Time to Talk Business

Iran and Egypt’s Economic Interests Demand Closer Bilateral Relations

As cradles of Eastern civilization, Iran and Egypt have long enjoyed cordial relations, playing a key role in the advancement of human civilization. Historic accounts say ties between Iran and Egypt date back to Xerxes’ era, when the Egyptians would teach Iranians how to practice medicine in return for irrigation techniques. There have been cultural, economic and scientific exchanges ever since. The dawn of Islam made the relations all the more important. Many Iranians who had played a role in taking Islam to Egypt took up residence there and contributed to the promotion of ties in all fields. Trips made to Egypt later by Iran’s world-famous scholars and poets showed how important Egypt was to Iranians. The Fatamid rule in Egypt saw a climax in ties, with many Iranian customs securing a place in Egyptian culture.

Despite high potentials for even stronger bonds between the two nations, Tehran-Cairo ties have unfortunately witnessed dramatic ups and downs in more recent history. These are mainly the result of international developments—and their inevitable impact on the strategically-important regions of West Asia and North Africa—rather than the two nations’ will. Among other developments that have left their impacts on Iran-Egypt ties are the Cold War and the emergence of Zionism. The victory of the Islamic Revolution in Iran spelled an end to East or West affiliations in the republic, however the world couldn’t accept such a phenomenon and this in turn dealt another blow to Iran-Egypt relations.

Fortunately, the adoption of a foreign policy by Iran which has its roots in détente, the concept of ‘Dialogue among Civilizations’ put forward by Iranian President Mohammad Khatami and Iran’s contribution to this internationally recognized plan towards peace have all helped remove the misunderstandings between the two nations. History reveals Iran and Egypt have managed to take giant steps towards a better rapport when they arrive at a common understanding of the international order. Never before has this common understanding been at a higher level than now.

Economic relations are a key factor for the expansion of political ties, and the Egyptian government has in the past stated that it is serious in the coordination of economic relations with Iran. The meetings of businessmen and the exchange of trade delegations have produced constructive results, and major contracts have been—or are in the process of being—signed. A review of the recent events will indicate that mutual relations are improving, and the meeting of the two countries’ foreign ministers on the sidelines of the Organization of Islamic Conference in Doha was a productive move in mutual ties.

It is regrettable that the amount of mutual trade transactions is not at the ideal level favored by both countries. The mere $50 million of trade exchanges between the two countries indicates the failure of the two countries’ commerce chambers in introducing mutual business potentials, and this is the main reason for the low level of mutual relations. This volume of trade between the two nations is vastly disproportionate to the size of their combined populations of 130 million. In a move to increase the volume of trade, the ICCIM has called for greater exchanges and trade missions between the two states.

New channels of banking communication have been established between the two countries and the Iran-Egypt Development Bank has proposed to set up a joint Iranian-Egyptian investment company to spur further cooperation between the two countries. The establishment of banking cooperation between the two countries has been welcomed as a factor picking up the level of commercial, economic and political ties.

Over 30 private-sector and government firms participated in the Iranian special products fair that take place in Nasr City, Cairo. Among issues that were discussed on the sidelines of the fair, Egyptian and Iranian businessmen were expected to discuss ways of improving trade between their two nations and the advancement of Cairo-Teheran commercial relations in general. This event follows a trade fair held in Tehran, in which five Egyptian businesses participated. The successes of the Iranian exposition have led to raised hopes and expectations in Cairo.

The managing director of Egypt’s Al Adham Company, Mousa al Adham, announced that five sugar cane processing plants are to be built in Iran in cooperation with Egypt. Adham also told the deputy head of ICCIM, in a meeting on the sidelines of the 26^th Tehran International Trade Fair, that Iran’s tobacco company and Egypt have signed a contract for the production of 20 million cigarettes a year.

The visit of a delegation from ICCIM to Cairo was another great, determining stride, which thawed relations between the two Muslim countries of Iran and Egypt. The delegation’s visit to Iran is a confirmation of the fact that people in Egypt are keenly interested in the resumption and expansion of economic and trade relations with Iran. The warm and sincere welcome accorded to the Iranian delegation in Egypt was also proof of the heartfelt enthusiasm that Egyptian people expressed for having relations at the highest level with the people and government of Iran. Furthermore, in their speeches and interviews, the President, Foreign Minister and other senior officials of Egypt emphatically stressed Cairo’s interest in having expanded relations with Tehran. Many point to the fact that Almighty God has invited all Muslims to unity and convergence, and thus minor issues cannot hinder promotion of bilateral ties between these two great Islamic countries.

These talks have achieved agreements on the mutual participation of Iran and Egypt in international fairs in both countries as well as setting up exclusive exhibitions in the two capitals, Egyptian officials have not only promised the extensive participation of their country in the Tehran fair but have also promised to provided all the required facilities for setting up an exclusive Iranian exhibition in Cairo.

Due to the visit of Iranian delegations to Egypt bilateral Tehran-Cairo relations have witnessed such rapid developments that the Egyptian press has termed the visits as a turning point in relations between the two countries. When these are considered alongside the cordial relations existing between Iran and Saudi Arabia, it is tempted to state that if Iran, Saudi Arabia and Egypt, as the three great Muslim countries in the region, join hands of fraternity, no power could penetrate into the region.

Egypt signed economic and commercial co-operation agreements with several Islamic countries to establish an Arab Common Market, namely, the Arab co-operation council and the council of Arab Economic Unity. Egypt has signed an agreement with Russia covering the Export of local goods in return for Russian spare parts and other electric equipment projects. It has an agreement with the Palestinian authority to facilitate trade between them. In 1995 Egypt and Japan signed three agreements concerning the construction of dams. It signed financial agreements with Switzerland. Egypt and Jordan signed a contract with Alcatel of Norway to lay four submarine cables across the Gulf of Aqaba. It also signed the Inter-Arab Trade and Transit Agreement and cooperation treaties with the European Union. Egypt also signed investments agreements with Indonesia, China, Romania, Hungary, Turkmenistan, Uganda, Netherlands, Sri Lanka and Korea.

Egypt’s main exported products are spinning and weaving products; agricultural goods (cotton, rice, potatoes, citrus, medicinal herbs, spices…); metallurgical products; chemicals; pharmaceuticals, paper products, cosmetics; and food industries (molasses, refined sugar, canned vegetables and fruit, cigarettes and tobacco). Egypt’s main imported products are iron and steel; petroleum and its products; organic and inorganic chemical substances; wood, cork and articles thereof; resins and artificial plastics; as well as paper and articles thereof.

The G-15 was set up during the Non-Aligned Movement (NAM) Summit in Belgrade in 1989, with the aim of expanding economic cooperation among developing countries. The members of the group are from Asia, Africa and Latin America. The Islamic Republic of Iran joined the G-15 grouping as its 18th member in May 2000, during the 10th G-15 Summit in Cairo. Major objectives of the developing club include, acquiring readiness for putting the capacities of the developing countries into practice for sound effective cooperation, surveying the economic impacts of globalization and international relations on the developing countries, the implementation of south-south cooperation, following up the north-south negotiations for overcoming mutual problems, constant consultations among the developing countries for the adoption of coordinated policies at the global arena, and giving a legal framework to multilateral cooperation.

To improve the situation of the Muslim world and strengthen unity between Islamic countries, it is necessary for relations between Iran and Egypt to be normalized like two brother countries. Mentally and historically, Egypt is the country closest to Iran and considering the long term interests of the Islamic world, it is necessary to move towards a normalization of relations. Those who are against such a normalization are short sighted and do not take into account the interests of the Islamic world.

Iran and Egypt cut diplomatic ties after Egypt signed a peace treaty with Israel in 1979. Iran does not recognize the Jewish state and supports the Palestinians in their quest for independence. In the past few years, the two have restored dialogue and official visits have increased. But one of the main stumbling blocks to resuming relations is a Tehran street named after the assassin of Egyptian president Anwar Sadat, who was gunned down at a military parade in 1981. An official on Tehran city council said two months ago that a decision to rename Khaled Eslamboli Avenue had been made, but that the foreign ministry had been given the final say. But a foreign ministry official said it had yet to rule on the matter: "If a decision is made, it is going to be announced," the official told AFP. For its part, Cairo has a street named after the former shah of Iran, who was given shelter by the Sadat government and died in Egypt in 1980.