Economic Relations
Italy ranks 11th, not including the recent license acquired by Edison group to drill for oil and gas in Abo Qir, valued at 1.4 bn Euros, in terms of foreign investments in Egypt. There are currently about 789 Egyptian-Italian joint projects with a gross capital of about 1.45 billion US dollars according to the General authority for Investment and Free Zones (GAFI) data. Trade exchange is also estimated to have reached 5.1 bn USD during 2011. All this makes Italy one of the largest investors in the Egyptian economy; including the petroleum, tourism, communications and banking sectors.
Other areas of cooperation between the two countries include the transfer of Italian technology to Egypt especially in the furniture manufacturing, leather, food and chemical industries. It also extends to Italian support of technical and industrial training programs. The most notable example of this is the textile sector where Italian investments were used to establish cotton spinning factories operating under Italian supervision. Furthermore investments were used to found technical schools and upgrade the skills of Egyptian youths to enable them to enter the labor market.
The second phase of the Egyptian-Italian debt swap program was launched after agreement on the main clauses which are; improving Siwa’s environment, considering ecological balance when utilizing water resources, maintain the Wadi Al-Rayan and Elba Mountain reserves, integrating management of solid waste in Menya, preserving the cultural heritage of Saqqara and Fayyoum. This is in addition to activating the memorandum of understanding between the Italian Ministry of the Environment and Egypt’s Ministry of State for Environmental Affairs regarding supporting areas of potential building, eco-tourism, climate change and better utilization of water resources.
Trade Exchange
Egypt is current Italy’s number one trade partner in the European Union. As of 2007 Italy has become the world’s largest importer of Egypt’s petroleum and non-petroleum products. Thus Egypt expends considerable effort in developing its economic and commercial relations with its Italian partners.
Italy is the second trade partner on the international level after the US. The trade volume increased by 6.2% from 4.8 to 5.1 bn Euros between 2010 and 2011.
The volume of trade between Egypt and Italy witnessed a significant and steady increase during the period from 2009 to 2011; where it increased from 4.045 billion Euros in 2009 to 5.1 billion Euros in 2011.
The value of Egyptian exports to Italy increased from 1.442 to 2.528 bn Euros between 2008 and 2011. Non-petroleum exports alone exceeded one billion Euros reaching 1.063 billion Euros in 2011. This reflects diversity of the Egyptian exports and their ability to compete with other exports in the Italian and European markets.
The balance of trade between the two countries was tipped in Egypt’s favor in 2007; recording a surplus of €636 million. Egypt’s non-petroleum exports also exceeded €932 million. An opportunity is available at present for increasing Egypt’s exports to Europe through the Green Initiative in Italy.