Entrepreneurship grows in Egypt’s flailing economy

Egypt’s salvation may lie in the thousands of small, informal businesses across the country

Adel Abd ElSadk, left, examines a final product, aluminum foil printed with the drug name and brand, at his factory financed partly from the Social Development Fund outside Cairo, Egypt. Monday, March 3, 2014 (Photo credit: Amr Nabil/AP)
Adel Abd ElSadk, left, examines a final product, aluminum foil printed with the drug name and brand, at his factory financed partly from the Social Development Fund outside Cairo, Egypt. Monday, March 3, 2014 (Photo credit: Amr Nabil/AP)

CAIRO (AP) — In Egypt’s newest reality television show, contestants sold fruit juice from push carts in Cairo’s busiest market and later organized a desert safari for tourists, hustling to make sales in the capital’s crowded streets.

The program, called “The Project” in Arabic, highlights entrepreneurship and small business acumen — something experts say is more crucial than ever as Egypt tries to claw its way out of tough economic times.

With youth unemployment upward of 30 percent and its economy only now back to levels seen before its 2011 uprising, Egypt’s salvation may lie in the small, informal businesses run by those scraping out a living in the Arab world’s most populous country.

“There is not even a word for entrepreneurship in Arabic,” said Anna Elliot, executive producer of “The Project” and founder of Bamyan Media. “But there is this hunger for it.”

Egypt’s economic landscape is largely controlled by its government, the country’s No. 1 employer. However, the government is grappling with large budget deficit and has had to seek billions of dollars in financial bailout cash from Gulf nations since a July 3 military overthrow of Islamist President Mohammed Morsi.

But outside of government-owned companies and large multinational corporations, there are thousands of small, largely informal businesses, from street vendors to small shops. Most of those don’t pay taxes and operate in small towns and informal areas outside the capital.

Experts believe that gray economy truly powers Egypt. Ghada Fathi Waly, managing director of Egypt’s Social Fund for Development, estimated that at least two-thirds of the country’s economy rides on the informal businesses. Waly, who was last week also appointed a government minister, recommended allowing the businesses to run outside of government control to allow them to flourish, while registering and taxing only potential exporters.

“I think we should definitely be very optimistic about small businesses in Egypt,” Waly said. “We have seen that this sector has shown resilience and has been able to change course.”

One company that received aid from the social fund is Trustpack, which makes the foil backing for sheets of pills. Owner Adel Abd ElSadk, who ran the machines himself in lean times, said he now employs 84 people from his two-room shop on the outskirts of Cairo.

“I thought it would be better than if I lived my whole life as an employee, with all of my efforts going toward benefiting others, and not myself,” ElSadk said.

Waly said it’s the kind of attitude she’s seen emerge since the country revolted against autocrat Hosni Mubarak in 2011. She said many Egyptians say they want to break away from the model of a centralized government economy and the so-called “crony capitalism” of the Mubarak era.

“Young people are realizing that the government is not going to be hiring,” Waly said.

That push is highlighted on “The Project.” Bamyan, funded in part by the government-run US Agency for International Development, produced a similar show on entrepreneurship in Afghanistan.

Elliot said her hope is that the show will ultimately help job creation in Egypt, even if indirectly. All contestants voted off the show are told “you’ll realize your dream, just not with us,” and are given seed money to jump-start their own business. A recent conference hosted by the show in a village in southern Egypt attracted hundreds, she said.

Contestant Thari el-Din, a Nubian from southern Egypt who plans to open a handicraft workshop for people with special needs, said the show made him believe he could succeed.

“I used to think, you know, someday I will do this,” said el-Din, 23. “I used to think I needed a big space to start my business. Now, I’ve found that I’m able to start small, and it’s much better that way.”

Yet contestants remain far removed from the daily challenges of Egypt, living outside of Cairo, chauffeured in air-conditioned buses and using brand-new mobile phones. Waly, the social fund’s director, said her work also has been affected by the constantly changing governments and bureaucracy accompanying Egypt’s tumultuous last few years.

Despite that, she said her work offers a front-row seat to the vibrant small business growth taking place across Egypt.

“We want people to know that while part of Egypt was demonstrating, part of Egypt was also working,” Waly said.

Copyright 2014 The Associated Press.

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