Why pressure is growing to finalize UK-GCC free trade agreement

The UK believes a GCC FTA would increase bilateral trade by 16 percent. (SPA/File)
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Updated 05 February 2025
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Why pressure is growing to finalize UK-GCC free trade agreement

  • Britain’s financial woes and US President Donald Trump’s trade wars loom over negotiators working to get deal over the line
  • The deal would eliminate tariffs, reduce trade barriers, and facilitate business cooperation in key sectors like AI and renewables

LONDON: The UK’s economic fragility and global turmoil from President Donald Trump’s trade wars have given increased impetus for Britain to reach a free trade agreement with the Gulf Cooperation Council.

Talks for a deal between the six-nation bloc and Britain are continuing apace after restarting in September and are said to be at an advanced stage.

Yet the agreement could not come soon enough for the UK government, which is struggling to breathe life into a stagnant economy.

Prime Minister Keir Starmer has prioritized growth, and a GCC FTA would bring a significant boost to the UK’s finances and the governing Labour Party’s political fortunes.

The benefits would also be plentiful for Gulf countries, many of which have embarked on extensive reforms to diversify their economies away from hydrocarbons and toward modern sectors.




Saudi Crown Prince Mohammed bin Salman receives British Prime Minister Keir Starmer in Riyadh. (SPA/File)

Details of the negotiations are closely guarded, but economists and experts told Arab News they believe a final deal is close and that there is will from both sides to get the agreement in place.

“The UK government has signaled that it wants to attract more investment into the economy, and its new drive for growth should certainly give momentum to the determination of UK negotiators to push forward the talks on the FTA toward a satisfactory conclusion,” said Bandar Reda, secretary-general and CEO of the Arab-British Chamber of Commerce.

“With a fair degree of optimism then we can probably look forward to a positive outcome being achieved a little sooner than previously expected.”

The UK believes a GCC FTA would increase bilateral trade by 16 percent and could add an extra £8.6 billion ($10.7 billion) a year to the existing £57.4 billion worth of annual trade between the two sides.

Officials say it could also boost UK annual workers’ wages by around £600 million to £1.1 billion every year and increase UK GDP by between £1.6 and £3.1 billion by 2035.

The UK has been looking to forge fresh trade deals since leaving the EU, its biggest trading partner, in 2020.

With already strong trade links and historic ties to Gulf countries, establishing an agreement with the GCC as a whole became a priority.

Consisting of Saudi Arabia, the UAE, Qatar, Bahrain, Oman and Kuwait, the GCC economic and political union is also seeking to make more trade agreements as a bloc.




Britain's Queen Camilla, Qatar's Emir Sheikh Tamim bin Hamad al-Thani, Britain's King Charles III and Sheikha Jawaher bint Hamad bin Suhaim al-Thani in London. (AFP/File)

A UK government report published in 2022 said an FTA with the GCC “is an opportunity to boost trade with an economically and strategically important group of countries, support jobs and advance our global interests.”

After the July election brought in his new UK government, Starmer prioritized relations with the Gulf, and a seventh round of trade negotiations got underway.

Jonathan Reynolds, the business and trade secretary, visited the region in September and delegations have traveled back and forth since.

The latest negotiation team from the GCC was in London last month, according to the Department for Business and Trade.

Starmer traveled to Saudi Arabia in December and met with Prime Minister and Crown Prince Mohammed bin Salman. He also visited the UAE and hosted the Qatari emir in London.

Several deals were announced during those meetings, as the new government made clear that attracting foreign investment from Gulf countries was key to its growth strategy.

At the same time, the economic pressures on Starmer’s administration have increased. Despite a relatively strong start to 2024, the UK economy failed to grow in the second half of the year.

Chancellor Rachel Reeves came under fire for her first budget, which dented business confidence with a series of tax hikes.

With UK borrowing costs hitting their highest level for several years last month, boosting trade with a bloc like the GCC through an FTA would be a significant boon for Starmer.

But it is not just the UK’s domestic economic woes that are looming over negotiators. With the US administration’s threats to impose tariffs on both allies and adversaries causing global financial uncertainty, Gulf countries will also be keen to ease trade restrictions with a major partner like the UK.




British Prime Minister Keir Starmer meets UAE President Sheikh Mohamed bin Zayed Al Nahyan at the Shati Palace in Abu Dhabi. (AFP/File)

“One effect of the threat of tariffs might be to add urgency to the negotiations to conclude the UK-GCC FTA,” Reda, of the Arab-British Chamber of Commerce, told Arab News.

Primarily, the agreement would remove or reduce tariff barriers to trade between GCC countries and the UK, easing the flow of goods and services.

The average tariff applied to UK exports by the GCC is around 5.5 percent, whereas imports from the Gulf face a 5.8 percent levy. However, the UK places no tariffs on oil and gas bought from GCC countries, and this accounts for most of the import value.

Still, removing the tariffs would help businesses on both sides by reducing costs but would particularly benefit the UK given that its exports account for 60 percent of total trade.

Perhaps more important, according to Freddie Neve, lead Middle East associate at the London-based Asia House think tank, would be removing red tape faced by importers and exporters.




Primarily, the agreement would remove or reduce tariff barriers to trade between GCC countries and the UK, easing the flow of goods and services. (SPA)

“While reducing tariffs on these goods is an obvious target in the negotiations, arguably a larger opportunity relates to the reduction of non-tariff barriers,” Neve said. “These relate to regulations, standards, and procedures required of foreign firms to do business.

“A government analysis published before negotiations counted over 4,500 non-tariff measures applied by the GCC on the UK. Naturally, some of these will have been ameliorated by recent Gulf economic reforms, but an FTA that reduces these barriers would make it easier for UK companies to operate in and across the GCC.”

While the timing of the FTA would be good for the UK it also fits perfectly with the timetable of economic diversification underway in the GCC.




An FTA negotiation is a vast and complex process and there may well still be sticking points to be ironed out before a final deal is reached. (AFP/File)

Saudi Arabia and the UAE in particular are moving away from reliance on oil revenues to modern, technology-driven economies.

Investing in the UK means they are able to tap into services and expertise in sectors where Britain has a competitive advantage, such as technology, life sciences, creative industries, education and financial services.

In particular, the UK’s 2022 assessment predicted an FTA would allow for cooperation in “industries of the future” such as artificial intelligence and renewable energy, in which Gulf countries are investing heavily.

“Over the past three years, innovations in AI and related sectors to do with the digital economy, e-commerce, advanced data and computing have developed enormously,” Reda said. “The Gulf states have all been seeking to position themselves at the forefront of these developments that are reshaping how we do business.

“These areas open up major new areas for UK-GCC cooperation as we all seek to maximize the potential offered by AI and cutting-edge tech. The FTA should give a tremendous boost to cooperation in these industries of the future.”

INNUMBERS

• 16% Potential increase in bilateral trade resulting from UK-GCC free trade agreement.

• £8.6bn What the FTA could add to the existing £57.4bn worth of annual bilateral trade.

• £1.6-£3.1bn Possible boost to UK GDP by 2035, raising wages to £1.1bn per year.


An FTA negotiation is a vast and complex process and there may well still be sticking points to be ironed out before a final deal is reached.

Douglas Alexander, the UK’s minister of state for trade policy and economic security, said in December that negotiators on the GCC agreement continued to have “constructive discussions on areas of sustainable trade,” such as environment and labor.

MPs have raised questions over whether the UK should be focusing on a GCC-wide agreement rather than individual deals with Gulf countries, citing variations in policies and regulations across the bloc.

But the GCC countries have been developing their concerted approach to trade and are pursuing similar agreements with the EU, China, and Turkiye.




Prime Minister Keir Starmer has prioritized growth, and a GCC FTA would bring a significant boost to the UK finances. (SPA/File)

“Negotiations with a bloc are always more challenging than bilateral deals,” Justin Alexander, a director at US consultancy Khalij Economics, told Arab News. “However, the GCC is functioning in the most joined-up way I have seen in my career, and all the GCC members are important partners for the UK, so it is highly motivated to make this work.”

He said he was not aware of any significant obstacles remaining in the talks and believed the deal is very near completion.

“The most significant element of the UK-GCC FTA for both sides will be the fact that it has been done, setting a precedent for further trade deals for both parties,” Alexander said. “Both sides are open, globally integrated economies and would benefit from modern trade deals.”

The Department for Business and Trade said trade deals played a “vital role” in the government’s mission for economic growth.

“We’re seeking a modern trade deal with the Gulf as a priority, and our focus is securing a deal that delivers real value to businesses on both sides, rather than getting it done by a specific date,” the department said.

 


Medical NGO blames new US aid group for deadly Gaza chaos

Updated 02 June 2025
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Medical NGO blames new US aid group for deadly Gaza chaos

  • Humanitarian aid must be provided only by humanitarian organizations who have the competence and determination to do it safely and effectively

RAFAH, Palestinian Territories: Medical charity Doctors Without Borders said Sunday that people it treated at a Gaza aid site run by a new US-backed organization reported being “shot from all sides” by Israeli forces.
The NGO, known by its French name MSF, blamed the Gaza Humanitarian Foundation’s aid distribution system for chaos at the scene in the southern Gaza town of Rafah.
Gaza’s civil defense agency said Israeli fire killed 31 Palestinians at the site. Witnesses told AFP the Israeli military had opened fire.
The GHF and Israeli authorities denied any such incident took place but MSF and other medics reported treating crowds of locals with gunshot wounds at the Nasser hospital in the nearby town of Khan Younis.
“Patients told MSF they were shot from all sides by drones, helicopters, boats, tanks and Israeli soldiers on the ground,” MSF said in a statement.
MSF emergency coordinator Claire Manera in the statement called the GHF’s system of aid delivery “dehumanizing, dangerous and severely ineffective.”
“It has resulted in deaths and injuries of civilians that could have been prevented. Humanitarian aid must be provided only by humanitarian organizations who have the competence and determination to do it safely and effectively.”
MSF communications officer Nour Alsaqa in the statement reported hospital corridors filled with patients, mostly men, with “visible gunshot wounds in their limbs.”
MSF quoted one injured man, Mansour Sami Abdi, as describing people fighting over just five pallets of aid.
“They told us to take food — then they fired from every direction,” he said. “This isn’t aid. It’s a lie.”
The Israeli military said an initial inquiry found its troops “did not fire at civilians while they were near or within the humanitarian aid distribution site.”
A GHF spokesperson said: “These fake reports have been actively fomented by Hamas,” the Islamic militant group that Israel has vowed to destroy in Gaza.


Algeria ‘regrets’ Britain backing Morocco autonomy plan for W.Sahara

Updated 02 June 2025
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Algeria ‘regrets’ Britain backing Morocco autonomy plan for W.Sahara

  • “Algeria regrets the choice made by the United Kingdom to support to the Moroccan autonomy plan

ALGIERS: Algeria’s foreign ministry said it “regrets” Britain’s decision on Sunday to support Morocco’s automony plan for the disputed territory of Western Sahara, overturning a decades-long policy in favor of self-determination.
“Algeria regrets the choice made by the United Kingdom to support to the Moroccan autonomy plan. In 18 years of existence, this plan has never been submitted to the Sahrawis as a basis for negotiation, nor has it ever been taken seriously by the successive UN envoys,” the ministry said in a statement.
 

 


Egypt’s foreign minister urges end to Israeli war in Gaza during call with Witkoff

Updated 01 June 2025
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Egypt’s foreign minister urges end to Israeli war in Gaza during call with Witkoff

  • Badr Abdelatty emphasized that a just and lasting solution to the Israeli-Palestinian conflict requires a comprehensive political settlement
  • He said alleviating the humanitarian suffering in Gaza must be a priority for the international community

LONDON: Egypt's Foreign Minister, Badr Abdelatty, stressed the urgent need for an immediate cessation of Israeli aggression against the Gaza Strip during a phone call with Steve Witkoff, the US President's Special Envoy to the Middle East.

Abdelatty emphasized that alleviating the humanitarian suffering in the Palestinian coastal enclave must be a priority for the international community and called for unconditional access to humanitarian aid.

He emphasized that a just and lasting solution to the Israeli-Palestinian conflict requires a comprehensive political settlement that aligns with President Trump's vision for sustainable peace in the Middle East, the Emirates News Agency reported.

Abdelatty was a member of the Ministerial Committee designated by the Joint Extraordinary Arab-Islamic Summit on Gaza, which Israel prevented from visiting the occupied West Bank on Sunday to meet with Palestinian officials in Ramallah.

Arab ministers from Saudi Arabia, Bahrain, Jordan, and Egypt, along with the Secretary-General of the Arab League, condemned what they described as the "arrogant" decision by Israel to block their visit and its rejection of any peace efforts.


Is Iraq ready to stand alone against extremist threats if US withdrawal goes ahead?

Updated 02 June 2025
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Is Iraq ready to stand alone against extremist threats if US withdrawal goes ahead?

  • Decades of training and investment have improved security forces, but critical capability gaps remain
  • Analysts warn premature pullout could erase progress against extremism and empower armed groups

LONDON: When Daesh extremists seized control of swathes of Iraqi territory in 2014, many wondered whether the onslaught could have been prevented had US troops not withdrawn from the country three years earlier.

As the militants surged into Iraq’s second-largest city, Mosul, there were reports of members of the Iraqi Security Forces stripping off their uniforms as they fled.

“We can’t beat them,” an unnamed army officer told Reuters amid the chaos. “They are well-trained in street fighting, and we’re not. We need a whole army to drive them out of Mosul.”

After three years of fierce fighting that took Daesh within 25 kilometers of the capital, Baghdad, the extremists were finally driven back and Mosul was liberated.

The gargantuan military effort was spearheaded by Iraq’s elite Counter Terrorism Service, bolstered by the return of American troops and the US Air Force.

Crack troops of the Iraqi Counter-Terrorism Services (CTS) advance in western Mosul's al-Islah al-Zaraye neighborhood on May 12, 2017 during an offensive to retake the area from Daesh jihadis. (AFP)

Images of the destruction in Mosul, along with the catastrophic impact of Daesh’s occupation, might be playing on the minds of Washington officials as they once again weigh whether or not to remove American troops still stationed in Iraq.

As it stands, the US and Iraq have agreed to end Operation Inherent Resolve — the US-led coalition’s mission to combat Daesh — by September. Most of the 2,500 US personnel in Iraq are scheduled to leave in the initial phase, with a small number remaining until 2026.

Many believe US President Donald Trump, acting under his isolationist tendencies, will want to hasten the withdrawal of those forces, or is unlikely to extend their stay if the Iraqi government requests it.

With reports of an increase in attacks by Daesh sleeper cells, fears of instability across the border in Syria, and with Iran looking to shore up its proxy militias in Iraq, there are concerns that another complete US withdrawal will once again leave the country vulnerable.

“The risk of premature withdrawal from Iraq is that the Iraqi Security Forces will lose critical operational and tactical support, and Daesh will seize the opportunity to reconstitute and once again terrorize the Iraqi people and state,” Dana Stroul, research director at the Washington Institute for Near East Policy and a former Pentagon official, told Arab News.

The mooted withdrawal of US troops comes more than 20 years after the US-led invasion of Iraq toppled Saddam Hussain, freeing the country from dictatorship, but ushering in a period of sectarian civil war.

File photo showing US soldiers near an Iraqi army base on the outskirts of Mosul during the fight against Daesh militants on November 23, 2016. (AFP)

US forces were drawn into cycles of violence and routinely became the target of two mutually antagonistic sectarian forces: Iran-backed militias and an insurgency in which Al-Qaeda played a prominent role.

When President Barack Obama took office in 2009, he vowed to end US involvement in the conflicts in Iraq and Afghanistan, but not without first ordering a massive troop surge in an attempt to salvage the mission.

In Iraq, where more than 100,000 people were estimated to have died in the violence, there was widespread public anger at the American presence. In the US, the war was also deeply unpopular with thousands of American soldiers having been killed.

Some American and Iraqi officials wanted to maintain a US military presence in the country, fearful of an Al-Qaeda resurgence. But attempts to negotiate an agreement for a reduced force failed and in October 2011 Obama announced that all of the remaining 39,000 US troops would be withdrawn by the end of that year, bringing a close to the mission.

The US spent $25 billion on training and equipping Iraq’s security forces up to September 2012, alongside Iraq’s own spending on fighter jets and other advanced materiel. So it was something of a surprise that Iraqi forces were so quickly overrun when Daesh launched its offensive in 2014, having emerged from the remnants of Al-Qaeda in Iraq.

Images of Daesh fighters driving around in US armored vehicles captured from the Iraqi military symbolized how quickly Iraq’s armed forces had deteriorated since the 2011 withdrawal.

An image grab taken from a propaganda video released on March 17, 2014 by the Daesh's al-Furqan Media militants with their flag as they stand on a captured armored vehicle in Iraq’s Anbar province. (AFP/File)

As the extent of Daesh’s brutality began to emerge, including the slaughter of the Yazidi minority and the beheading of Western hostages on YouTube, the US ordered its forces back to the region, as part of an international coalition, to fight the extremists in both Iraq and Syria.

After some of the most brutal urban warfare seen since the Second World War, Iraq’s then-prime minister, Haider Al-Abadi, declared the territorial defeat of Daesh in December 2017. US forces continued to help their allies in Syria to defeat the extremists there in March 2019.

By December 2021, US forces in Iraq no longer held combat roles, instead working on training, advisory, and intelligence support for the country’s military. The remaining 2,500 US troops are spread between Baghdad, Irbil in the semi-autonomous Kurdistan region, and Ain Al-Asad air base.

However, soon after Al-Abadi’s declaration of victory over the extremists, a new threat emerged in Iraq in the shape of Iran-backed militias, originally mobilized to help defeat Daesh. Having extended their reach over Sunni and Kurdish areas, these groups began attacking US bases with rockets and drones in a bid to force their immediate withdrawal.

Members of the Hashed al-Shaabi (Popular Mobilisation Forces) paramilitary unit take part in a parade in the northern Iraqi city of Mosul on December 10, 2024, to mark the nation’s victory against Daesh militants. (AFP)

These attacks, sponsored by Iran’s powerful Islamic Revolutionary Guard Corps, prompted President Trump, during his first term, to order the killing of militia chief Abu Mahdi Al-Muhandis and Iranian Quds Force commander Qassem Soleimani in a drone strike on their motorcade as they left Baghdad Airport on Jan. 3, 2020.

Soleimani’s death was a major setback for Iran’s proxies throughout the region, but the attacks on US positions did not subside. In fact, with the onset of the war in Gaza in October 2023, Iraq’s Shiite militias mounted a fresh wave of strikes, ostensibly in support of Hamas.

The deadliest of these occurred on Jan. 28, 2024, when three US personnel were killed and 47 wounded in a drone attack on Tower 22 just over the border in Jordan, prompting then-US president, Joe Biden, to order a wave of airstrikes on militia positions in Iraq.

Mindful of the need to protect its proxies in Iraq, at a time where Lebanon’s Hezbollah and Yemen’s Houthis have been weakened and the sympathetic Assad regime in Syria has fallen, Iran appears to have forsworn further militia strikes on US forces.

This picture taken on January 8, 2022, shows Iraqi Shiites commemorating the second anniversary of the killing of top Iranian commander Qasem Soleimani and Iraqi paramilitary commander Abu Mahdi al-Muhandis (posters) in the southern Iraqi city of Basra. (AFP)

The latest agreement to end the US presence was reached in September last year with the aim of moving to a fully bilateral security partnership in 2026.

Meanwhile, the US Defense Department announced in April it would be halving the number of troops in northeast Syria “in the coming months.”

An indication of Trump’s aversion to the continued US military presence came during a speech in Saudi Arabia while on his tour of the Gulf in May when he decried “Western interventionists.”

A clear concern surrounding a US withdrawal is whether Iraq’s security forces are now strong enough to withstand threats like the 2014 Daesh assault. The disastrous withdrawal from Afghanistan in August 2021 is also no doubt fresh in the minds of defense officials.

A recent report by the New Lines Institute think tank in New York said that a US withdrawal from Iraq would “heavily impede the intelligence and reconnaissance collection, artillery, and command-and-control capabilities of Iraqi military forces.”

The report studied quarterly independent audits for the US Congress between 2019 and 2024 to assess the capabilities of Iraqi forces. It looked at the three main forces in Iraq: the Iraqi Security Forces, Counter Terrorism Service, and the Kurdish Peshmerga.

The report said: “While segments of Iraq’s military, such as the CTS and Kurdish security forces, have proven efficient in counterterrorism operations, several gaps exist in Iraq’s conventional capabilities, including artillery, command and control, inter- and intra-branch planning, and trust.”

In this photo taken on October 20, 2016, Iraqi Kurdish Peshmerga fighters fire a multiple rocket launcher at a Daesh position near the town of Bashiqa, Iraq. Analysts fear that while segments of Iraq’s military, such as the CTS and Kurdish security forces called Peshmerga, have proven effective in the fight against Daesh, there are plenty of gaps in Iraq's national defense capabilities. (AFP)

The think tank said there were serious questions about whether Iraq’s security forces would be able to “hedge against internal and external challenges” in the absence of the US security umbrella.

The report’s co-author Caroline Rose, a director at New Lines, says the gaps in Iraqi capabilities “could reverse over a decade of progress that Operation Inherent Resolve has made in Iraq.”

“If the objective is still to advance Iraqi forces’ operational capacity, sustain gains against Daesh, and serve as a ‘hedge’ against Iranian influence, there is work still to be done,” she told Arab News.

While Iraq has enjoyed a period of relative stability, the threats to its national security continue to lurk within and beyond its borders.

The biggest fear is of a Daesh resurgence. Although the group has been severely depleted, it continues to operate cells in rural areas of Iraq and Syria, and has since made headway in Afghanistan, the Sahel, and beyond.

“Since January, the US military is still actively supporting the Iraqis,” said the Washington Institute’s Stroul. “There have been monthly operations against Daesh, including the killing of a senior leader in western Iraq. This tells us that Daesh is still a threat, and the US support mission is still necessary.”

Security analysts have warned that the huge number of Daesh prisoners in northeast Syria posses a threat to the region in case they break out. (AFP)

Another concern is that instability in Syria, where the embryonic, post-Assad government is facing significant security challenges, could again provide a breeding ground for Daesh that could spill across the border.

“There are still 9,000 Daesh detainees held in prison camps in northeast Syria,” said Stroul, adding that these present “a real risk of prison breaks that will replenish Daesh ranks and destabilize Syria, Iraq, and the rest of the region. If the security situation deteriorates in Syria, this will have seriously negative impacts in Iraq.”

And then there is the ongoing threat posed by Iran-backed militias. While these militias have been officially recognized as part of Iraq’s security apparatus, some believe the US presence in Iraq helps keep them — and, by extension, Iran — in check.

“The staging of US forces and equipment, combined with a deep Iraqi dependence on American technical and advisory support, creates an obstacle and point of distraction for Tehran and its proxies,” Rose said.

If the withdrawal of US troops from Iraq is inevitable, then how can Washington best prepare Iraq to go it alone?

For Rose, the US should play a “long game” to sustain security ties with Iraq and preserve the progress made under Operation Inherent Resolve.

She recommended the US continue investing in Iraq’s defense and security, conducting regular joint military exercises, and using its current presence in Irbil and Baghdad to build strong relations with security officials.

She also advised other international bodies, like the NATO Mission-Iraq and the EU Advisory Mission Iraq, to coordinate closely with the US as the drawdown gets underway.

This photo taken on December 9, 2021, shows Iraqi and NATO military officials at a press briefing after a meeting on the continuing campaign against Daesh at the Joint Operations Center in Baghdad. (AFP)

Although the US appears set on pivoting away from the region to focus strategic attention on the Asia-Pacific, some still hope there could be a way for America to maintain some form of military presence, given the rapidly evolving situation in the wider Middle East.

Reports earlier this year suggested some senior Iraqi politicians aligned with Iran privately want a US presence to continue, at least until ongoing US-Iran nuclear talks reach a conclusion.

“The US military mission is one of support, advice, and assistance by mutual consent of Baghdad and Washington,” Stroul, of the Washington Institute, said. “If the Iraqi government invites the US military to remain for some period of time, there should be agreement on the supporting role that the US can play.”

If Iraq hopes to maintain lasting stability, it needs to ensure its security forces can act alone to protect the country and population from internal and external threats.

Continuing to work with the world’s foremost military power, even in a limited capacity, would go some way to ensuring the horrors of 2014 are not repeated.
 

 


Egypt unveils plan for new desert city in latest megaproject

Updated 01 June 2025
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Egypt unveils plan for new desert city in latest megaproject

  • The new city, named Jirian, meaning “Flow” in Arabic, is part of Egypt’s Nile Delta scheme, a massive agricultural initiative to reclaim about 2.5 million acres west of the original Nile Delta

CAIRO: Egypt has unveiled plans for a vast new urban development west of Cairo where a man-made channel of the River Nile will eventually wind through what was once arid desert.

The new city, named Jirian, meaning “Flow” in Arabic, is part of Egypt’s Nile Delta scheme, a massive agricultural initiative to reclaim about 2.5 million acres west of the original Nile Delta.

The ambitious agricultural project, which started in 2021, seeks to boost production of strategic crops such as wheat and corn while reducing the North African country’s food import bill.

The project is the latest in a string of megaprojects launched by President Abdel Fattah El-Sisi in recent years, including a new administrative capital east of Cairo.

While officials say these projects are key to Egypt’s long-term growth, they have also contributed to the country’s soaring foreign debt, which quadrupled since 2015 to reach $155.2 billion by late 2024.

The country has also received billions of dollars from the International Monetary Fund and the EU to ensure its financial stability, with the EU pledging billions more last month.

At a launch event on Sunday, Egyptian Prime Minister Moustafa Madbouli called the Jirian project “an urban and development revolution.”

He added that it would create 250,000 jobs and serve as the cornerstone of a wider development zone equivalent in size to four to five governorates.

“We are talking about full-spectrum development,” he told reporters, describing a sprawling urban zone that will include industry, logistics hubs, and homes for “between 2.5 and 3 million families.”

The government did not disclose the project’s total cost, which is being developed in partnership with three major Egyptian real estate firms.

The new Nile Delta project comes at a time when Egypt is already under pressure to secure its water future.

With 97 percent of its fresh water sourced from the Nile, the country has been locked in a years-long dispute with Addis Ababa over the Grand Ethiopian Renaissance Dam, which Cairo fears could reduce downstream water flows.