The Egyptian government believes that Upper Egypt is a region that has the potential to develop into a new hub for both manufacturing and services projects. Governorates located in southern Egypt are equipped with many competitive advantages: 30% of Egypt's total population, abundant natural resources and a diversified economic base.

The government has put in place various initiatives to encourage investment in Upper Egypt; the establishment of clusters, investment incentives and employment grants; free land to investors in Upper Egyptian governorates (with the exception of Fayoum); technical assistance through Egypt's Industrial Modernization Center (IMC); and technology centers and training.

The Upper Egypt Development Company is a company that has been established to encourage private-sector investment in Upper Egypt. The Company currently has two branches in Cairo and Assiut and has begun to launch projects in several governorates. A new road has been established to link Upper Egyptian governorates with Safaga Port and Sohag Airport.

Companies established within southern Egypt are incorporated in accordance with investment law 8 of 1997 or law 159 of 1981(Inland Investment).

The QIZ protocol between Egypt and the United States grants certain products manufactured in Egypt preferential access to the United States as long as they satisfy the rules of origin related to local content. They are currently 19 QIZs located within 4 geographical areas: Greater Cairo, Middle Delta, Alexandria and the Suez Canal Zone,

Both Egyptian and Israeli companies must contribute and maintain at least 10.5 % of the minimum 35% local content required under the legislation in order to qualify duty-free access to the US.

Manufacturers on both sides must also contribute and maintain at least 20% of the total cost of production of goods eligible for duty/-free access, excluding profits, even if the cost can not be considered as a part of the 35% minimum content requirement.

For this purpose, costs may include originating materials, wages and salaries, design, research and development, depreciation of capital investment and overheads.

The QIZ protocol was signed in December 2004, and today they are 705 companies eligible to export under QIZ. Qizs are expected to help further develop Egypt's robust textile and garment industry as well as supporting sectors. Qiz incentives and guarantees include duty – free access to the US market for products that comply with the rules of origin requirements; flexible application of the requirements; no quotas on exported products; and open – ended validity, in that the QIZ protocol does not have an expiration date.

Not only is the state encouraging more foreign and inland investment in the country's burgeoning industrial and service sectors, but they have also allowed the private sector to deepen its participation in the economic reform process through a public-private partnership (PPP) strategy that aims to enhance the quality of services available in the country while simultaneously decreasing the financial burden on the government.

In 2006, the Ministry of Investment initiated a comprehensive PPP promotion strategy, which included the creation of a legislative and institutional framework that will facilitate the execution of major PPP infrastructure projects and encourage more local and foreign investors to partner with the government in priority sectors including water, transportation, health and education.

On the legislative front, the Ministry of Finance is currently drafting new PPP legislation to govern the relationship between the government and the private sector detailing the responsibilities of each side. The law is expected to become final later this year.

On the institutional and capacity building fronts, a joint PPP Unit has been established by the Ministries of Investment and Finance. Sector specific regulatory agencies have also been established to deal directly with various projects that are already in the works.

Between 1990 and 2005, the private sector was involved with PPPs in four infrastructure domains, including telecommunication, transportation, water and sewage, carrying out 20 projects with a total investment of US$ 7.5 billion. The telecom sector accounted for the lion's share of investment at US$ 5.27 billion. This was, however just the beginning of a successful experiment that the government intends to replicate and vastly expand in the future. More recently, the government has tendered for the construction and operation of schools as part of program aiming to build 2,210 new schools; fresh and sewage water treatment projects in Cairo and Borg El Arab; and billions of dollars in new highway projects that will speed traffic between the nation's north and south, between industrial zones and ports. Tenders for more projects are in the pipeline.

In the transportation sector alone, a projected US$ 16.45 billion in public and private investments will target upgrades in railways, roads, ports and Nile transportation during the next five years. According to the Egyptian Ministry of Transportation, US$ 9.14 billion of private-sector investments will go into ports; US$ 5.48 billion will go into building and upgrading roads and US$ 3.66 billion will go into railways. Approximately one third of total investments will come from the state and the rest will come from private investors.

Foreign companies have already placed sizable investments into Egyptian ports. Danish shipping and oil group AP Moller – Maersk signed an agreement with the Egyptian government to double the capacity of it s East Port Said terminal by 2011. In October 2007, Dubai port operator DP World acquired a 90% stake in the Egyptian Container Handling Co., located near the mouth of the Suez Canal for US$ 670 million.

In the field of education, the Egyptian Education Initiative (EEI) is a PPP between the government of Egypt, the World Economic Forum's IT member community and multinationals including Cisco, HP, Intel, Oracle, IBM, Microsoft, Siemens and Computer Associates. The initiative supports Egypt overall education reform efforts and maximizes the potential for a collaborative partnership. The main objectives of the initiatives are to improve the development of and delivery of education, to raise the quality of teacher training, to develop skills needed for a knowledge society and to provide education to a wider sector of the population.

The increased involvement of the private sector in major initiatives such as these reflects the government firm commitment towards upgrading the quality of services and facilities for its citizens.