Exporting Content Dairy Cow to Egypt - Essay Example

?Running head: EXPORTING CONTENT DAIRY COW TO EGYPT Exporting Content Dairy Cow to Egypt Insert Insert Grade Insert 14 November 2013 Topic of Discussion Level of economic development and the structure of its economy (agricultural, manufacturing, etc.), inflation rates, exchange rates, and structure of its imports (what are they importing from where). These affect the country's general economic prosperity, ability, and willingness to buy Content Cow's products. Introduction Dairy cows are among the cattle that are raised, reared and bred mainly for milk production and other dairy products, for example cheese, butter and ghee. The United States (U.S) is one of the countries that invest mostly in large scale production of dairy products and is in top ten in the production of dairy milk worldwide. Most of the dairy products in U.S. are exported to other countries, one of them being Egypt. Indeed, Egypt’s relations with the U.S in terms of trade has been very good (Kotschwar & Schott, 2010), and this is evidenced by the fact that Egypt is one of the largest importers of agricultural products including milk and dairy products from the US. This memo will discuss the level of development and economic status of Egypt, fiscal and monetary conditions, imports market status and the general willingness of the country to import Content Cow's products from the US. Level of Egypt Economic Development In Egypt, the ministry of international cooperation and the ministry of economic development are the ones mandated to take control of economic development. In addition, because Egypt is situated around Nile Valley, its economic and gross domestic product (GDP) growth rate is always very high. The only problem in Egypt is that, although the economy is very good most of its citizen still live in poor conditions due to political instability. There has been reduction in government revenue in Egypt in the recent past due to slow growth of economy propagated by political problems. Because of this slow growth rate of economy in Egypt, a reform plan was made to stabilize the economy; this was to include free market economy (Knaus, 2009). To begin with, social policies and proper procedures were adopted and put into action to promote economic growth in Egypt. Again, checks and balances were made on demand for money and savings procedures, including developing ands regulating prices of products, and privatization policies of underperforming government institutions. Lastly, the Egyptian government made reforms monetary policies related to local and international trade in order to encourage investment. The introduction of these reforms in Egypt led to economic development, and this can be evidenced by the continued economic growth rate in the recent years. Indeed, the recovery and growth of the economy has made Egypt to enjoys significant international trade with many countries including U.S (Kotschwar & Schott, 2010). This also boosted Egypt’s competitive international energy prices and agricultural products prices. This market-oriented idea, reforms and policies strengthened Egypt economy, albeit under fragile political climate. However, like other African countries, a large population in Egypt is still living in poverty coupled with insecurity, unemployment, and underemployment. Again, there are always heightened protests in Egypt due to bad leadership, corruption cases, lack of political freedom, and poor living standards. This political unrest has been frequent in Egypt and cases of the youth forcing the president to step down was seen in 2011 where president Hosni Mubarak was overthrown from government due poor economic policies as well as lack of political stability and peace in Egypt (Aggour, 2013). In addition, it is important that the Egyptian government should be involved in more economic development and invest more in its citizens, thus enhancing stabilization of the government. Again, political unrest has scarred investors in Egypt; also, poor market and economic growth has placed the government on the scale, and it is high time that the government finds a way of restoring peace and stability in order for Egyptians to enjoy the former international trade relations that they were having before the 2011 revolution in their country. Lastly, there is also need for proper and full support of social accountability and means to address the corruption issues in order to steer more growth rate in Egypt. Apart from government uncertainty and instability, other factors also contribute to poor growth rate of Egyptian economy, among them being high population, unemployment, and poor government policies. In addition, there is wide gap between the rich and the poor in Egypt and most of the population, especially the youth, lack employment and live below poverty line (Aggour, 2013). With this important information about slow economic growth rate and development in Egypt due to poor security and instability, it is important that other factors be considered before exportation of the dairy cow to Egypt. Economy Structure In Egypt, agricultural sector plays a big role in the economy of the country followed by industrial and services sectors. To begin with, agriculture is the backbone of economy in Egypt and most of agricultural farming is done through irrigation. This is made possible with the availability of the longest river in Africa, which is river Nile being one of the providers of water for irrigation. In Egypt, agriculture contribution to the gross domestic production makes it the largest source of capital and employment in Egypt, as well as a source of foreign exchange when farm products are exported. The main agricultural products in Egypt include, cotton, wheat, corn, sugarcane and vegetables. In addition, Egypt also produces rice and fodder, which it exports to other countries. Besides, Egypt also produces cattle, goats, and sheep, which help in building the economy. In industry, Egypt is one of the world’s producers of crude oil and petroleum products, which she exports to other countries (Aggour, 2013). In manufacturing sector, Egypt manufactures chemicals such as nitrogen fertilizers, assembles commercial vehicles, and even home appliances. Again, Egypt manufactures steel, cotton textiles and clothing. Other important sectors and structures of Egypt economy include construction services, banking and tourism sector. The structure and sectors discussed above form the backbone around which the economy of Egypt is built. Therefore, it is important for the government to stabilize its political climate in order to reap economic benefits form these sectors. This is because Egypt is one of the leading exporters of cotton, textiles, and chemicals and even processed food in the world, in addition to aggressively involving in manufacture of hydrocarbons, cement, metals and pharmaceuticals (Nawar, 2008). Inflation Rates Inflation rate in Egypt has been challenging recently. From this year alone, the inflation rate rose to 9.4% in Egypt, as a result of increase in prices of goods and services in Egypt, leading to most of the population unable to acquire essential and basic needs. This necessitated Islamist president Mohamed Mursi to call for parliamentary elections in April 2013, as one of the political alignments that would seek to curb the rising inflation (Aggour, 2013). Exchange Rates The Egyptian currency exchange rate is as follows. The Egyptians use Egyptian pounds (EGP) while the United States uses Dollars as medium of exchange. Therefore, the exchange rate is niormally averaging at six Egyptian pounds per every US dollar. 1Egyptian Pounds (EGP) = 0.145 US Dollars. 1USdollar=6.893 Egyptian Pounds (EGP). Egypt Structure Of Imports Most of the Egypt imports are industrial and some agricultural products. In addition Egypt imports heavily from European Union (EU) countries include Italy, France, Germany, United Kingdom, Belgium, Spain, and Netherlands, as well as from the United States. These imported products to Egypt include machinery, transport equipment, chemicals, fuels, mining products, and some agricultural products. Some of the products Egypt imports from US include wheat, dairy products, mineral fuels, and machinery, oils, iron and steel products (Nawar, 2008). Therefore, in terms of market, Egypt will be willing to import Content Dairy Cow, although the exporter will have to consider other factors except availability of market. Conclusion In conclusion, although the level of Egypt’s economy is healthy and promising potential for growth, the political instability seems to slow growth and hinder international trade. Poor governance and insecurity are some of the factors that are tending to scare investors away and as a result, slowing the economic growth of the country. Despite the slow growth rate in economy, Egypt is rich in terms of resources, and with stable government, it will be one of the most lucrative markets to trade in. Again, inflation rate in Egypt has been rising, thus making the cost of living to go up. Lastly, despite poor governance in Egypt and lack of security, international business is still going on hence there is need for a stable government to restore peace and prosperity in Egypt. In addition, it would be prudent to export the Content Dairy Cow to Egypt due to availability of market and good trade relations Egypt has with US government and other EU countries. References Aggour, S. (2013). President of the AmCham: political tension between the U.S. and Egypt will not reflect on trade. Daily news, 15 November 2013, pp.28-29. Retrieved from http://www.dailynewsegypt.com/2013/09/21/president-of-the-amcham-political-tension-between-the-u-s-and-egypt-will-not-reflect-on-trade/ Knaus, W. (2009). Dairy cows trapped between performance and adaptability. Journal of science of Food and Agriculture, 89(7), 1107-1114. Kotschwar, B., & Schott, J. (2010). Reengaging Egypt: Options for US-Egypt Economic Relations. Washington DC, USA: Peterson Institute. Nawar, A. H. (2008). PPI and Measuring Inflation in Business Transaction in Egypt ,Cairo University . The 20th Annual Conference on Statistics & Modeling in Human & Social Science. 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