Egypt Independent

UAE State Minister: Evidence is clear; Egypt navigating towards success



In an interview with the Egyptian daily publication, Al-Masry Al-Youm
, H.E Dr. Sultan Ahmed Al Jaber, the UAE State Minister and head of the UAE/Egypt Liaison Office discusses the UAE’s strong ties with Egypt, Egypt’s economic sustainability following the Egypt Economic Development Conference, the importance of private sector investment, the global fight against extremism and the UAE’s unique model for social development in Egypt.
 
The United Arab Emirates and Saudi Arabia have offered economic and political support to Egypt. How do you view this support, particularly after the Egypt Economic Development Conference?
 
The UAE’s support for Egypt is firmly rooted in the conviction that Egypt’s stability and prosperity equals stability and prosperity for the region and the world. It is also a reflection of the very close relationship between the two countries that was set over 40 years ago by our founding father, Sheikh Zayed bin Sultan Al Nahyan, and has been further enhanced by our leadership. Over the years, Egypt and the UAE have embarked on various partnerships, exchanging knowledge and expertise while strengthening our bilateral ties.
 
The period of instability in Egypt, from 2010 to 2013, adversely impacted its economy and society. Based on the decades-long relationship, it was only natural that the UAE stood by Egypt to help restore the country to its rightful place, as the political, economic and social spinal cord of the region.
 
As such, and in order to support Egypt as swiftly and effectively as possible, the UAE leadership initiated a unique model of assistance, establishing a UAE/Egypt Liaison office with experts from Egypt and the UAE. Working intensively with our Egyptian partners, the office identified the key priorities needed to focus on a social development program that spanned the critical sectors of energy, housing, food security, education, healthcare and transportation. At the same time, the office worked closely with Egyptian counterparts on a medium-term economic recovery plan that identified structural reforms to stimulate the flow of foreign investments in the Egyptian market.
 
To date, the social development projects alone have created 900,000 jobs and positively impacted the lives of 10 million Egyptians.
 
Alongside the clear mandate of the UAE/Egypt Liaison office, the UAE has also contributed to the mobilization of economic and political support for Egypt through international and regional platforms, such as the Egyptian Gulf Investment Forum which was held in December 2013, and the Egypt Economic Development Conference (EEDC) that was hosted in March 2015 in Sharm el-Sheikh.  It was at the EEDC that the Egyptian government was able to secure US$20 billion, of which the Kingdom of Saudi Arabia, Kuwait and the United Arab Emirates contributed $12 billion. 
 
What is your vision for what has been accomplished economically in Egypt since June 30, 2013 and especially in the past year?
 
We have witnessed a positive change in Egypt’s economic performance. Some 5.6 percent growth was recorded in the first half of the 2014-2015 financial year (July-March), compared to 1.2 percent during the same period of the previous year. Tax returns increased by LE35 billion in the first half of the 2014-2015 financial year, amounting to LE204.9 billion – an increase of 21 percent when compared to the previous year. Foreign investments in Egypt also rose to $1.8 billion in the first quarter of the 2014-2015 financial year – a 50 percent increase in comparison to the first quarter of the preceding year.
 
Additionally, the big three-credit-rating agencies have raised Egypt’s rating and positively revised their outlooks. In October 2014, Moody’s revised their outlook on Egypt to stable and in April 2015 upgraded Egypt to B3. In December 2014, Fitch upgraded Egypt’s credit rating to B with a stable outlook, and in May 2015, Standard and Poor’s raised its outlook for Egypt to positive from stable.
 
The International Monetary Fund has also commended Egypt’s economic reforms. In November 2014, at the conclusion of the IMF’s Article IV mission to Egypt, mission chief Chris Jarvis stated, “Policies implemented so far, along with a return of confidence, are starting to produce a turnaround in economic activity and investment.” 
 
We witnessed the development of 1,600 kilometers of new roads last year, as part of a plan to create a road network of 3,200 kilometers across different parts of Egypt. The country has installed 3.6 GW of new power capacity as part of a plan to increase Egypt’s power capacity by fifty percent in the coming years.
 
What is your opinion on the project of the Suez Canal and what are your expectations for the Canal’s future development?
 
Dr. Jaber visits the Suez Canal
 
I am proud that a UAE company, the National Marine Dredging Company (NMDC) was involved in this project. The NMDC founded and led the ‘Challenge Consortium’, which includes Dutch and Belgium firms Boskalis, Van Oord and Jan De Nul, – that, in turn was able to deliver the necessary dredging in record time. I was able to visit the project site more than once in this past year and I have been impressed by the great progress and tireless efforts of all those involved, including the Suez Canal Authority, the Egyptian Armed Forces and the engineers and workers on site. This achievement validates the ability of the Egyptian people to stand in the face of adversity with great resolve, determination and success.
 
We look forward to the opening of the new Suez Canal, which will play a significant and essential role in promoting economic activity in Egypt and the region by increasing the capacity of the channel and reducing the waiting time for ships to pass. We are also looking forward to the development of the Suez Canal Development Zone, which will include ports, industrial parks and logistics hubs that will ensure continued economic growth by attracting foreign and local investments and creating new job opportunities.
 
How are you following the negotiations between the government and businessman Mohamed Alabbar regarding the new administrative capital and is there mediation from the UAE Government in this regard?
 
It is important to distinguish between private sector investments in Egypt, such as the Capital City Partners and the efforts exerted by the UAE/Egypt liaison office, which fall within the purview of intergovernmental cooperation between the two countries.
 
Nonetheless, I have been following the ongoing negotiations between Capital City Partners and the Egyptian government and have noticed some inconsistencies in the reporting. Therefore, I believe it is better to wait for the official statements at the end of the negotiations, which will naturally take some time given the scope and size of the project. We wish this important project much success in achieving the desired objectives for the future of Egypt.
 
I do, however have to say that I believe that Mr. Al Abaar's global and regional experience, know-how and successful track record in the real estate sector speaks for itself. I have no doubt that he will exert every effort to ensure that these negotiations conclude with the best possible interests of both parties in mind. These are large-scale projects that need to be rooted in economic sustainability.
 
Will the UAE provide more funding to support the Egyptian economy during the new financial year, excluding loans and investments?
 
The relationship between the UAE and Egypt is not built on loans and numbers, but on mutual respect, cooperation and common interests that benefit the two countries. Based on the synergy established with Egypt that dates back to more than four decades, we are confident this partnership will continue to flourish. What is important at this stage is to intensify the work focused on the revitalization of the Egyptian economy and development of the legislative system. This will increase growth rates and allow for new projects to open doors for economic and social prosperity, as well as new investments.
 
After several months following the EEDC, do you see that the Egyptian government has taken the necessary steps for economic reform?
 
I believe that the EEDC marked an important milestone in showcasing the Egyptian government’s commitment to implementing measures towards a stronger, more sustainable economy.  The long-term plan, as stated by Prime Minister Ibrahim Mehleb, includes fiscal consolidation measures to reduce the deficit through a gradual reduction of energy subsidies, as well as the introduction of the value-added tax, amendments to existing laws and working on attracting direct investments to crucial sectors, such as transport and power generation.
 
In other words, the vision and goals are there; what is now required is an unwavering effort and continued implementation of administrative, financial, legislative and regulatory reforms that will, in turn, contribute to the reduction of bureaucracy.
Dahshour Housing In Giza
 
Do you see that Egypt will need to deal with some of the international institutions, such as the International Monetary Fund?
 
This is a sovereign decision that is taken solely by the Egyptian government. International monetary institutions are known for their expertise in financial matters. I believe that the economic and legislative reforms initiated by the Egyptian government have begun to show positive results, as demonstrated by Article IV conducted by the International Monetary Fund.
 
Do investors in the UAE believe that the investment climate in Egypt has become attractive? What do you think of the legislative amendments, such as the new investment law, which have been put in place to attract investment?
 
Private sector investment is a realistic indication of the attractiveness of the investment climate. Today, there are over 600 UAE companies functioning in Egypt. The goal now is to increase the attractiveness of the Egyptian market. Furthermore, given the rapid population growth, there is an urgent need to create jobs through expansion and new market growth.
 
‘Continuous development’ is a concept that is widely prevalent in the world of commerce, wherein countries seek to increase their competitiveness in order to attract sustained foreign capital. As part of this priority, it is important to build an attractive environment for investment through a system of laws and to simplify procedures and create an integrated experience that will make Egypt an ideal hub for investors and new projects.
 
Egypt is exposed to terrorist attacks that have increased recently. What is your opinion on this and do you think it will affect investments?
 
 
The UAE’s position in this regard is clear: we condemn any attempt to destabilize the security and stability of Egypt. The UAE leadership has confirmed its solidarity with the Egyptian government and will stand by its side in the face of extremism and terrorism.
 
We, in the UAE, have great confidence in Egypt's ability to overcome challenges and continue to build a bright future for its children.
 
We also believe that this is a challenge that all nations must address as soon as possible. In fact, most recently the government of the UAE issued an anti-discrimination and anti-extremism law that aims at curbing hate speech and extremism. It is no longer enough to think of this war in military terms. There is a stronger, more resolute ideological war that feeds the terrorist narrative indirectly through promoting toxic, hateful and exclusive ideologies. This law is a clear demonstration of the UAE’s rejection of the culture of hate and destruction in favor of a culture of forgiveness, peace, collaboration and positive energy.
 
The UAE government contributes significantly to infrastructure projects in Egypt. What are the most important projects that you are involved in at the moment?
 
Solar power plant in Siwa
 
The development projects that have been implemented by the UAE/Egypt Liaison Office focus on vital sectors such as energy, housing, food security, education, healthcare and transportation. To date we have been able to deliver 78 fully operational family health clinics in 23 governorates across remote and rural areas, provide 100 percent of Egypt’s insulin needs through the refurbishment of the vaccination lines, deliver 100 fully equipped schools and finalize the construction of over 50,000 housing units.
         
The projects also include the construction of four bridges, the provision of 600 public transport buses, the development of 136 wastewater plants, the construction of a 10MW solar power plant in Siwa and a vocational training and placement program for tens of thousands of Egyptians.
 
As for food security, we have provided the Egyptian government with 100,00 cattle, 50,000 of which will be used for dairy production. We are also constructing 25 wheat and grain silos.