Turning the Suez Canal Economic Zone into a magnet
Cairo - Afew years ago, thousands of kilometres of land around the Suez Canal were mostly desert. Sailors on ships transiting the canal could see nothing but a barren landscape.
There is a great change now, driven by Egypt’s plan to turn the area into one of the world’s most important economic zones and the engine of the country’s economy.
“The Suez Canal Economic Zone has whatever it takes to turn it into a top international economic zone,” said Ahmed Darwish, chairman of the zone authority. “Its location puts it in the middle of the world and at the entrance of markets containing 1.2 billion consumers.”
Darwish, a former cabinet minister who worked to automate services offered at government offices, has made his office a mecca for investors. He travels the world carrying brochures, plans, pictures and statistics that explain to investors the need to reserve a place at the Suez economic zone.
He said economic activities of all types would have a place in the zone.
“Each area in the economic zone has its own distinct nature,” Darwish said. “Some areas fit labour-intensive industries and others fit electronic industries.”
Darwish, 58, is eloquent and soft-spoken with a doctorate in computer engineering from the University of California. He is the man on whom hopes are pinned to build Egypt’s new economy.
Months before Darwish was appointed chairman of Suez Canal Economic Zone Authority, in November 2015, Egypt dug a parallel channel to the Suez Canal to allow two-way transits.
The parallel channel cost cash-strapped Egypt close to $8 billion, money that came from the pockets of ordinary Egyptians who invested in government-backed investment bonds.
Egypt is building a multibillion-dollar new capital, between the Suez Canal and Cairo. Apart from aspiring to be Egypt’s new financial and administrative nerve centre, the new capital is expected to be the administrative centre for investments in the Suez economic zone.
Egypt, economists said, has focused its attention on making the Suez Canal region the main driver of the economy.
“The Suez Canal region is best placed to compete with top economic zones in the world,” said Hala Abou-Ali, an economics professor at Cairo University. “We only need to stay focused, complete the general design of the region according to schedule and not let economic hardships sap our determination or hamper our plans.”
Divided into four zones with two of them having their own ports, the Suez Canal Economic Zone is 461,000 sq. kilometres.
Darwish said the zone does not seek to rival other economic zones but to complement them. His authority has hired an international consultancy to market opportunities in the Suez Canal region.
The economic zone has secured investment contracts worth $15 billion. A US pharmaceutical company plans to establish a large factory in the region. The Chinese are planning to build a major industrial zone in the area as are the Russians.
“Those investing in the economic zone stand to benefit from trade deals between Egypt and other countries,” Darwish said. “Some of the agreements eliminate customs duties for imports from Egypt.”
Darwish said infrastructure work in the four areas of the Suez Canal Economic Zone should be completed within 15 years.
Equally enthusiastic are economists closely watching the man trying to attract investments to the zone. They said, however, Darwish’s dream can evaporate just like his dream for automating operations in government offices did, if his authority does not simplify investment procedures.
“This will be the only guarantee that investors will be encouraged to come,” said economist Mostafa Badra. “Investors do not need to spend ages to finalise investment paperwork and set up their projects.”
Investment procedures in the Suez Canal Economic Zone are a model of simplicity, Darwish said. His authority has the right to make decisions independently from Cairo. This, he said, ensures that decisions on investment projects are made quickly and without administrative complications.
“Our authority follows the one-stop store system, which means that investors will finalise all procedures at one and the same place,” Darwish said. “We only work to create an environment in the economic zone conducive to real business and I think we are succeeding in this.”