens, either in our presidential elections or on the economic front, the pursuit of global trade will continue to be a key aspect of the United State’s view of the world. It is simply too important to all of us to neglect.
But I would just, again, like to thank you so much for inviting me. This group, itself, is really a symbol of what the free market can accomplish. I can only but imagine what 10th of Ramadan looked like thirty years ago, it was clearly a desert. The incredible investment and leadership and accommodation and encouragement, both from the government and the private sector, is clearly seen today in this enormous industrial development, where you have created jobs and wealth for tens of thousands – even hundreds of thousands – of Egyptians. So I congratulate you for this.
This association, again, has shown me such hospitality. This is the first time we are doing this seminar for promoting business with the U.S. and I think it is really fitting that we start off here in 10th of Ramadan city, because it really is a crucible of U.S. and Egyptian economic mutual activity. We hope to do this in many other cities and governorates around Egypt. This program demonstrates our commitment to a strong, vibrant, bilateral trade relationship and is really but one example of U.S. government initiatives to promote trade. Other examples are the Qualified Industrial Zones, US trade and development grants, and the bilateral investment treaty, which is concrete evidence of our commitment to a strong US and Egyptian economic relations and to a prosperous Egypt and, hopefully, to a prosperous America. I can only assure you that we will continue to look for new ways to enhance and promote this relationship. Nothing is every finished in the world of business, investment, and trade; you are always trying to do more.
Again, thanks to the enormous contribution and dedicated effort by institutions, such as the 10th of Ramadan Investors Association, our bilateral trade grows and we enjoy an unprecedented level of cooperation and partnership. Trade and economic relations have significantly diversified and expanded in recent years through the remarkable efforts of business people such as yourself. You have played a significant part in Egypt’s economic accomplishments of recent years, creating one of the fastest growing economies in the world.
In 2007, bilateral trade between Egypt and the United States was more than $7.7 billion, a 75% increase in just three years. So far in 2008 the growth has continued; the first quarter figures have shown an increase of 19% in bilateral trade. We understand the importance of trade and we will pursue a diplomacy that involves US business in Egypt and in the region. We anticipate that the pursuit of free trade will continue to be a hallmark of US policy because it is the right course to pursue. In Egypt we are firmly on the path from aid to trade and the achievements, so far, are staggering. The United States remains Egypt’s largest trading partner, buying 33% of everything Egypt exports to the world. In 2007, Egypt was the 62nd largest exporter to the US out of 233 countries. In the last ten years, Egypt’s exports to the US increased by 262%, while Egyptian textile exports, specifically, increased by 400% percent.
We hope that events like today will help to increase trade even more. We know that it is you, the private sector that is the real engine for the creation of jobs and sustained economic growth. Again, I would like to thank everyone for hosting this seminar today.
I wanted to turn briefly. I am not an economist, by profession or training. I am a diplomat. But I want to try to put the current economic situation into perspective, from a diplomatic point of view. I think I would be totally out of my league to try to predict what is going to happen to the world economy in the coming months and weeks. What I can tell you is the United State, working very closely with both the international monetary organizations of which your own finance minister is now a leading element of the financial committee, working with other industrialized partners have really come together to try to figure out what is best to do for the financial challenges that have emerged. This is what the United States has done today; and what we have done has been very consistent with the actions we have agreed upon with the G7 finance ministers and it is built on a program we put in place to bolster financial market stability. US financial authorities have announced, very recently in the last couple of days, additional, significant measures to reinforce the financial markets. First, the Treasury department is launching a voluntary capital purchase program to assist financial institutions to rebuild their capital base and increase the financing of business. We will be investing in a number of financial institutions across the country in order to provide a stable basis for the economy. Second, the US Federal Deposit Security will guarantee new issues of senior debt by banks and financial institutions for a period of up to three years. This should help to unlock the inter-bank market and help, also, to provide limited deposit insurance on non-interest bearing transaction accounts, which are often used by short-term operating expenses – such as payroll, through the end of 2009. Third, the Federal Reserve has been working with other central banks to assure that financial institutions have access to the dollar liquidity they need to unlock credit markets and get money flowing back to businesses and families. The Federal Reserve plans to buy commercial paper to ensure businesses have a financing backstop.
It’s important to note that these measures, and those taken in Europe, are an implementation of the G7 plan of action. We will need to continue to work together to address the current financial market difficulties.
This is, in a very short snapshot, a current events description of what the United States has done to address financial challenges and difficulties in the marketplace. I am certain, if you are following our election at all, both of the candidates have outlined additional measures that could be taken by the United States. The US Congress is looking at additional measures, as well. I cannot predict what the outcome of our elections is going to be, I cannot predict what our congress is going to do, but I can predict, as I said earlier, that we will continue to work closely with our financial partners around the world and we will continue to work and promote the free movement of goods and services across national boundaries. Because, as Mr. Halal pointed out, it is this global trade that has allowed all of our economies to grow; it has created jobs. As I said before, I am not an economic expert and I cannot predict the future. Mr. Halal outlined a number of, what I hope to be, worst case scenarios, but I don’t think there is any consensus right now on the duration of the difficulties that the market is facing. But I do know that, with confidence in each other and around the world, whatever problems there are we can shorten and ameliorate them by continuing to work on the fundamentals of building good business relationships.
Thank you very much.