Exclusive - Construction and Politics: New Cities Shape Egypt’s Future

A model of a planned new capital for Egypt is displayed for investors during the final day of the Egypt Economic Development Conference (EEDC) in Sharm El-Sheikh, March 15, 2015. (Reuters)
A model of a planned new capital for Egypt is displayed for investors during the final day of the Egypt Economic Development Conference (EEDC) in Sharm El-Sheikh, March 15, 2015. (Reuters)
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Exclusive - Construction and Politics: New Cities Shape Egypt’s Future

A model of a planned new capital for Egypt is displayed for investors during the final day of the Egypt Economic Development Conference (EEDC) in Sharm El-Sheikh, March 15, 2015. (Reuters)
A model of a planned new capital for Egypt is displayed for investors during the final day of the Egypt Economic Development Conference (EEDC) in Sharm El-Sheikh, March 15, 2015. (Reuters)

Egyptian President Abdul Fattah al-Sisi is seeking to shape his country’s future through 14 new fourth generation cities that have been designed according to the latest global standards. Since assuming power five years ago, Sisi has embarked on a mission to comprehensively reshape the country, defying political, economic and social challenges.

The New Administrative Capital, located 75 kilometers east of Cairo, is among the president’s most ambitious projects. The development of the capital does not mean that Cairo, with its historic, cultural and touristic importance, will be abandoned. The new capital will in fact only highlight the old city’s significance.

Other projects include the New Alamein City, dubbed the icon of the Mediterranean, and al-Jalalah City in the East.

Egypt is pursuing its Vision 2030 which calls for increasing construction in the country from 6 to 12 percent in order to accommodate its growing population, ease traffic in old cities and promote economic growth through major projects that will provide thousands of job opportunities for the people.

Sisi believes the construction projects are the “first line of defense” against terrorist groups that only seek to spread chaos in Egypt. Addressing critics, he said the projects are being funded by selling real estate to investors. Critics have said that the government was spending state funds on the new projects instead of tackling more pressing issues in the health and education sectors, among others.

Political science Professor at the American University in Cairo Saeed Sadiq said that the construction expansion was a primary goal for many previous governments, but none were able to achieve it.

“None of them have shown the political will displayed by Sisi,” he told Asharq Al-Awsat.

The Egyptians have since ancient times lived on some 6 percent of the country’s area and governments have longed to expand it to 20 percent, he added.

Several cities were unveiled by former President Hosni Mubarak, including 6th of October City, Sharm El-Sheikh and others.

The idea was therefore, always there, but its implementation was slow, said Sadiq.

Sisi is now pushing forward this operation and he hopes it will promote economic growth, not just a construction boom, he remarked.

Furthermore, he noted that the current cities will be unable to accommodate the growing population, which is growing at a rate of 2.6 million per year.

This demands the construction of a strong infrastructure and the inevitable move to new cities, explained Sadiq.

Former Minister of Sports Alieddine Hilal said the accomplishments achieved by Egypt exceed those reached by Brazil, Nigeria and Kazakhstan that also moved their capitals to new cities.

Egypt will be doing this at a faster rate, he told Asharq Al-Awsat.

He credited this success to Sisi and the military that is overseeing the execution of projects by hundreds of private companies.

The new capital is expected to take in some 500,000 people during its first phase, in addition to some 40,000 to 50,000 government employees who will be transferred to new headquarters. The capital is planned to accommodate 6.5 million people in an area of 170,000 feddan.

Sadiq acknowledged that the move to the new city could sharply expose the divide between social classes in Egypt, whereby the wealthy would be able to move to the new capital. It would also deepen the divide between the people and authority.

Hilal said the construction of new cities should be seen from a broader angle and as part of a greater plan to rehabilitate infrastructure and shift towards digital transformation.

Moreover, the authorities have started to hold televised events and campaigns that raise awareness among the people about the new cities and therefore, make them part of their collective memory and conscience.



IMF and Arab Monetary Fund Sign MoU to Enhance Cooperation

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
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IMF and Arab Monetary Fund Sign MoU to Enhance Cooperation

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA

The International Monetary Fund (IMF) and the Arab Monetary Fund (AMF) signed a memorandum of understanding (MoU) on the sidelines of the AlUla Conference on Emerging Market Economies (EME) to enhance cooperation between the two institutions.

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki, SPA reported.

The agreement aims to strengthen coordination in economic and financial policy areas, including surveillance and lending activities, data and analytical exchange, capacity building, and the provision of technical assistance, in support of regional financial and economic stability.

Both sides affirmed that the MoU represents an important step toward deepening their strategic partnership and strengthening the regional financial safety net, serving member countries and enhancing their ability to address economic challenges.


Saudi Chambers Federation Announces First Saudi-Kuwaiti Business Council

File photo of the Saudi flag/AAWSAT
File photo of the Saudi flag/AAWSAT
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Saudi Chambers Federation Announces First Saudi-Kuwaiti Business Council

File photo of the Saudi flag/AAWSAT
File photo of the Saudi flag/AAWSAT

The Federation of Saudi Chambers announced the formation of the first joint Saudi-Kuwaiti Business Council for its inaugural term (1447–1451 AH) and the election of Salman bin Hassan Al-Oqayel as its chairman.

Al-Oqayel said the council’s formation marks a pivotal milestone in economic relations between Saudi Arabia and Kuwait, reflecting a practical approach to enabling the business sectors in both countries to capitalize on promising investment opportunities and strengthen bilateral trade and investment partnerships, SPA reported.

He noted that trade between Saudi Arabia and Kuwait reached approximately SAR9.5 billion by the end of November 2025, including SAR8 billion in Saudi exports and SAR1.5 billion in Kuwaiti imports.


Leading Harvard Trade Economist Says Saudi Arabia Holds Key to Success in Fragmented Global Economy

Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
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Leading Harvard Trade Economist Says Saudi Arabia Holds Key to Success in Fragmented Global Economy

Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).

Harvard University economics professor Pol Antràs said Saudi Arabia represents an exceptional model in the shifting global trade landscape, differing fundamentally from traditional emerging-market frameworks. He also stressed that globalization has not ended but has instead re-formed into what he describes as fragmented integration.

Speaking to Asharq Al-Awsat on the sidelines of the AlUla Conference for Emerging Market Economies, Antràs said Saudi Arabia’s Vision-driven structural reforms position the Kingdom to benefit from the ongoing phase of fragmented integration, adding that the country’s strategic focus on logistics transformation and artificial intelligence constitutes a key engine for sustainable growth that extends beyond the volatility of global crises.

Antràs, the Robert G. Ory Professor of Economics at Harvard University, is one of the leading contemporary theorists of international trade. His research, which reshaped understanding of global value chains, focuses on how firms organize cross-border production and how regulation and technological change influence global trade flows and corporate decision-making.

He said conventional classifications of economies often obscure important structural differences, noting that the term emerging markets groups together countries with widely divergent industrial bases. Economies that depend heavily on manufacturing exports rely critically on market access and trade integration and therefore face stronger competitive pressures from Chinese exports that are increasingly shifting toward alternative markets.

Saudi Arabia, by contrast, exports extensively while facing limited direct competition from China in its primary export commodity, a situation that creates a strategic opportunity. The current environment allows the Kingdom to obtain imports from China at lower cost and access a broader range of goods that previously flowed largely toward the United States market.

Addressing how emerging economies should respond to dumping pressures and rising competition, Antràs said countries should minimize protectionist tendencies and instead position themselves as committed participants in the multilateral trading system, allowing foreign producers to access domestic markets while encouraging domestic firms to expand internationally.

He noted that although Chinese dumping presents concerns for countries with manufacturing sectors that compete directly with Chinese production, the risk is lower for Saudi Arabia because it does not maintain a large manufacturing base that overlaps directly with Chinese exports. Lower-cost imports could benefit Saudi consumers, while targeted policy tools such as credit programs, subsidies, and support for firms seeking to redesign and upgrade business models represent more effective responses than broad protectionist measures.

Globalization has not ended

Antràs said globalization continues but through more complex structures, with trade agreements increasingly negotiated through diverse arrangements rather than relying primarily on multilateral negotiations. Trade deals will continue to be concluded, but they are likely to become more complex, with uncertainty remaining a defining feature of the global trading environment.

Interest rates and artificial intelligence

According to Antràs, high global interest rates, combined with the additional risk premiums faced by emerging markets, are constraining investment, particularly in sectors that require export financing, capital expenditure, and continuous quality upgrading.

However, he noted that elevated interest rates partly reflect expectations of stronger long-term growth driven by artificial intelligence and broader technological transformation.

He also said if those growth expectations materialize, productivity gains could enable small and medium-sized enterprises to forecast demand more accurately and identify previously untapped markets, partially offsetting the negative effects of higher borrowing costs.

Employment concerns and the role of government

The Harvard professor warned that labor markets face a dual challenge stemming from intensified Chinese export competition and accelerating job automation driven by artificial intelligence, developments that could lead to significant disruptions, particularly among younger workers. He said governments must adopt proactive strategies requiring substantial fiscal resources to mitigate near-term labor-market shocks.

According to Antràs, productivity growth remains the central condition for success: if new technologies deliver the anticipated productivity gains, governments will gain the fiscal space needed to compensate affected groups and retrain the workforce, achieving a balance between addressing short-term disruptions and investing in long-term strategic gains.