Building Egypt as a Strategic Hub for the Global South

Prof. (Dr.) Hebatallah Adam
Professor of Economics, Associate Dean for Doctoral Studies at Jindal School of International Affairs, Founder and Director of Jindal Centre for the Global South, O.P. Jindal Global University

 

Diplomatist spoke with Prof. (Dr.) Hebatallah Adam, on how countries like Egypt can recalibrate their trade, industrial, and financial strategies amid today’s shifting global architectures. In this wide-ranging conversation, she highlights how South–South cooperation, green industrial policy, and diaspora linkages can be leveraged to transform geography into genuine competitiveness. She underscores the importance of institutional reforms, transparent governance, and digital trade facilitation in positioning Egypt—and other Global South economies—as reliable and strategic supply-chain hubs rather than mere transit corridors.

1. You have written extensively about the shifting architectures of South–South cooperation. Given recent Belt-and-Block realignments, how should countries like Egypt recalibrate their trade and diplomatic strategies to avoid being a transactional partner and instead become a strategic node in emergent Global South supply-chains?

The Belt-and-Block realignments extend beyond great-power rivalry; they present an opportunity for countries such as Egypt to establish themselves as vital hubs within Global South supply networks, rather than merely as transit routes.

The critical challenge is to transform geography into competencies. For Egypt, this entails three priorities:

• Firstly, develop the SCZone — nonetheless, insist on value enhancement. Incentives must be linked to local content, technology transfer, and supplier development to ensure that investors establish genuine manufacturing rather than mere warehousing.
• Secondly, utilise AfCFTA and continental corridors for real markets expansion. By streamlining origin regulations, standardising criteria, and establishing corridor partnerships, Egypt can transform African connectivity into economies of scale.
• Third, diversify and ensure resilience for the future. Avoid exclusive dependence on China or BRICS. Engage many partners across Europe, the GCC, India, and Africa to secure investments in green hydrogen, renewable energy, and digital hardware, which represent the forthcoming growth catalysts.

Primarily, predictability represents our most significant competitive edge. By ensuring transparency and enforceability in customs, digital single windows, and laws, we mitigate risk premiums and build trust in global buyers who choose Egypt as a reliable sourcing hub.

The paradigm shift is evident: transitioning from selling access to selling capabilities – verified suppliers, reliable logistics, sustainable energy, and consistent regulations. This will transform Egypt from a transactional partner into a strategic supply-chain hub.

2. The UAE has rapidly pivoted into a regional hub for finance, logistics and renewable investment. From an economic-policy standpoint, what institutional reforms should Egypt adopt, beyond physical infrastructure, to convert transit geography into durable industrial competitiveness rather than a mere conduit for re-exports?

Egypt’s geography presents a significant advantage; nevertheless, to convert this into enduring competitiveness, it is essential to augment physical infrastructure with institutional reforms that enhance investor confidence and local capacity.

I would emphasise three priorities:

• Firstly, incentives based on performance. Free-zone and investment packages can be structured to incentivise companies not just for establishing operations in Egypt but also for generating employment, implementing training programs, and fostering connections with local suppliers. Incentives facilitate genuine industrial advancement.
• Secondly, predictability via service standards. Investors prioritise certainty. By fully digitising the single window and customs processes, ensuring they are time-bound and transparent, we diminish transaction costs and establish Egypt as a dependable supply-chain partner.
• Third, enhanced demand and financial interconnections. Public procurement and regional procurement collaborations can be utilised to establish initial markets for Egyptian suppliers, while trade-finance mechanisms and local-currency settlement pathways provide companies with the assurance to expand exports into Africa and beyond.

Collectively, these reforms establish the conducive environment in which transit evolves into transformation—geography remains the basis, while credible institutions and reliable regulations are what convert containers into factories and supply networks into sustainable competitiveness.

3. Green economics is a recurring theme in your work. With the Gulf states committing to net-zero timetables and Egypt hosting major renewables projects, how can middle-income Global South states design green industrial policies that simultaneously attract Gulf capital while safeguarding local value-addition and jobs?

We must consider green projects as industrial activities rather than only energy projects.   If Gulf funding is invested in financing electrons or hydrogen molecules, middle-income countries like Egypt should ensure that these agreements also facilitate component manufacture, skill development, and supplier connections. Integrate climate finance with industrial policy.

Three priorities are prominent:

• Firstly, incorporate local value into every green tender. When soliciting bids for renewable energy or hydrogen, assess offers based on pricing as well as local assembly, apprenticeship opportunities, and collaborations with domestic companies.
• Secondly, establish green industrial parks with assured offtake agreements. Assigning affordable renewable energy to nearby producers of components such as batteries, inverters, or electrolyser parts transforms energy projects into industrial hubs.
• Third, relate finance with performance. Employ blended finance wherein concessional capital is contingent upon local content, employment, and certified supplier development. Thus, Gulf investment provides both renewable energy and national competitiveness.

The overarching concept is clear: Gulf States contribute finance and scale, while host states must offer credibility and capabilities. Transparent contracts, enforced milestones, and supplier development programs enable green financing to support not only clean energy but also high-value industries and sustainable employment.

4. Development finance is morphing; private capital, sovereign wealth, and climate funds now sit alongside concessional lending. For countries in MENA and Africa, what governance frameworks would you prioritise to ensure these new capital flows do not erode fiscal sovereignty or create hidden contingent liabilities?

I contend that we should embrace the new capital inflows while overseeing them with transparency and rigour. Private, sovereign, and climate funds can expedite development; nevertheless, to safeguard fiscal sovereignty, every agreement must be reviewed, valued, and reported prior to implementation.

I would emphasise three governance priorities:

• Firstly, mandate fiscal-risk assessments. Prior to endorsing any substantial Public-Private Partnership, guarantee, or long-term contract, governments must conduct an impartial Value-for-Money and fiscal-risk assessment utilising international standards. This guarantees that liabilities are apparent and controllable from the outset.
• Secondly, establish a register of contingent liabilities. A public dashboard displaying guarantees to enhance risk transparency and foster investor trust. Invisible threats are most hazardous when they are unrecorded.
• Third, centralise and standardise approvals. A legislative inter-agency investment and risk committee can evaluate transactions above a specified threshold, enforce standardised contract templates, and verify guarantees adhere to established boundaries. This enhances coherence and averts disjointed commitments.

Should I select one change, it would be the mandatory legal requirement for pre-signature fiscal-risk evaluations to be publicly accessible for all significant transactions. This straightforward measure mitigates concealed threats at minimal administrative expense.

The overarching idea is evident: see each dollar of fresh financing as contingent — prioritise transparency, followed by stress-tested commitments, with signatures as the final step. This approach enables MENA and African countries to attract substantial investments while maintaining fiscal resiliency.

5. Migration and diaspora linkages are powerful levers for development. Drawing on Egypt’s diasporic networks and the UAE’s migrant labour model, what policy mix best converts remittances, skills transfers and diaspora investment into sustained productive capacity back home?

We must consider remittances, diaspora funds, and migrant talents as enduring capital rather than mere seasonal income streams. If properly administered, they can fund factories, small and medium-sized enterprises, and skill enhancement – rather than only consumption.

I would emphasise three priorities:

• Firstly, enhance the productivity of remittances. Reduce transfer costs, enhance formal channels, and develop remittance-linked savings or investment products that direct a portion of these flows towards SME financing and green industrial initiatives.
• Secondly, leverage diaspora capital via reliable channels. Implement transparent, project-supported diaspora bonds or co-investment funds that align diaspora contributions with public financing. Trust and transparent reporting are essential to garner substantial engagement.
• Third, transform labour migration into skill transfer. Negotiate mobility agreements with Gulf businesses that encompass certification portability and training modules, and develop returnee packages that assist entrepreneurs with initial cash and expedited recognition of qualifications.

When finance, investment, and skills collaborate effectively, diaspora linkages serve as a genuine catalyst for development: creating employment opportunities, enhancing value-added output, and fortifying Egypt’s integration into regional and global markets.

6. Digitalisation of trade (e-customs, e-invoicing, trade facilitation) is touted as a low-cost route to competitiveness. Where should Egypt and similar economies invest first, regulatory reform, digital infrastructure, or human capital, to meaningfully lower trade costs and attract GCC supply-chain relocation?

We have to start with the regulations, thereafter develop the processes, and consistently invest in individuals. To clarify, prioritise regulatory reform initially, followed by digital infrastructure, with an emphasis on human capital consistently.

• Firstly, establish the regulatory foundations accurately. Digital papers such as e-invoices, e-signatures, and electronic bills of lading must possess legal validity, tax recognition, and cross-border acceptability. In the absence of this legal certainty, enterprises and financial institutions will refrain from implementing digital operations.
• Secondly, enhance interoperable digital infrastructure. The NAFEZA single window in Egypt serves as a foundational element; the current objective is to evolve it into an API-first system featuring real-time status monitoring, incremental e-invoicing, and integration with ports, railways, and warehouses. That is what facilitates expedited clearance and reduced expenses.
• Third, Constantly invest in individuals. Customs officials, compliance professionals, subject matter experts, and freight forwarders require training to effectively utilise modern systems and prevent bottlenecks. Technology is effective only when the individuals driving it has expertise and assurance.

To attract GCC supply chain transfer, predictability is essential: service-level assurances about clearance durations, expedited lanes for trusted traders, mutual acknowledgement of electronic papers across borders, and explicit data protection regulations.

My foremost immediate objective would be to legally recognise digital trade documents and establish binding single-window clearing times. This combination immediately diminishes uncertainty, decreases risk premiums, and conveys to international purchasers that Egypt is a reliable trade partner.