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‘Post-Mubarak Egypt holds challenge, opportunity for Korea’

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A post-Mubarak Egypt will likely face political, economic and other difficulties, posing new challenges to South Korean exporters and businesses there as well as new opportunities for them, a local trade group said Monday.

The country is now in the hands of its military after its leader of 30-odd years, Hosni Mubarak, stepped down Saturday.

The Korea Trade-Investment Promotion Agency (KOTRA) noted the interim government of Egypt will likely increase its fiscal spending to help revive and stabilize the country's economy that was driven to a near halt due to 18 days of anti-government protests.

This, however, will likely lead to an expansion of Egypt's fiscal deficit to 12 percent of its gross domestic product and a 14.6 percent spike of consumer prices this year, it said.

"Due to the anti-government protests that lasted 18 days, damage to its tourism industry and a decrease of foreign investment, the country's economic growth will likely slow to about 3 to 4 percent from an earlier forecast of 5 to 6 percent this year," KOTRA said.

"South Korean companies must work to find new opportunities in the crisis as the Egyptian government will likely launch various new projects to create jobs, repair damages and construct new infrastructures," it added.

KOTRA said earlier the Egyptian unrest has caused at least US$22.5 million in damage to South Korea's 1,738 businesses exporting products to the North African nation as of Thursday, in addition to some $2.6 million in damage to South Korean firms with production facilities in Egypt.

It said Monday that it will take some time before the companies fully recover from the damage caused by the protests, but that the country's overall exports to Egypt this year will be little affected.

"The country's exports to Egypt suffered some damage due to the protests in late January and early February, but they will gradually recover from the second quarter of the year to reach a level similar to the $2.24 billion recorded last year," it said.(Yonhap)