Day 8 - Final Day of Business Visits

Day 8 wrapped up the business side of our travels in Cairo, as we stopped in for a visit at the Egyptian Junior Business Association. Right off the bat we could tell there was a slightly different tone to these talks - our speakers exhibited a much higher level of candor than at our previous stops. Not that our previous engagements weren't informative, but to a certain extent they were towing the company line, which is understandable considering the fact that they were leaders in their respective companies.

As a group though, we had a few nagging questions. If the Social Fund for Development was pumping billions of dollars into small businesses, where were the success stories? And if entrepreneurial business is so inviting for foreigners in Egypt, why was every speaker at the Entrepreneurship Business Forum originally a native Egyptian that came back either to take up the family business and grow it or to get married and start something new?

The price we had to pay for answers to these questions was a terrifying ride up an elevator with no door for 15 floors. If you've ever been on that "Tower of Terror" ride at Universal Studios or wherever it is, you have an idea of what it was like. My elevator featured two of our girls who will remain nameless, since the screaming that occurred whenever the car unpredictably switched directions was pretty intense. But we made it safely to the top, and the view was pretty nice (we walked the 15 flights down).


One of our speakers had previously worked at the Social Fund, and had a lot to say about the Egyptian culture as it relates to government. Due to its Socialist history, there is a prevailing goal of many Egyptians to land a cushy government job and be set for a life of easy work and reliable pay. Some aspects of Egyptian economics that had been presented to us as a benefit also have a down side. For instance, the much heralded resistance to the global downturn Egypt has enjoyed has been due greatly to their lack of dependence on a credit market. But the flip side is that Egypt has almost no credit market at all. Everything is paid for in cash, and there is no system in place for handling debt. There are no bankruptcy laws and the judicial system for following up on bad debts and collections is substantially limited. While a company like Vodafone can find ways around such problems, it is extremely problematic for small investors. The Social Fund, which spoke very highly of their small business loan programs, is more of a loose system for welfare and keeping people out of extreme poverty. It seems to be less about micro-loans for small businesses as it is grants for cheap labor.

The prospects for a failed business are extremely dire. Government assistance only lasts so long, and currently debts and bankruptcy in Egypt lead directly to lifetime unemployment and often jail. While we did hear that reworking these laws is the top priority of the current financial leadership of Egypt, it would be difficult to recommend small startup firms to take such a big risk outside of being backed by the government itself.

While it may sound like these talks were negative, they really weren't. We all appreciated the realistic take on the current climate of Egyptian business, and most of us knew there were some catches here and there that we hadn't heard about yet. Every developing country that offers such opportunity has its complications, and being exposed to some of these realities was more reassuring than it was disturbing, in an odd way. It was a fitting end to the trip however, and our hosts were extremely gracious in answering all our questions even if some of us were a bit worse for wear due to the previous night's Heineken party.

A shout out to Jessica and her friend for recommending Sequoia for dinner - they had some great food, a ridiculously cool outdoor tent setup with flat screen tv's, and even a sushi bar. Easily the nicest meal we had while in Cairo.