by Maye Kabil: Gulf countries played an important role in supporting the Egyptian economy after 30 June, either by financial, fuel aids and facilities or by directing more investments to Egypt.
Their latest contributions were in the economic conference held in Sharm El Sheikh last March 2015, where Saudi Arabia, Kuwait and the UAE pledged $12bn in economic assistance to the country. The financial packages included a combination of aid and investments: the UAE pledged $2bn as deposits in the Central Bank of Egypt (CBE) and an additional $2bn in investments; Saudi Arabia promised to make $3bn worth of investments and add a further $1bn to the CBE; and Kuwait brought the total assistance received from the Gulf to $12bn by promising $4bn worth of investments. Oman also pledged $500m, half aid and half investment, over the next five years.
Many gulf companies also committed themselves to invest in Egypt. Mostly from UAE, firms announced in the economic conference their coming investments, including Majid Al-Futtaim, which plans to invest LE5bn ($653.4m) in eight real estate projects over the next five years; Al-Swidan Group, which plans to invest $6bn in a grain logistics hub in Damietta; and Khalifa bin Butti Bin Omeir (KBBO) group, which plans to invest $2bn in key sectors such as health, waste management, money exchange and renewable energy.
The total value of gulf investments in Egypt reached around $50 billion at the beginning of 2014, according to the ministry of investment. The Saudi investments come in the first place with $5 billion, followed by UAE and Kuwait.
Gulf countries’ aid to Egypt during a year and a half after 30 June, till the end of 2014, reached around $20 billion. This amount included huge amounts of fuel exports to Egypt in addition to deposits in the central bank to support the economy.
The Emirati package included more partnership with the government in a wide range of projects in fields of nutrition, health care, preparation for labour market, transportation, infrastructure and electricity.
The new Egyptian budget proposal shows that Egypt is depending much less this year on gulf aid leaving more space to direct investments.
