Egyptian exports fall far below potential levels
Egyptian exports constitute a dramatically lower portion of the nation’s gross domestic product (GDP) than do exports in neighboring countries, asserted a recently published study. Foreign exports make up a mere six percent of the nation’s GDP, and the per capita share of these exports stands at $66.
In comparison, Israeli foreign exports constitute 24 percent if its GDP, with a $4,000 per capita share, while Tunisian exports amount to 38 percent of the GDP, or $600 per capita, reported Al-Akhbar.
The authors of the study, Samihah Fawzi and Ahmad Jalal, gave several reasons for this phenomenon. For one, the profit reaped from the sale of Egyptian products on the local market stands at an average 43.3 percent, while the profit for the same items marketed abroad stands at merely 19 percent. This wide profit margin gap makes it is significantly more lucrative to sell goods locally rather than in foreign markets.
The report notes that the returns on exports from neighboring countries are also notably higher than in Egypt, usually wavering around 28 percent.
However, the root of the problem is considered to be the lack of a well-defined government economic policy. This apparently results in administrative inefficiency, unending bureaucracy and a general lack of trust between individuals and the government.
The study suggested a few solutions to alleviate the economically crippling situation. These include encouraging exports by offering merchants trade incentives, establishing more free trade zones, restructuring costumes fees and reducing the exchange rate. ― (MENA Report)
© 2001 Mena Report (www.menareport.com)