The Secretary-General of the Union of Arab Chambers, Dr. Khaled Hanafi, confirmed during his speech at the “Arab-German Business Forum: Building Bridges between Germany and the Arab World,” which was held in the German capital, Berlin, during the period June 4-5, 2024, within the fourth session: “Beyond Borders: Taking Advantage of Investment Opportunities in Arab Private and Free Zones - Strategic Insights for German Companies,” “The global economic landscape is transforming, and the Arab world is emerging as a strategic center for international investment, through the advanced free economic zones located in many countries of the region. These regions offer a unique and attractive offer for German companies seeking to expand their business and access and benefit from exciting new opportunities.”
The Secretary-General of the Federation explained, “The special economic zones in the United Arab Emirates contribute significantly to non-oil foreign direct investment flows. In Dubai alone, foreign direct investment inflows amounted to about $5.7 billion in 2020. In the Kingdom of Saudi Arabia, special economic zones are part of Vision 2030, which aims to reduce the unemployment rate from 11.6 percent to 7 percent by 2030.”
Dr. Khaled Hanafi stressed that “special economic zones (SEZs) and free zones (FZs) in Arab countries offer a set of economic benefits that aim to attract foreign investment and strengthen the economy. In contrast to the global average corporate tax rate of 23 percent, special economic zones and free zones offer significant tax exemptions in Arab countries.”
He noted, “Many special economic zones and Arab free zones are distinguished by their key locations, which facilitates effective global trade. For example, the Suez Canal in Egypt provides access to one of the busiest maritime routes in the world. Also, the Jebel Ali Free Zone in the UAE greatly facilitates international trade as it enjoys a strategic location at the crossroads of the East and the West, which connects companies with more than 2 billion consumers around the world.”
The Secretary-General of the Federation stated that “special economic zones and Arab free zones give special advantages to foreign investors by granting them 100 percent ownership. In addition, there are no currency restrictions, as profits and capital are fully returned without currency restrictions.”
He believed that “for a mutually beneficial future between Arab countries and Germany, it is necessary to encourage joint projects by supporting more comprehensive free trade agreements that reduce customs tariffs, simplify customs procedures, and enhance the free flow of goods and services. Partnerships must also be established between universities and research institutions, especially in the fields of renewable energy, water, and digital technologies. In addition to Germany's cooperation with Arab countries that seek to diversify their energy sources by establishing projects that contribute to preserving the environment, such as managing water resources and preventing desertification.”
In his speech at the Round Table: Investment Opportunities in the Arab Republic of Egypt, within the framework of the activities of the Arab-German Business Forum, the Secretary-General of the Federation noted that “the Egyptian economy is considered one of the most diversified economies in the Middle East region, as the tourism, agriculture, industry, and services sectors each contribute in proportion to almost equal in gross domestic product.” He explained that “Egyptian foreign reserves amounted to 34.12 billion US dollars in May 2024, while Egypt’s population is more than one million people, making it the largest internal market in the Arab countries, which represents a great opportunity for local and international companies to enter and invest in Egypt.”
He pointed out that “Egypt is one of the largest producers of wheat, rice, cotton, fruits, and vegetables, and the contribution of these sectors to the gross domestic product reached 13.6 percent in 2023. Egypt is also a major tourist destination thanks to its ancient monuments and picturesque beaches. The tourism sector contributed to the GDP by 12.5 percent in 2023. In addition, Egypt has a diversified industrial sector that includes the textile, food, and chemical industries, and its contribution to the GDP reached 21.78 percent in 2023.”
He said: Egypt has important reserves of oil and natural gas. Its contribution to the GDP reached 8.1 percent in 2023. The services sector is the largest sector in the Egyptian economy and includes trade, transportation, communications, and insurance. Its contribution to the GDP reached: 44.1 percent in 2023.
The Secretary-General of the Union noted that “the Egyptian economy has achieved positive growth rates despite global challenges, as the gross domestic product recorded a growth of 3.3 percent in 2022, with expectations of achieving higher growth in the coming years. The Egyptian government succeeded in floating the Egyptian pound in 2016, which improved economic stability and attracted foreign investment, as Egypt occupied an advanced position in the Doing Business reports, and advanced in several indicators as a result of the structural and legislative reforms undertaken by the government. Egypt has witnessed a noticeable influx of foreign direct investments, especially in the energy, infrastructure, and real estate sectors.”
Dr. Khaled Hanafi pointed out that Egypt has witnessed an expansion in digital government services, as the Egyptian government has expanded the scope of digital government services to improve the efficiency of public services and reduce bureaucracy. Many initiatives have also been launched to support entrepreneurs and startup companies, including business incubators and growth accelerators. In addition, Egypt maintained its good credit rating thanks to sustainable financial and monetary policies. The Egyptian government was able to control inflation rates through effective monetary policies.
He considered that "these achievements reflect the great efforts made by Egypt to achieve sustainable economic development and improve the standard of living of citizens. It is expected that the Egyptian economy will continue to grow and develop thanks to promising economic policies and major national projects." He expected the Egyptian government to continue implementing structural reforms to improve the business environment and attract foreign investments, as the Egyptian economy has tremendous potential for growth and development in the future. This is thanks to its strategic location, huge internal market, natural resources, young workforce, economic reforms, and major national projects. Thanks to these factors, the Egyptian economy is expected to play an important role in driving economic growth in the Arab region and Africa.
The Secretary-General of the Union, Dr. Khaled Hanafi, revealed during the third session of the Arab-German Economic Forum, “The dynamics of artificial intelligence: dealing with risks and opening opportunities for business.” The expected size of global artificial intelligence by 2030 will exceed $17.7 trillion, while up to 85 million jobs could be lost globally due to automation by 2025, compared to 97 million new jobs that could be created globally during the same period.
The Secretary-General of the Union pointed out that “the Arab world is witnessing a boom in the adoption of artificial intelligence in various sectors, as Arab governments invest in research and development in the field of artificial intelligence, strengthen innovation centers, and attract global technology giants. Artificial intelligence represents a strategic opportunity for Arab economies to overcome dependence on traditional sectors such as oil and gas.”
Khaled Hanafi said, “Automation powered by artificial intelligence can simplify repetitive tasks and free up human capital for higher-value activities. This allows employees to focus on strategic initiatives as AI algorithms can analyze large sets of data that help make better business decisions. The McKinsey Global Institute estimates that the process of making decisions based on data supported by artificial intelligence, adding up to $1.2 trillion to the Middle East’s GDP by 2030.”
He stressed that "the Arab world has a unique opportunity to benefit from artificial intelligence to achieve sustainable growth and inclusiveness, and partnerships between governments, companies, and research institutions are crucial in terms of enhancing cooperation in the field of artificial intelligence research. Investing in digital infrastructure is also essential for seamless integration of AI within companies.”
Source (Union of Arab Chambers)
