Prosperity zone

Abdel-Moneim Said
Wednesday 6 Oct 2021

Comments on Saudi National Day.

On 23 September, Saudi Arabia’s National Day was an occasion for Cairo to review progress in its relations with Riyadh in areas ranging from mutual economic interests to cooperation on regional and international issues. What this reflects most clearly is the achievements the two countries have made in their respective Vision 2030 sustainable development strategies, launched within months of each other in 2015. It also casts into relief their development orientation towards the Red Sea and the Gulf of Aqaba, where a vast mutual prosperity zone is emerging and nurturing the aspiration to expand development efforts geographically and diversify resources and sources of income. Some months ago I visited Taba from where you could almost reach out and touch Jordan and Saudi Arabia. It was there that the concept of a mutual prosperity zone began to germinate, precisely because it seems so logical and timely.

Saudi Arabia is the second largest investor in Egypt, with over $6 billion worth of investments in more than 500 projects. Egypt ranks the second largest recipient of business operating licences in Saudi Arabia in 2020. Riyadh issued some 160 licences to Egyptian firms that year. Egyptian investments in the kingdom came to $1.4 billion by the end of 2020. This is a positive indicator, compared to the 42 per cent drop in global investment flows from 2019 to 2020, according to the UN Conference on Trade and Development (UNCTAD). There are 6,280 Saudi companies operating in Egypt and registered with the Egyptian Investment Authority. Their combined investment is around $20 billion. The volume of bilateral trade has grown steadily, year by year, topping $5.5 billion in 2020. Saudi-Egyptian exports climbed to $561.7 million in the first quarter of 2021, up from $412.3 million in the same period in 2020, or a rise of 13.9 per cent. The overall aim is to increase investments to $50 billion over the next five years and, generally, to bolster bilateral trade and joint ventures in diverse developmental fields.

One reason for such progress is the maritime border demarcation agreement signed between the two countries five years ago. The agreement had far-reaching economic and strategic implications as it freed the two sides to exploit their respective economic zones in the Red Sea more fully. This, in turn, stimulated major demographic shifts, which can be seen in Egypt’s development boom in the Sinai, starting from the area east of the Suez Canal. New urban centres are sprouting too, in tandem with tourist projects, mining industries, oil and gas discoveries in the Red Sea and opening horizons for linkages with their Eastern Mediterranean counterparts. On the Saudi side, they have begun to tap the economic and tourist potential of the more than 80 islands that sprinkle the Red Sea. New urban developments are emerging on the Saudi Red Sea coast as well. Of prime importance are Neom, which is visible from the Egyptian coast, as well as Al-Ula and Tabouk in northwestern Saudi Arabia. 

The maritime agreement also provided an opportunity for oil and gas exploration and drilling activities for the first time in Egypt’s economic waters in the Red Sea. At the same time, the Saudi Tourist Authority has been inspired by nearby Hurghada, Sharm El-Sheikh and Marsa Alam to launch the “Saudi Winter” tourist season for R&R holiday makers in Saudi Arabia and the Gulf, taking advantage of the pristine waters and golden beaches in Haql, Tabouk and other parts of the Saudi Red Sea coast. 

 Seven years of developmental achievements on the shores of the Red Sea and the Gulf of Aqaba have brought us to the threshold of a mutual prosperity zone straddling these bodies of water. From the Saudi side it is fed by the economic thrust westward in the framework of the Saudi drive for economic diversification into tourism (beyond religious tourism), mining, port, transportation and logistical services. Since it was possible to establish the Eastern Mediterranean Gas Forum, which has grown to include seven members keen to cooperate on the production, transport, liquefaction and export of natural gas, it is easy to picture a similar cooperation forum in the northern Red Sea. With Egypt and Saudi Arabia at its core, this could start in the realm of tourism and eventually branch out in numerous directions such as maritime services and oil and gas production, eventually complementing the Egyptian industrial corridor in the Suez Canal zone. 

The establishment of King Salman University in the Sinai and King Abdullah University in Al-Galala near Ain Sukhna symbolise the new possibilities for interaction in education, scientific research and technological development. Noem, the construction of which is progressing rapidly, is another symbol of the potential for interaction, especially in the field of scientific research and development and cultural exchange.  

All roads in Egypt and Saudi Arabia lead to the Red Sea, as they say these days. Urban development is moving out of the narrow confines of the Nile Valley to the expansive shores of the Red Sea and Mediterranean. On the Saudi side, the trajectory is towards the northwest and western coast of the peninsula. Saudi citizens and residents have growing choices for recreation tourism at home in their national cultural environment. 

Despite the challenges of the Covid-19 pandemic, Egypt and Saudi Arabia have pressed ahead with their development drives in urban expansion, economic reform, diversification of resources and other domains. No less important are the advances in intellectual reform, both religious and secular. Although the end of the pandemic is not yet in sight, it is still possible to foresee the emergence of the forum for regional cooperation, the founding core of which is centred on the current processes of progress and development in Saudi Arabia and Egypt. Thanks to the current trend to reduce regional tensions, pave the way for reconciliation between regional adversaries, promote the Libyan political process and build bridges of communication through Jordan to Syria and to advance other conflict resolution processes, a new realm is opening up for bilateral and multilateral cooperation. In this framework, the growing space for innovative cooperation and mutual prosperity will greatly strengthen the nation state and its legacy in the region. 

I have written quite a bit on the need for regional solutions to regional problems. I have no doubt that the key resides in a major project that stands apart from previous Arab experiments. This one will succeed where the other have failed because it derives its impetus from the nation state and its resolve to compete dynamically and effectively in the global race to progress.

*The writer is chairman of the board, CEO and director of the Regional Centre for Strategic Studies. 

*A version of this article appears in print in the 7 October, 2021 edition of Al-Ahram Weekly

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