by Mahmoud Fouly

CAIRO, June 15 (Xinhua) -- The development of the Suez Canal Corridor is one of Egypt's national mega projects on which the country pins hope to attract further investment and boost its economy after years of slowdown.

The recently signed 50-year agreement between Egypt and Russia to build a vast Russian industrial zone in the Suez Canal region, particularly in the east of Port Said province northeastern the country, is expected to bring about 7 billion U.S. dollars in investment.

"The agreement aims at bolstering mutual cooperation at the industrial level, increasing investment opportunities and creating an adequate environment for further technical and scientific cooperation between the two sides," said Egyptian Minister of Trade and Industry Tarek Kabil after signing the industrial zone agreement with his Russian counterpart Denis Manturov in Moscow late May.

The agreement is seen as a significant shift in Egyptian-Russian strategic relations, for Russia is already assigned with building Egypt's first nuclear power plant in Dabaa city of the coastal Mediterranean province of Matrouh.

The Russian industrial zone will be built on an area of 5.25 square km within the Suez Canal Economic Zone (SCZone) and is expected to create hundreds of thousands of job opportunities in the most populous Arab state.

"A Russian corporation will be in charge of the industrial zone development east of Port Said in three phases over about 10 years, with investments of around 6.8 billion dollars," Nader Kamel, an official at the investors relations department of the SCZone, told Xinhua.

"The project needs more than 30,000 workers in each phase and the zone targets to provide industries with construction material, machinery, engineering equipment, pharmaceutical products and others," he added.

The SCZone officer noted that the industrial project between Egypt and Russia will enhance their trade relations, boost their mutual trade, increase technology transfer between the two countries and reflect on their bilateral ties in general, "just like the case of Chinese TEDA industrial zone in Ain Sokhna district of Suez province."

China's TEDA, one of the oldest and largest industrial developers in the SCZone, develops an area of 7.23 square km in the region, and its tenant Jushi, a Chinese leading fiberglass manufacturer, helped Egypt become the world's third largest fiberglass producer after the United States and China.

Since Egypt has been looking east in politics and economy, as shown in its further cooperation and growing ties with Russia and China, the North African country expects the Russian industrial zone to be a massive plus for the Suez Canal Corridor development project.

Kamel said that the Russian industrial zone will enjoy a distinguished location as eastern Port Said area is located directly on the Mediterranean seashore opposite to Europe, "which is a vital location at the northern entrance of the Suez Canal."

"It faces the European markets and represents a focal point between the markets of North Africa, the Middle East and southern Europe, which gives the SCZone an additional competitive edge," he told Xinhua.

Among the SCZone incentives provided to foreign investors are several regional trade agreements that facilitate the entry of Egyptian-made products to specific markets with some tariff exemptions.

These deals include Egypt's agreements with the Common Market of Eastern and Southern Africa (COMESA), the Greater Arab Free Trade Area (GAFTA) and its Association Agreement with the European Union.

The SCZone also has six seaports including East Port Said port on the Mediterranean, which will facilitate the transportation of materials and commodities.

"Our main objective of the SCZone is not just to establish projects but to maintain sustainable development through them," said the SCZone officer.

Russia has more than 400 companies operating in Egypt, providing about 4,500 jobs in the country. The trade exchange between the two countries has reached about 6.7 billion dollars in 2017, mostly Russian exports to Egypt, according to Egyptian official MENA News Agency.

"The anticipated Russian industrial zone would give a large push to the investment and development in the SCZone and promote the establishment of similar zones in Egypt, particularly after the success of China's TEDA economic zone," said Mokhtar al-Sherif, a retired economics professor at Mansoura University.

"The presence of a Russian industrial zone at the Suez Canal region is likely to attract more Russian investors and greatly increase the volume of Russian investments in Egypt," he told Xinhua.

Based on attracting further foreign investments, the Suez Canal Corridor development project targets not only the Egyptian market but also the African, Arab and European markets through Egypt's trade agreements with these regions.

"Egypt is open to all on economic cooperation. It invites all states to benefit from its strategic geographical location and the incentives it provides for investors in a win-win situation," Sherif told Xinhua.