Semiannual Progress Report, Contractor’s Narrative

The project is designed to contribute to USAID/Egypt's assistance objective of improving conditions for trade and investment and support the overall USG strategic economic partnership with Egypt signed in May 2009. Improvements in trade facilitation will support long-term economic development objectives, including promoting economic growth and job creation and reducing poverty. The project has two main results: external trade made more efficient and consistent with international standards, and internal trade process improved and strengthened. To achieve these objectives, the contractor, Nathan Associates, will assist the Government of Egypt (GOE) in implementing a number of reforms that enhance trade and relate directly to the US-Egypt strategic economic partnership. The main counterpart is the Ministry of Industry and Foreign Trade, with the Ministry of Finance, represented by the Egyptian Customs Authority (ECA), and the Ministry of Social Solidarity, represented by the Internal Trade Development Authority (ITDA), also playing important roles. During the reporting period, June 1–December 31, 2011, the project faced challenges in engaging effectively with counterparts and building momentum due to the current political and social upheaval in Egypt. However, momentum is now growing, as reflected in a number of recent developments. The project start-up was complicated by changes in administration, including two appointments of new Ministers of Industry and Foreign Trade. Engagement on Results 2 activities (Internal Trade) was delayed by the changing and uncertain status of the ITDA. Despite these challenges, the project made significant progress during the reporting period. Nathan Associates located and leased office space, procured furnishings and equipment, opened a local bank account, obtained counterpart letters from MIFT, and interviewed and hired administrative staff. The project's two key long-term persons were mobilized, and a gender assessment was conducted, with gender performance indicators developed and added to the proposed M&E plan. The M&E plan was developed and discussed with USAID for their comment and consideration. The project also made progress on Result 1—Trade Facilitation Measures Improved. Task 1, Improve Current Export/Import Executive Regulations, was initiated, with the Foreign Trade Sector of MIFT confirming its interest in reviewing its export and import regulations to improve consistency with international standards and with regulations of the Egyptian Customs Authority (ECA). TFP facilitated two high-level meetings between officials of FTS, ECA, GOEIC, and the Egyptian Trademark Office to follow up on recommendations coming out of November workshops on Protection for Intellectual Property Rights. Task 2, Establish a Coordinated Risk Management System for Imported Goods, was also initiated, with TFP completing the foundation activity under this task, which required an assessment of GOEIC's and ECA's capacity for implementing risk management applied to cargo inspections. A TFP team led by William Claypole assessed the capacity of GOEIC and ECA for using computerized risk management-based inspection, including the potential for a joint, integrated approach to risk management by both agencies. The report recommended against investing in a joint approach to risk management for the two agencies at the present time, due to significant differences in the two agencies' missions and objectives. The project's progress during the reporting period demonstrates its commitment to improving Egypt's trade environment and supporting the country's economic development objectives. Despite the challenges faced, the project is making significant strides in implementing its results and achieving its objectives.