JEDDAH: Businessmen participating at the Saudi-Egyptian Business Council Wednesday decided to launch a Saudi bank with a capital of one billion Egyptian pounds to support Saudi investments in Egypt, and assist investments that incurred damages as a result of the recent events there. The Council also deputized Saleh Kamel, Chairman of the Council of Saudi Chambers of Commerce and Industry and Chairman of Jeddah Chamber of Commerce and Industry, to meet with the Egyptian government and discuss the support of Saudi investments in Egypt and be acquainted with the new investment opportunities that Saudis can exploit in Egypt. They also decided to have a survey conducted on the magnitude of damages of Saudi investments in Egypt during the recent events. Moreover, the Council also agreed to pay workers at Saudi investments in Egypt for the days during which the work had stopped due to the events. Chairman of the Saudi-Egyptian Business Council, Dr. Abdullah Dahlan, said it is difficult at present to give statistics on the damage. “There was only operating losses, not capital,” he said, adding that tourist investments could have been largely affected, as well as the bourse. However, he noted, factories' production is starting to churn out at levels close to levels before the events. He further said the meeting discussed two major topics: the damages to Saudi investments in Egypt, which were limited to operating losses only; and secondly, the demands of Saudi investors who call on the Saudi and Egyptian governments that any new laws issued must not harm existing investments and previous privileges, and called for an Egyptian government announcement to reassure them about that matter. He estimated the volume of Saudi investments in Egypt at about 30 billion Egyptian pounds. According to the data of the Saudi Monetary Agency, he said, the trade between Saudi Arabia and Egypt in 2009 reached about SR13.71 billion. Meawhile, the closure of Egypt's banks for two of the past three weeks has added strain on an economy already reeling from the evaporation of tourism and a prolonged stock market closure caused by the political upheaval that ousted leader Hosni Mubarak. The closures were ordered after protests and strikes by poorly paid bank workers, some of them demanding a purge of executives they accused of corruption. Concerns over a lack of security also factored into the decision. Most police disappeared from the streets a few days after the revolt began on Jan. 25 and many have not returned. The bank shutdown and the draining of ATM machines have paralyzed businesses and left ordinary people scrambling for cash. The economy has been crippled by the unrest, which has forced many businesses to shut and factories to halt production. More than 150,000 tourists fled, dealing a blow to one of Egypt's top sources of foreign revenue. The stock market is not set to open again at least until Sunday, which would make it a three-week shutdown. The benchmark stock index fell about 17 percent in two sessions before it closed on Jan. 28. Initially, trade was halted while authorities put in place measures to curb any more sharp and sudden drops amid the instability. Then the strikes and bank closures prolonged the shutdown. “We are in an environment of a revolution,” said Tarek Amer, board chairman of the National Bank of Egypt, the country's largest public sector bank. “Companies are not able to conduct their business in the best manner,” added Amer, who is also on the Central Bank's board. “If this continues, it could affect investor confidence.” The protests by bank workers are just a small slice of the labor unrest rekindled by the uprising against Mubarak's regime. Virtually every sector has seen stoppages or protests, from the airlines to textiles and steel to ship repair services along the Suez Canal. “If, of course, workers demand more and, as a result, they strike and these strikes continue over a period of time, this will have a destabilizing factor,” said John Sfakianakis, chief economist with Banque Saudi-Fransi in Saudi Arabia.
