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.