ABOUT UAE INDUSTRIAL PARTNERSHIP FOR SUSTAINABLE ECONOMIC GROWTH (IPSEG)

Pursuant to the federal Decree of the United Arab Emirates No. (19) of 2022 on Measures to Improve the Management System in the fields of Investments and Foreign Trade, The UAE Industrial Partnership For Sustainable Economic Growth (IPSEG) was established with the aim of developing local content with all its components at the level of the national economy, and improving and following up on government procurement. To achieve development and financial goals in accordance with national visions, strategies and plans, and in accordance with the applicable laws and regulations.

The United Arab Emirates, the Arab Republic of Egypt, the Hashemite Kingdom of Jordan and the Kingdom of Bahrain signed and entered into the UAE Industrial Partnership for Sustainable Economic Growth (IPSEG) in 2022. A US$10 billion investment fund has been allocated and will be managed by the Abu Dhabi Project Implementation Steering Committee to accelerate work on the partnership across five priority sectors Food, Agriculture, Fertilizers, Pharmaceuticals, Textiles, Minerals, Petrochemicals which functions as a sovereign wealth fund for the United Arab Emirates and partnering countries.

The Partnership aims to establish large joint industrial projects, create job opportunities, contribute to increasing economic output, diversify the economies of the partner countries, support industrial production and increase exports and imports.

This is based on the directives of the President His Highness Sheikh Mohamed bin Zayed Al Nahyan. This partnership also reflects the ability of the countries in the region to strengthen their relations and launch new projects and industries within the framework of an integrated industrial system that provides promising opportunities for future generations. Developing the industrial sector which the participating countries will enable industrial growth in the partnering nations, diversify the economy and increase the sector's contribution to the gross domestic product.

The partnership identified five sectors of mutual interest to the three countries, including petrochemicals; metals, minerals and downstream procurement of products; textiles; pharmaceuticals; and agriculture products, food products, fertilisers products and other products sectors that may be of interest to this great Partnership in future.

The $10 billion investment fund comes amid the United Arab Emirates's efforts to support the growth of the local industrial sector, enhance its role in stimulating the national economy, and double its contribution to gross domestic product to Dh300bn ($82bn) by 2031. The United Arab Emirates, the Arab Republic of Egypt, the Hashemite Kingdom of Jordan and the Kingdom of Bahrain collectively have a GDP of about $765bn and more than 60 million young people to care for and secure a brighter future for them.

The UAE Industrial Partnership For Sustainable Economic Growth (IPSEG) is working to ensure successful procurement of goods from different countries and development of regions in the United Arab Emirates. The aim for rural development is the process of improving the quality of life and economic well-being of people living in rural areas of the United Arab Emirates and partnering countries, often relatively isolated and sparsely populated areas.

The authority's tasks also include working on developing a database for suppliers, in addition to managing civil contracts in government agencies within the Economic Balance Program.


Strategic Goals: Develop local content capable of meeting demand and achieving economic impact Maximizing the benefit of government procurement and activating its role in economic development Contribute to achieving transparency and excellence in government procurement processes.


Initiative For COVID-19 Pandemic: An exceptional new initiative to mitigate the financial and economic impact of the COVID-19 pandemic on 208 national products, by providing an additional price premium rate of up to 20% (in addition to the 10% price premium indicated in the regulation) for the national products specified in the initiative list, bringing the total price premium to a maximum of 30%. This premium is added to prices of the foreign counterparts of the listed national products in the bids offered in government tenders. The new initiative also provides special support for the Active Pharmaceutical ingredient (API) by granting any drug with nationally-manufactured active ingredients an additional 10% premium rate, regardless if the product is included in the initiative’s list.


The Initiative Aims To: Support Local Content and national products. Encourage national manufacturers to increase their Local Content. Reduce the economic and financial impact on the targeted sectors. Empower local capabilities by supporting the products targeted by the new initiative. Upgrade the national API manufacturing capabilities.


Legislative Framework Of The New Initiative: Local Content, SMEs, and Listed Companies’ Preference regulation granting local content, SMEs and publicly listed companies preference in government tenders. Article Ten: The national product is granted a price premium, by assuming the price of the foreign product 10% higher than indicated in the bid. The premium rate may be increased through an agreement between the Governing Council of the UAE Industrial Partnership For Sustainable Economic Growth (IPSEG) and the Center of Spending Efficiency, provided that the modified rate is explicitly stated in the tender documents.


The Products And Sectors Targeted By the Initiative: 41 products in the medicine and pharmaceuticals sector. 135 products in the medical supplies sector. 32 products in other manufacturing sectors. Pharmaceutical products from nationally manufactured APIs. Increasing the 10% price premium indicated in the Local Content, SMEs, and Listed Companies’ Preference regulation, up to a maximum of 30% for 208 products, as per a preset criteria.


Goals Of The Initiative: Encourage national manufacturers to increase their Local Content. Support Local Content and national products. Reduce economic and financial impact on targeted sectors. Empower local capabilities through the products targeted by the initiative. Upgrade the national API manufacturing capabilities.


Targeted Sectors: Medicine and pharmaceuticals sector. Medical supplies sector. Other manufacturing sectors. Upgrade the national API manufacturing capabilities.


Anticipated Impact: Spending US$2.5 billion to US$3 billion on national factories during execution Support 208 products impacted by COVID-19 Local Content, SMEs, and Listed Companies’ Preference Policy: The Local Content, SMEs, and Listed Companies’ preference policy was drafted by the UAE Industrial Partnership For Sustainable Economic Growth (IPSEG) in cooperation with the relevant authorities, and approved through a regulation by the Council of Ministers within the new Government Procurement Law. The inclusion of local content requirements in the new Government Procurement Law aims to enhance local capabilities and products, and give national products a priority through the price premium policy. The regulation includes a list of national products to be purchased from national manufacturers, the National Products Mandatory List. The Industrial Partnership For Sustainable Economic Growth, in cooperation with the Center of Spending Efficiency, will have a major role in determining the projects that should implement the Local Content minimum threshold policy.