The UAE, Egypt and Jordan have entered into an industrial partnership aimed at boosting sustainable growth and exploring opportunities for joint investments in priority sectors, in a move to bolster Arab economic integration.
A $10 billion investment fund has been allocated and managed by Abu Dhabi's holding company ADQ to accelerate work on the partnership across five priority sectors, Dr Sultan Al Jaber, Minister of Industry and Advanced Technology, said in a joint conference on Sunday in Abu Dhabi. This is based on the directives of the President, Sheikh Mohamed, he said.
The partnership identified five sectors of mutual interest to the three countries, including petrochemicals; metals, minerals and downstream products; textiles; pharmaceuticals; and agriculture, food and fertilisers.
The new initiative will establish large joint industrial projects, create job opportunities, contribute to increasing economic output, diversify the economies of the three countries, support industrial production and increase exports.
The partnership was announced in the presence of Sheikh Mansour bin Zayed, Deputy Prime Minister and Minister of Presidential Affairs.
"Developing the industrial sector in the participating countries will enable industrial growth in the three nations, diversify the economy and increase the sector's contribution to the gross domestic product," he said, according to a Wam report. "This partnership also reflects the ability of the countries in the region to strengthen their relations and launch new projects and industries within the framework of an integrated industrial system that provides promising opportunities for future generations."
In his speech, Dr Al Jaber said the "ambitious partnership will lead to the creation of industrial opportunities worth billions of dollars by identifying joint industrial projects in the future, focused on creating world-class competitive industries with the highest standards of quality, especially in priority sectors".
The deal comes amid the UAE's efforts to support the growth of the local industrial sector, enhance its role in stimulating the national economy, and double its contribution to gross domestic product to Dh300bn ($82bn) by 2031.
UAE, Jordan and Egypt collectively have a GDP of about $765bn and more than 60 million young people, Dr Al Jaber said.
In the agriculture and food sector, there is an opportunity to increase the production of wheat and corn in the three countries to about 30 million tonnes annually, from 16.5 million tonnes currently, he added.
The metals sector — specifically aluminium, iron, silica and potash — provides opportunities for projects worth $23bn through high-value manufacturing of products such as glass, electrical wires, automotive components and solar panels, Dr Al Jaber said.
The combined contribution of the petrochemical industry to the GDP of the UAE, Egypt and Jordan economies was $16bn in 2019.
“We will now create promising opportunities for the development of this sector and its related industries, which are valued at more than $21bn,” Dr Al Jaber said.
The $10bn investment fund underscores ADQ's commitment to the industrial partnership "as we seek to achieve sustainable economic growth for our three nations", Mohamed Alsuwaidi, managing director and chief executive of ADQ, said. "By leveraging the expertise of ADQ and its portfolio companies, the partnership will enable us to unlock opportunities for joint investment in priority industrial sectors and develop a robust and integrated industrial infrastructure whilst cementing the UAE’s position as leading industrial nation.”
Emirates Development Bank (EDB) will back the initiative, offering a range of flexible direct and indirect financing solutions to UAE-based companies seeking to unlock the opportunities of the new partnership, it said in a separate statement.
This includes capital expenditure financing for expansion or facility upgrades in addition to greenfield and brownfield project financing. The bank will also offer financial support for integrating advanced technologies, digitisation of operations and investments into alternative, renewable or clean energy sources, it added.
The partnership reflects the UAE's goal to "transform the national industrial sector into a long-term, sustainable engine of growth, which it will achieve by fostering new sectors that respond to the needs of the future", Ahmed Al Naqbi, chief executive of EDB, said.
The joint conference was also attended by Egyptian Prime Minister Mostafa Madbouly and Jordan’s Prime Minister Bisher Al Khasawneh in Abu Dhabi, where details of the Industrial Partnership for Sustainable Economic Growth were revealed.
"We meet today in an important moment that represents a differentiating mark in the joint history of the Arab world," Mr Madbouly said.
"The partnership we are signing today is a realistic embodiment and practical execution of an important goal for all of us, which is the pursuit of Arab economic integration, a goal that was present in the minds of the founding fathers of the Arab League in the 1940s."
The three-way partnership is an "inspiring model" for turning the current economic and geopolitical global circumstances from challenges into opportunities for the taking, he said.
The move seeks to bolster the integration, connectivity and mutual co-operation between the economies of Arab countries, the Egyptian prime minister said.
"There is a lot of hard work and persistent effort and unconventional approach — with an emphasis on unconventional — that we all need to exert in the coming period to accelerate the execution of projects under the initiative precisely and within specific timeframes so that they can achieve growth," he said.
Egypt's economy is projected to expand 6.2 per cent in the 2021-2022 fiscal year, one of the best economic growth rates during this period, Mr Madbouly said.
The country's industrial sector has grown massively, despite global crises including from the Covid-19 pandemic, whereby it issued 50,000 new operating licences for factories over the last five years that created 2.5 million jobs during the period, he said.
Non-oil exports grew 20 per cent in 2021 to more than $32bn, despite the pandemic. Non-oil exports in the first three months of 2022 grew 21 per cent, underscoring the industrial sector's strength and the overall economy's resilience, Mr Madbouly added.
The Egyptian government has also announced in the last few weeks a bundle of tax and non-tax incentives to attract FDI into the economy, particularly in the sectors of renewable energy, green energy, integrated industries and advanced technologies.
It also signed in the last fee weeks six initial pacts with some of the biggest consortia to produce green hydrogen and green ammonia in Egypt in the coming period, Mr Madbouly said.
The Jordanian prime minister said the new partnership will have a strategic and deep impact on the three countries, with the continued sustainable flow of commodities without any bottlenecks or price instability.
It will also lead to benefits including economic diversification, reduction in the cost of imports and job opportunities for their nationals, Mr Al Khasawneh said.
Jordan's industrial sector is undergoing rapid development and modernisation, attracting investments and contributing nearly 24 per cent to the country's GDP, he added. It also comprises 90 per cent of total exports, attracts 70 per cent of FDI and employs 21 per cent of the total workforce.
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The Owo building is 14 storeys high, seven of which are below ground, with the 30,000 square feet of amenities located subterranean, including a 16-seat private cinema, seven lounges, a gym, games room, treatment suites and bicycle storage.
A clear distinction between the residences and the Raffles hotel with the amenities operated separately.
BUNDESLIGA FIXTURES
Saturday, May 16 (kick-offs UAE time)
Borussia Dortmund v Schalke (4.30pm)
RB Leipzig v Freiburg (4.30pm)
Hoffenheim v Hertha Berlin (4.30pm)
Fortuna Dusseldorf v Paderborn (4.30pm)
Augsburg v Wolfsburg (4.30pm)
Eintracht Frankfurt v Borussia Monchengladbach (7.30pm)
Sunday, May 17
Cologne v Mainz (4.30pm),
Union Berlin v Bayern Munich (7pm)
Monday, May 18
Werder Bremen v Bayer Leverkusen (9.30pm)
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Off-roading in the UAE: How to checklist
Key figures in the life of the fort
Sheikh Dhiyab bin Isa (ruled 1761-1793) Built Qasr Al Hosn as a watchtower to guard over the only freshwater well on Abu Dhabi island.
Sheikh Shakhbut bin Dhiyab (ruled 1793-1816) Expanded the tower into a small fort and transferred his ruling place of residence from Liwa Oasis to the fort on the island.
Sheikh Tahnoon bin Shakhbut (ruled 1818-1833) Expanded Qasr Al Hosn further as Abu Dhabi grew from a small village of palm huts to a town of more than 5,000 inhabitants.
Sheikh Khalifa bin Shakhbut (ruled 1833-1845) Repaired and fortified the fort.
Sheikh Saeed bin Tahnoon (ruled 1845-1855) Turned Qasr Al Hosn into a strong two-storied structure.
Sheikh Zayed bin Khalifa (ruled 1855-1909) Expanded Qasr Al Hosn further to reflect the emirate's increasing prominence.
Sheikh Shakhbut bin Sultan (ruled 1928-1966) Renovated and enlarged Qasr Al Hosn, adding a decorative arch and two new villas.
Sheikh Zayed bin Sultan (ruled 1966-2004) Moved the royal residence to Al Manhal palace and kept his diwan at Qasr Al Hosn.
Sources: Jayanti Maitra, www.adach.ae
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The specs: 2018 Maxus T60
Price, base / as tested: Dh48,000
Engine: 2.4-litre four-cylinder
Power: 136hp @ 1,600rpm
Torque: 360Nm @ 1,600 rpm
Transmission: Five-speed manual
Fuel consumption, combined: 9.1L / 100km
