Jams, red tape and graft obstruct business in Egypt

Jams, red tape and graft obstruct business in Egypt

Slack infrastructure investment leads to gridlock; State education fails to provide the right skills; Bribes necessary for success, say some managers.

January 27, 2011 2:35 by Reuters

GREASING PALMS

The shortening of port turnaround times did not sweep aside all the bureaucratic headaches for importers, who complain that labelling and testing requirements are still cumbersome.

“What we would hope for is to do is a risk assessment approach that would not necessarily test every single shipment,” said Jalal Abu Gazaleh, founder of Gourmet Egypt, a food importer. “If you’re in a business that does regular small shipments, the cost is very high.”

Gazayerli said state agencies that test products should be merged to quicken the process and reduce the bribery that some company managers say is essential for business to run smoothly.

He said there are 17 state bodies that monitor and control the food industry, but a recent law is supposed to merge them into one authority.

“These types of legislative reforms will cut the bureaucracy and accordingly the corruption,” he said.

Egypt’s government set up a Transparency and Integrity Committee in 2007 to monitor corruption, find ways to tackle it and publicize the harm it does the economy and society.

Corruption has grown around the world in the past three years, but corruption watchdog Transparency International ranked Egypt 98th out of 178 countries last year in its global index of perceived levels of corruption, in which number one is the least corrupt, up from 115th out of 180 countries in 2008.

The 2011 ranking puts it level with Burkina Faso and Mexico and trailing regional peers Saudi Arabia, Morocco and Tunisia.

Some say Egypt’s efforts to tackle graft still fall short.

The head of an event planning company, who declined to be named for fear of official reprisals, said bribery had become synonymous with success in his industry.

“You’d be hard-pressed to find an events company that doesn’t bribe tax officials,” he said. “They turn up at the door of your event on the day even though they’re well-aware that you already have the correct paperwork … and paid the necessary dues.”

(By Shaimaa Fayed)

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Tags: doing business in egypt, Egypt, Egypt bribes, Egypt business, Egypt economy, egypt growth, egypt problems, egypt red tape, Egypt traffic