Dialogue of the President of the Arab Union for Trade Facilitation

Our goal is "easy, legitimate trade" that benefits governments and the private sector.. and eliminates smuggling

Plans to increase "inter-Arab" trade exchange.. and raise joint investment

The "black market" only appeared due to the complexity of procedures and excessive customs, fees and taxes

Egypt is the "heart" of the Arab economy.. and the new capital "exceeds the dream"

President Sisi's development projects take Egypt 100 years into the future

I expected the new capital to be a "desert under construction" but we found it to be "monuments and towers"

My advice to Egypt.. remove the "image of the government employee" from the mind of the Gulf investor

The Corona pandemic "practically demonstrated" the extent of the need for Arab trade integration

Bahrain has taken major reform steps.. and relations with Egypt are at their peak

"Arab-Arab" reconciliations serve the work of the union and joint investments

We aim to facilitate and support legitimate Arab trade outlets.. and combat illegal trade

Arab trade integration "does not rise" to the level of political and social relations

Facilitating inter-Arab trade procedures by submitting legal proposals to ministries, parliaments and bodies

We seek to facilitate customs.. and unify the specifications and standards of Arab goods to facilitate their export regionally and internationally

Dialogue conducted by - Karim Hamed

"The Arab Union for Trade Facilitation and Risk Management" is the newest union The Arab Union, which has been licensed to operate under the umbrella of the Economic Unity Council, is currently preparing to launch its work through a major Arab and regional conference that will discuss the most important issues for which it was established, most notably facilitating the movement of inter-trade, customs procedures, and unifying specifications and standards for various goods, which facilitates their movement between Arab countries. The circumstances of the Union’s establishment during the period of the spread of the “Corona - Covid 19” pandemic, which had a significant impact on international trade, shipping movement, and supply and provisioning chains, contributed to creating an additional incentive to complete the work of the Union, which is primarily concerned with contributing to raising “Arab-Arab trade exchange” and overcoming existing difficulties and laws with the aim of increasing inter-trade and joint investments between its members from all Arab countries and contributing effectively to reducing the negative effects of this pandemic on the Arab economy. Al Akhbar met with the Chairman of the Board of Directors of the Arab Union for Trade Facilitation and Risk Management, MP Ahmed Sabah Al Salloum, during his recent visit to Cairo to follow up on the launch of the young union. He also holds the position of Chairman of the Economic and Financial Committee in the Bahraini House of Representatives, a member of the Board of Directors of the Bahrain Chamber of Commerce and Industry, and Chairman of the Bahrain Society for the Development of Small and Medium Enterprises, and conducted this dialogue with him.

- Speaking of the Arab Union for Trade Facilitation and Risk Management, what is its role specifically and what are the objectives behind its establishment?

- Al-Saloum: Through my work as an economist and businessman for more than 20 years (including investments in Bahrain, Egypt and Jordan), I faced various difficulties during the import and export process, especially from some sister Arab countries, and other businessmen faced the same difficulties, which created a common incentive among a large group of Arab traders. Based on high-level contacts with our brothers in a number of Arab and Gulf countries, it became clear that there was a common desire to establish an entity that represents the Arab private sector and is concerned with facilitating trade operations, export and import, and reducing and managing risks effectively. Our vision was for this Arab group to contribute to raising inter-trade exchange and increasing joint investments. Accordingly, the idea of ​​establishing the Arab Union for Trade Facilitation and Risk Management was proposed, which is a union emanating from the Council of Arab Economic Unity. He continued, "The union also seeks to eliminate the black market, as it is the most important result of the difficulty of the process of exporting and importing legally, and the exaggeration of fees and taxes, etc., and if governments were to pay attention to this parallel market, which often results from poorly thought-out decisions, they would eliminate it, and more than that, its revenues would be added to government coffers and not to the pockets of the black market emperors, which is a widespread phenomenon in all Arab countries." To develop, improve and coordinate the work areas of its members, strengthen ties between them and contribute to achieving economic integration between all Arab countries by exercising its tasks and competencies and employing the expertise of members in enhancing and developing legitimate trade outlets through various means of awareness and education that clarify the importance of combating all forms of illegal trade. It also aims to improve the unity of legal legislation applied in Arab countries with regard to the movement of inter-Arab trade. The Union also contributes to developing national laws and legislation in Arab countries in line with international standards in securing and facilitating inter-Arab trade and international charters, agreements and treaties in the field of commercial activity emanating from the World Trade Organization (WTO) and the World Customs Organization (WCO) and ways to protect them - for the benefit of the Union members in all Arab countries, consumers, producers and the economic and legal community in general in the Arab world.

Impact of the Corona pandemic

- How did the Corona pandemic affect the work of the union or its goals?

Al-Saloum: Perhaps it was our bad luck or good luck that the establishment of the union coincided with the period of the spread of the Corona pandemic, and the pandemic caused a delay in the launch of the union for a period due to the difficulty of holding the founding meeting due to the closure of airports in some Arab countries for varying periods, and accordingly, more than one preliminary meeting was held "online" between the founding members.

He continued, saying, "But we always look at the half-full cup, and the pandemic has practically proven the extent of the need for Arab trade integration, facilitating inter-Arab trade and raising the rates of trade exchange between the member states of the union, which do not in any way rise to the level of political relations between Arab countries, as well as the close relations between the peoples of the Arab world from east to west, which we actually put in the union's work plan." The Union will strive to play an effective role in facilitating inter-Arab trade procedures by submitting legal proposals to ministries and parliaments to contribute to removing any obstacles that prevent facilitating inter-Arab trade and exploiting the recent improvement in Arab relations at the political level, whether through Gulf and Arab reconciliation, or the relative improvement in conditions in some major Arab countries such as Iraq, Syria and Yemen. We will also strive to eliminate the phenomenon of the black market and the lack of respect for intellectual property rights of Arab companies and institutions.

The main objectives of the union

-  What are the main objectives of this union?

- Representative Al-Saloum: The union works on the general objectives for which it was established, through the following specializations:

1.    Facilitating and supporting legitimate trade outlets and combating various forms of illegal trade, through developing and coordinating the areas of work of the union members from all Arab countries and strengthening ties between them to support Arab economic integration, studying aspects related to facilitating trade in all its forms and contents, describing its foundations and impact, and proposing basic lines to push it in the form of laws consistent with it and dealing with international systems, legislation and security standards. In addition to cooperating with the relevant authorities (Ministries of Transport, Trade and Industry, Health, Finance, and Customs Administrations, Food and Drug Control Authorities), Arab institutions and bodies, and specialized Arab unions in developing concepts related to facilitating trade and managing risks for legitimate and illegitimate trade, which were clarified in the Executive Program Declaration of the Greater Arab Free Trade Area under the so-called goods to which the provisions of the Executive Program of the Area do not apply, as well as cooperating with the relevant authorities to address technical and commercial problems and risks arising from legitimate and illegitimate trade.

2. Cooperation, coordination, and building strategic partnerships with the public and private sectors to increase the level of security and facilitate trade operations, by developing an action plan to encourage member companies and institutions in the Union to deal as one group in relations with official authorities (Ministry of Trade, Ministry of Transport, Ministry of Health, Ministry of Communications and Information Technology and its Systems, Chambers of Commerce and Industry, Customs Administration) in a way that enhances overcoming customs and non-customs restrictions and controlling illegitimate practices in trade, and establishing cooperative relations With governmental institutions, Arab federations, and Arab and foreign bodies whose activities are consistent with the objectives of the Union.

3. Develop training programs and hold seminars and conferences on frameworks and standards for trade security and facilitation, by providing assistance and technical support to institutions in the least developed Arab countries, including Palestine, Yemen, Somalia, Djibouti, Comoros, Mauritania, and Sudan, as well as cooperating with official bodies in supporting national programs that would reduce harmful practices to trade, including, but not limited to: smuggling, tax evasion, and disruption of competition conditions, as they threaten the growth of the national economy.

"The Administrative Capital"... A Huge Challenge

- As part of your recent visit to Cairo, I learned that you visited the New Administrative Capital. How did you see the project and how do you see investment opportunities through it?

- Al-Saloum: First, I have not visited Cairo for about 8 or 9 years, except for one visit as part of the delegation of His Majesty King Hamad bin Isa Al Khalifa, King of Bahrain, for a few days, and I am "amazed in every sense of the word", whether by what I saw in Cairo in terms of the unprecedented volume of construction and infrastructure and real estate projects extending to all its edges, east and west, or what I saw in the New Administrative Capital in terms of construction on the ground and organization and planning at the highest level of modernity, efficiency and technology. We did not expect this level of achievement in this short period of time. We expected to go to a desert area under initial planning and construction, and we found giant towers and monuments at the highest level of construction, creativity, modernity and technology.

He continued, "The administrative capital is a giant challenge, not just a giant city. I appreciate this challenge because in Bahrain we have gone through a similar great challenge and were able, through the cohesion of the leadership, the people and the representatives, to achieve distinguished successes on various levels. This project truly confirms that Egypt is taking practical steps towards the future, away from slogans and media speeches. In other countries, this city takes a minimum of ten years to reach this level of achievement, work and creativity. Reaching this level of actual achievement within a period of time estimated at about 3 years confirms that there is tremendous work being done on the ground, and there is seriousness from the political leadership to achieve work that Egyptians and Arabs are proud of."

I believe that what I saw of work on the ground during this short visit to Cairo makes me confident that President Sisi's development projects, especially with regard to infrastructure and the new administrative capital, with what I saw of technical, organizational and planning excellence at the highest level, will take Egypt 100 years towards the future.

“In fact, admiration for the capital was not limited to the giant constructions and buildings, but the ‘idea’ itself and moving from the current capital, Cairo, with all its well-known conditions to broader and more modern horizons is in itself a very positive thing that serves the state and investment in the short and long term as well, and relieves the pressure on Cairo in terms of population, services and traffic. Also, the idea of ​​‘self-financing’ the project, as we learned through offering plots of land to real estate and commercial investors at good prices to finance the infrastructure and services, was ‘very striking’ and impressed me personally, because financing in such giant projects is a ‘cornerstone’ for the project and its success is a ‘guaranteed certificate of success’ for the project,” he continued.

Egypt and Bahrain.. and 10 agreements

- In your position as Chairman of the Financial and Economic Affairs Committee in the Bahraini House of Representatives, how do you view trade relations between Egypt and Bahrain? Do they, in their current state, rise to the level of the distinguished political relations between the two brotherly countries?

- Representative Al-Saloum: Of course, currently there is no doubt that the economic and investment relations between the two friendly countries do not at all rise to the distinguished level enjoyed by the relationship between the wise political leadership in Bahrain and Egypt, especially since His Excellency President Abdel Fattah El-Sisi assumed responsibility for the country, and even at the popular level, the relations between the two peoples are more than excellent and there is indeed great love between the people of the two countries, and currently there is continuous cooperation and mutual visits at all levels and more than that there is a keenness for more cooperation, and there is no better evidence of this than the signing of 10 diverse economic agreements between the two sides during the recent visit of the Bahraini Minister of Industry, Commerce and Tourism to Cairo, Mr. Zayed bin Rashid Al-Zayani, which took place a few weeks ago. We in the House of Representatives are always keen to improve joint economic relations with Egypt and with Arab countries in general through "legislation", which is the official legal framework for any commercial relationship, and we hope that the coming periods will witness more development in this relationship in a positive way. At the private sector level, investment movement between the two brotherly countries has witnessed remarkable activity in recent years, praising the volume of trade exchange between the two sides, which amounted to about 370 million US dollars during the first half of last year 2021, compared to nearly 163 million US dollars during the same period in 2020, an increase of 127%.

Sectors eligible for investment

- What are the most prominent sectors nominated for investment cooperation between the two countries? Especially in the administrative capital?

Al-Saloum: There are promising opportunities for mutual investment in many sectors, but due to my bias towards the small and medium enterprises sector, I see that there is great interest in both countries in this sector, which holds broad prospects for growth and development for small companies in several sectors such as light and manufacturing industries, restaurants, cafes, tourism, and others. I have previously dealt with Her Excellency Minister Nevin Gamea, the Egyptian Minister of Industry and Trade, more than once since she was responsible for this sector, and I know very well the extent of the attention that Egypt gives to small companies, and the interest in Bahrain is also equal and increases because the wise leadership in the Kingdom is fully aware of the importance of this sector and its vital role in developing the economy, especially industrial and technology companies.

He added, "The stock exchange in Egypt holds very important opportunities for foreign investors, but its news is always negative and repels investors, especially with regard to the increase in taxes and fees in the recent period, which was reflected in its performance." He continued, "Regarding the new administrative capital, I see that real estate investment opportunities come at the top of the list, of course. We have in Bahrain real estate developers at the highest level, as well as investors and banks that have a wide interest in real estate investments, and fruitful cooperation is possible in this regard, not to mention other commercial investments available in the capital in all its sectors, whether restaurants, modern cafes, retail, hotels, technology, and others."

The difference between the two experiences...and my advice to Egypt

- What is the difference between the Egyptian and Bahraini experiences in attracting investments? Is there any advice you can offer to those in charge of investing in Cairo, as an investor in Egypt?

- Al-Saloum: Bahrain and Egypt are two different economic models. The first has a small economy that depends on oil, some services, and the development of the banking sector. The second has a giant economy and a long history in heavy and light industries, agriculture, tourism, mining, and others. Therefore, there is a huge difference in the investment experience and in the incentives provided to investors. Egypt has an abundance of land, for example, but Bahrain is a small island with a limited area, and the land allocated for construction is very scarce compared to Egypt. Based on these data, the difference in the experience becomes apparent.

He continued, "The investor has become a rare commodity that everyone competes for, because it is money that is pumped directly into the country's economy and revives it, and everyone is looking for it and competing for it because it is a cautious element that fears for its interests and money. Bahrain grants very large incentives to foreign investors, such as customs exemptions on raw materials for factories, tools, machines, etc., laws that facilitate the transfer of profits, other incentives related to taxes, and we only have one tax in Bahrain. There is a Bahraini focus on attracting the investor in the sectors of industry, trade, banking, and technology, but we do not focus much on the real estate investor who is attracted by himself due to the attractiveness of the real estate sector in Bahrain, which is small in area. Perhaps the opposite is true in Egypt, where there are various taxes on traders and manufacturers, and there are greater incentives for the real estate investor, and this stems from the difference in the economic nature of the two countries, as I explained." He added, "My advice to my family and brothers in Egypt is first to have clarity and "flexible" legislative stability regarding investment because the investor is anxious by nature and fears radical change that affects his investment accounts. Second, they must strive to remove any negative image of "routine" and the complexities of a few employees in the government apparatus. My love for Egypt prompts me to advise them and I hope that any confusion related to the difficulty of investing in Egypt will be removed. I know very well that important steps have been taken in Egypt in recent years, and there are opportunities in various economic sectors such as industry, tourism, real estate, and others. I also realize that the Egyptian stock market (the stock exchange) has great opportunities for investment, but there are also many taxes and more fees, and this in light of the current investment competition may keep investors away relatively." He added, "Bahrain also opens its doors to the Egyptian investor and all Arab brothers, and we have Egyptian investors who I believe are ranked first in the Arab world after the exclusion of the Gulf countries, and we hope for more of them, of course."