United States Investment Promotion Office (USIPO), 263-0102 : project assistance completion report (PACR)

Investment Promotion Office (USIPO) under the auspices of the Egypt - U.S. Joint Business Council as a private nonprofit organization to promote U.S. business investment in Egypt. From 1981 to 1988 USIPO was primarily used by the General Authority for Investment and Free Zones (GAFI), a Government of Egypt (GOE) agency, as a private sector support organization for activities related to the GOE-managed Private Sector Feasibility Studies Project (PSFSP -- 2630112). As a result, USIPO reacted to the needs of the GOE and was not a proactive organization with its own strategic plans, goals, and objectives. From 1981 to 1988 USIPO"s accomplishments were modest at best, providing very limited information on Egypt"s investment environment to American investors who visited Egypt. From 1988 to 1989 USIPO was granted increased financial resources and independence. USAID transferred the PSFSP to USIPO in 1988, a few months before a new A.I.D./USIPO follow-on cooperative agreement was signed in 1989. USIPO managed to increase the rate of PSFS project activity and facilitated the activities of several U.S. investors to Egypt. With the new cooperative agreement in 1989, export promotion started as a small part of USIPO"s mandate. As it turned out, export promotion became very successful from 1990 to 1991. In fact, an evaluation of USIPO conducted by SRI International in 1990 noted the tremendous effort and resources necessary to facilitate U.S. investments to Egypt and suggested USIPO expand its activity and resources in export promotion. In 2/92 A.I.D. designed the Export Enterprise Development Project, a $10 million follow-on project strictly devoted to export promotion, in effect postponing investment promotion until economic conditions were more favorable. The following lessons were learned: (1) the GOE"s economic policies, implementing procedures for foreign investment, and the projected returns on investments are the most important factors in determining foreign investment decisions; (2) a well-organized, focused, and independent private sector organization, not a GOE entity, that can provide accurate, reliable, up-to-date market information to U.S. investors, is the preferred vehicle to promote and facilitate U.S. investments in Egypt; (3) financial incentives -- such as feasibility study cost sharing or reconnaissance cost sharing trips to Egypt -- are useful to U.S. business executives but not critical to a decision to invest; and (4) any investment promotion activity requires highly skilled TA to support the implementing agency and patience on the part of the donor. (Author abstract)