Egypt-US Partnership in ICT: The Way Forward

1. Egypt-US Partnership in ICT:The Way Forward Tarek Kamel Minister of Communications & Information Technology June 23, 2009

2. Agenda • Egypt-US Relations • Egypt Today – Reforms Paving the Road to Success • Political Reform • Economic Reform • Egypt’s Model For Sectoral Reform – ICT Sector • Egypt-US Partnership in ICT

3. Egypt-US Relations • Over 35 years of strong relations on the different fronts; Political, Economical and Social • Political relations slowed down with the US previous administration • President Obama’s reach out to the Muslim world in general and to Egypt in particular is warmly welcomed and appreciated. It signifies a new Era of Partnership • We, the ICT sector of Egypt, are ready to start taking concrete measures to partner with US ICT sector in Technology Policies and Innovation

4. Egypt Today – Reforms Paving the Road to Success:

5. Political Reform • Moving Forward with the Democratic Process • Having the most Comprehensive Constitutional Amendments since the 80s in March 2007 • Empowerment of Women (Min of 64 Seats in Parliament) • Fostering free Exchange of Information through the Openness of Internet in Egypt

6. Economic Reform • Financial Sector Reforms • Restructured & consolidated the Banking sector • Empowered the supervisory role of an independent Central Bank • Tax Reforms • Highest personal tax rate cut from 32% to 20% • Corporate tax rate cut from 42% to 20% • Custom Reforms • Reduced tariffs from an average of 14.6% to 6.2% • Simplified tariff items from 27 to 6

7. Economic Reform • A New Regulatory Framework for Competitive Market Economy • Establishment of a Consumer Protection Agency • Establishment of a Competition Protection Agency & Anti-trust REFORM PAYS-OFF

8. Economic Reform: The Rescue In Tough Times • During the last three years, the Egyptian economy has been growing at an average annual rate of 7%. One of the fastest growing economies among emerging markets • With the current global economy crunch, real GDP growth has slowed down to 4.5% in FY 2008/09 creating an employment challenge

9. Egyptian Economy vs. ICT Sector Growth % Growth projections starting 2009 and beyond indicate that Egypt will sustain its position as one of the world’s fastest growing ICT economies

10. Egypt’s Model For Sectoral Reform – ICT Sector :

11. ICT Sector Strategic Goals • Become One of Egypt’s Major Pillars of GDP Growth • Deploy a Modern Communications Infrastructure • Foster Innovation to Improve Productivity & Citizens Quality-of-Life • Improve Egypt Hi-Tech Image & Competitiveness • Help other Egyptian Economy Sectors to Grow

12. ICT Sector Competitive Advantages • Abundant young talent, multi-lingual human supply • Intensive capacity-building programs • Structurally low cost of operations • Quality & scalable infrastructure • Strong government support & incentive programs • Conducive business environment • Strategic geographic location

13. ICT Sector Reform • Strategic Direction to Reform the Sector and Engage Egypt in the Global Knowledge-Based Economy by Adopting the following Guiding Principles: • Deregulating the Telecom Sector • Strengthening the Role of the Regulator and Ensuring its Transparency • Investing in Innovation & Human Capital • Introducing Various Modalities of Public Private Partnerships • Creating a Conducive Business Environment to Attract FDIs • Activating Intellectual Property Protection Reforms

14. ICT Sample Success Indicators: Contribution to GDP

15. ICT Sample Success Indicators: Mobile Market Boom

16. ICT Sample Success Indicators: Internet Penetration

17. Quality Services for Our Citizens • e-Education: • Achieving quality education for socio-economic development • Qualifying world-class and technically sound ICT graduates • e-Health: • Improving Public Health through (Information dissemination) • Reducing the cost and increase of the efficiency of health services in Egypt • Arabic e-Content: • Increasing the access to Arabic online digital content to reach to over 300 Million Arab speaking population around the world • Setting the environment for the production of sustained flow of Arabic digital content online

18. TargetRevenue CAGR 38% R&D/Engineering $100 m KPO Services $30 m 43% Localization 22% $40 m 46% Arab Content $200 m 72% BPO Services $75 m Technical Support 27% $200 m Contact Centres 50% $115 m IT Products* $45 m 25% IT Services $280 m 27% ICT Export Targets Target Budget: US$ 1.1 Billion Target Employees: 37K

19. ICT Industry in Egypt:Where it Stands! • “ Egypt is ranked number 6 among emerging countries in IT Services“ At-Kearney 2009 • “Egypt was once again among the top 10 global reformers - the third time in 4 years – and top regional reformer this year.” Doing Business 2009 • “Cairo is in the 7th position amongst the top 50 emerging global outsourcing cities” Global Services-Tholons Study, October 2008 • “Only Egypt has strong similarities with India and China...(and) is by far the Middle Eastern Country currently best positioned to take advantage of the boom in outsourcing” Yankee Group Report , July 2008

20. Egypt-US Partnership in ICT:

21. Excerpts from President Obama’s Speech in Cairo • “On science and technology, we will launch a new fund to support technological development in Muslim-majority countries, and to help transfer ideas to the marketplace so they can create more jobs.  We'll open centers of scientific excellence in Africa, the Middle East and Southeast Asia, and appoint new science envoys to collaborate on programs that develop new sources of energy, create green jobs, digitize records, clean water, grow new crops” • “On economic development, we will create a new corps of business volunteers to partner with counterparts in Muslim-majority countries.  And I will host a Summit on Entrepreneurship this year to identify how we can deepen ties between business leaders, foundations and social entrepreneurs in the United States and Muslim communities around the world”

22. Partnerships: Win/Win Proposition for All • We Invite the Multi-Nationals to Egypt to: • Benefit from Egypt’s big Emerging Market for Technology & Products • Make-use of Egypt’s Special Status as the gateway to the Arab region and Africa • Capitalize on Egypt’s Competitiveness in talent, infrastructure and cost • Develop Egypt’s knowledge-based Economy

23. MNCs Sample Investments in Egypt CompanyActivities • IBM Software Dev/support Centers of 1000+ developers • Mentor Graphics Design Center of 280+ engineers • Intel Regional Platform Definition Center Regional Software Enablement Lab • Microsoft Developer Support Center for Regional Developers Software Innovation Center • CISCO Core competency e-learning institute • Oracle Global Support Center with 600+ Engineers • Orange Global Support Center with 1500+ Engineers • Alcatel Lucent International Support Center with 700+ Engineers • Satyam BPO Services with 200+ Engineers • Valeo 300 + engineers for embedded SW Dev for the Automobile Industry

24. MNCs New Investments in Egypt CompanyActivities • Google Online Advertisement Industry Development in Egypt • EMC EMC Centre of Excellence (300 employees) • IBM IBM Global Delivery Center (1100 employees) • Oracle Expanding Presence to reach around 900 employees - Global Customer Services center (+200 employees) - Solution Services Center in Egypt (+210 employees) • Stream Customer Contact Center in Egypt (1,000 employees)

25. Cooperation Opportunities withUS Government • Proposal to form a US-Egypt ICT High-Level Working Group “ICTWG” to Address Policies and to ensure Continuous Dialogue in Areas Like: • Policies for Internet Governance (IGF Sharm El Sheikh Nov. 2009) • Cyber Security, Data Protection, Privacy and Child Online Safety • Modern Broadband Communications Infrastructure • Research & Innovation in the ICT Sector • Telecom & Postal Services Policies

26. Cooperation Opportunities in:Internet Governance • Future of IG: ICANN’s Joint Project Agreement with US Government to expire by September 2009 • Future of the IGF beyond its 5 years mandate: • Importance of the forum as a multi stakeholder venue for dialogue • Assessment of IGF to be presented during IGF 09 • Towards IGF 09: Developmental issues, multilingualism, child safety, enhanced cooperation, Cyber security and Internet outreach

27. Cooperation Opportunities in:Innovation & Entrepreneurship • Create Joint Research Centers & Programs (Science & Technology Fund) to Work in the Following Areas as: • Cloud Computing & Virtualization • Green Datacenters • Digitized Records • Nanotechnology • Strengthen Ties between Business Leaders, Foundations and Social Entrepreneurs in US & Egypt (Entrepreneurship Summit)

28. “Egypt is ready and looking forward to partner with the US on ICT policy discussions and to push forward the mutual, agreed-upon agenda throughout the region (Middle East & Africa)”

29. Thank You