Egypt’s Orange Economy: A Solution To Currency Shortages

April 7, 2024


This article first appeared in March’s print edition of Business Monthly.

Since 2022, the shortage of foreign currency in Egypt has been a significant concern for the government, businesses and investors. As of Feb. 9, the pound’s black market exchange rate was twice the official one as the government announced new import restrictions to curb dollar outflows.

Sectors that require little or no foreign currency and whose products or services can be exported easily are vital for boosting dollar inflows. Enter the orange (creative) economy, which includes traditional handcrafts, photography, sculpting, and other works of art. It also covers architecture, fashion designs, recorded and live visual and audio entertainment, and fiction and non-fiction literature. That economy also includes video game development and multimedia content.

Despite its advantages, the orange economy contributes little to Egypt’s foreign currency inflows. UNCTAD (the UN Conference on Trade and Development) estimated it accounted for 2.6% of exports in 2022.

But that could grow significantly. Research by the Egyptian Center for Strategic Studies (ECSS) expects the global creative economy, comprising 196 product and service categories, to rise by 40% between 2022 and 2030.

A significant advantage for Egypt is that most consumers of orange economy products and services are citizens of wealthy nations who can afford to pay a premium. At the top of the list are the United States, Hong Kong, Europe and China, according to the ECSS.

Orange economy

In 2002, architect John Hawkins coined the phrase “orange economy” in his book, “The Creative Economy: How People Make Money From Ideas.” Research from BBVA, a financial services group, said it “refers to everything developed by people’s creativity and inspiration that becomes a good or service. It covers everything from a toy to a play, including most scientific aspects of R&D.”

The likely reason for choosing orange to describe the creative economy is that “people often associate orange with optimism, confidence, enthusiasm, [helping them] feel outgoing or even bold,” noted Verywell Mind, a mental health and wellness digital platform.

Globally, the orange economy has always been huge. Felipe Buitrago, author of the 2013 book “The Orange Economy: Infinite Opportunities,” estimated that if the entire creative economy were bundled into one product, it would be the fifth biggest seller in the world, with spending 2.5 times more than the world’s military expenditure.

UNESCO acknowledged the importance of the orange economy and the need to support artists and creators by designating 2021 the “International Year of Creative Economy for Sustainable Development.” “Many artists and cultural professionals have been ineligible for social and economic assistance [post COVID-19 lockdowns] that saved workers in other sectors,” said UNESCO. “While we consumed cultural content online more than ever before, artists and creators rarely received fair remuneration for our clicks and views.”

That trend has since reversed. “In today’s new production models, knowledge, tradition, skill, creativity and talent are creating the most wealth in the world,” said Spanish bank Santander in September 2022.

Egypt going orange

According to the ECSS, the government has been increasing private sector investment in the orange economy by building a “more conducive environment” for local and foreign entrepreneurs and creators to “help them develop their products and patent their brands to compete on the international scene.” The term “creator economy” even appears in the Egypt Vision 2030 document as the first goal in the “Support Cultural Industries” pillar.

In a December 2023 article on state-owned news agency Al Akhbar Almsaey, reporter Maha Talaat said the orange economy helps Egypt tackle poverty (sustainable development goal, SDG,1), reduce gender and inequality (SDGs 5 and 10), create decent work and economic growth (SDG 8), and boost industry and innovation (SDG 9).

To build it, the government started in 2014 by launching programs, initiatives, funds, and incubators. It also built labs and research centers to support local innovation and creativity. Almost all their focus was on technological innovation and creativity.

Talaat noted that traditional crafts also are part of the orange economy. “Designs and color schemes of handmade rugs, accessories, and brass works come from the minds of the people who make them. They are inspired by their diverse heritage, culture, and surroundings spanning thousands of years from the Pharaonic to Islamic eras,” she said. “Additionally, techniques used to produce those items were passed down from generation to generation, and the materials they require are all locally sourced.”

Another prominent activity in Egypt’s orange economy is visual and audio entertainment. “Egyptian music is … enjoyed by [the] majority of listeners in Saudi Arabia, Lebanon and Tunisia (75%, 61% and 61%),” according to a 2023 report by the Doha Film Institute.

In Forbes Middle East’s list of Top 100 Arab Celebrities, 45 were Egyptian, with actor Adel Emam topping the list. Egyptian celebrities also have the most longevity, especially Amr Diab, who “has been at the top of his game for over 30 years,” said the Forbes report.

Lebanese singer Nancy Ajram, which digital music platform Spotify dubbs the “queen of Arab pop,” had her first smash hit 22 years ago composed by Egyptian Mohamed Saad. She also sang it in the Egyptian dialect. Throughout her career, Ajram sang a significant number of her singles and albums in the Egyptian dialect. Her latest single, released in August, even included words only Egyptians use.

Growing creativity

A UN paper titled “New Economics for Sustainable Development: Creative Economy” stressed the United Nation’s role in growing the global orange economy by “committing and contributing to the centering of cultural and creative industries as a driver of trade, development, and national and regional systems of innovation.”

The paper also said the UN needs to “recognize, acknowledge and address … global inequalities” that impact the orange economy’s growth. They should also promote more of the benefits of having a creative economy and “galvanize support” for it.

Governments need to “recognize cultural and creative industries as pillars of development,” the UN paper said. “Financing and enterprise development ecosystems must be designed to facilitate the emergence and commercialization of ideas, content, creations, solutions and indigenous technology platforms.”

That would require creating a “national body to promote and nurture the development of cultural and creative industries,” the UN paper said, and “promote and support governmental, academic and private sector partnerships.”

For Egypt, the ECSS said the government needs “institutions that offer incentives to entrepreneurial endeavors, ensure skilled labor is backed by an evolving education system, accessibility to digital infrastructure and promote creativity in academia, the private sector and civil society.”

Based on her interviews, Talaat said the government needs to include orange economic activity under UNESCO to “preserve Egypt’s heritage and help push products that reflect it to international markets.”

The government also should invest in organizing overseas events and campaigns to showcase Egypt’s orange economy, Talaat said, as well as ensure enterprises operate in a more flexible business environment.

She also stressed the importance of awareness campaigns and improving the country’s education system. That growth would have a “powerful spillover effect,” Talaat said. “Growing the orange economy is vital as it elevates and develops all other economic sectors.”