Last August five-way summit in Al Alamein, northwest of Cairo on the Mediterranean coast, was not the first time that the leaders of the five Arab countries; the UAE, Jordan, Iraq, Bahrain and Egypt had met to coordinate positions and discuss regional challenges.
There have been similar meetings, at various levels and with fewer participants in the recent past. But what is important about the recent summit was the role of the UAE as an active member of the promising economic coalition that was launched a few years ago by Egypt, Jordan and Iraq.
In a fast changing regional and global scene, the three countries decided to focus on economic complementarity with an aim of boosting investments, trade and sharing resources. Concentrating on common denominators, the countries saw an opportunity to come closer together at a time when the region faces the challenge of fragmentation.
But inherent problems as well as regional challenges remain. Egypt, with huge economic potential, has been rocked by the reverberations of the war in Ukraine. As the largest importer of grain, the country is grappling with broken supply chains, a fall in tourism revenue and a bulging foreign debt.
It is now being pressured by the IMF to devalue its currency as a condition for additional aid and much needed loans. Currency devaluation, as the country deals with soaring inflation, could lead to more troubles. Much of Egypt’s foreign debt is due to investments in the country’s infrastructure and projects that will boost the economy and the GDP over time.
Egypt needs smart investments and the UAE is stepping in. Last August it was announced that the value of the trade exchange between Egypt and the UAE had increased to about $1.2 billion during the first quarter of 2022, an increase of 1.4 per cent over the same period in 2021.
The Egyptian authorities announced that the value of Emirati investments in Egypt increased to $1.9 billion (Dhs6.98bn) during the first half of the 2021-2022 fiscal year, compared to $712.6 million (Dhs. 617bn) during the same period of the fiscal year 2020-2021, an increase of 169.1 per cent.
Furthermore, in May the Secretary-General of the UAE International Investors Council (UAEIIC) Jamal Saif Al Jarwan, was quoted as saying that the UAE is looking forward to boosting its investments in Egypt to $35 billion over the coming five years after investments had reached $20 billion by this year.
The new investments will cover many sectors including logistics, telecommunications, oil, renewable energy and maritime activities among others.
For Jordan, a country with historical ties to the UAE, the flow of foreign investments is key to battling the biggest challenge it now faces: unemployment which stands at roughly 23 per cent and where it reaches almost 40 per cent among youth.
With highly educated young people, Jordan is making headway in renewable energy, about 24 per cent of its energy needs are now green, and in pharmaceuticals, fertilisers and garments. In fact, Jordan’s phosphate and potash industries have done well in the wake of the war in Ukraine.
Once more the UAE stands out as one of the biggest investors in the Jordanian economy. This week, UAE ambassador to Jordan, Ahmed Al Balushi, said that economic relations between Jordan and the UAE are flourishing, and that the volume of his country’s investments in the Kingdom exceeds $17 billion.
Major UAE investments
Balushi added that the UAE investments cover many sectors, such as energy, technology, military industry, tourism, education, transportation, water, agriculture, and infrastructure, adding that the volume of trade between the two countries currently stands at $3 billion annually.
Iraq faces its own multifaceted problems. Two decades of war and political chaos have kept this oil rich country from recovering. But like Jordan and Egypt, the UAE believes it is important to support Iraq as it struggles in the wake of economic and political uncertainty.
Last year the UAE announced a $3 billion investment deal with Iraq in a fresh bid to strengthen the economic and investment relations. Iraqi-UAE Business Council is being established to streamline all the measures in the service of the two nations.
Once Iraq rids itself of political infighting, it promises to be a major hub for investors as it seeks to rebuild its infrastructure.
This new coalition represents a huge investment opportunity for the UAE, which is now becoming the driving engine of the region.
With its experience in managing successful investments in almost every sector, there is little doubt that the UAE’s contribution to the stability of Egypt, Jordan and Iraq will be fundamental and consequential.
Osama Al Sharif is a journalist and political commentator based in Amman.