CAIRO: Qatar is looking at pumping up to $10 billion through investments and projects into Egypt, the Gulf emirate’s ambassador was quoted as saying Tuesday, offering new hope to an economy ravaged by the unrest that ousted former president Hosni Mubarak.
A meeting slated for Saturday between Qatari and Egyptian officials, at which joint projects are expected to be signed, comes at a crucial time for the military rulers in Cairo.
Months of protests that built on the unrest that toppled Mubarak in February have crushed the vital tourism sector, slashing foreign investments in the nation and roughly halved manufacturing and exports, according to Egyptian officials. Meanwhile, the deficit is expected to widen sharply and Egypt has said it will need between $10 to $12 billion for the fiscal year that begins in July to cover its mounting expenses.
The meeting builds on earlier reciprocal visits by Qatar’s emir and Egypt’s prime minister and is part of an outreach effort by the Cairo government to tap the oil rich Gulf Arab governments for help, as well as others in the international community.
Explaining his country’s decision to fund projects and pump investments into Egypt, Qatar’s ambassador in Cairo, Saleh Abul-Enein, said he believed it was necessary to support the North African nation in the coming period as it grapples with the "burdens it inherited from the previous regime."
In an interview with the state-run daily newspaper, Al-Ahram, he said that the projects to be signed were ones discussed between Qatar’s emir and Egypt’s military rulers.
"I believe these projects, when implemented, will exceed $10 billion, God willing, and will be productive investments in Egypt," Abul-Enein said, adding that Qatar has begun laying out the "broad plan" for this cooperation.
The investment would be the latest offer of aid for Egypt as the military rulers and the interim civilian government face an impasse of sorts. Protesters are demanding pay hikes and better services — all of which cost cash the government can’t spare given that the unrest has slashed manufacturing and productivity, driving economic growth forecasts for the current fiscal year to as low as 1 percent. Pre-revolution estimates had seen GDP growth at around 5.8 percent for the fiscal year ending June 30.
Already, the United States and Saudi Arabia have stepped up with billions of dollars in aid and investments, while Egyptian officials said they are nearing a deal with the World Bank for a $2.2 billion loan. Officials have also reached out to the International Monetary Fund and are to attend the upcoming Group of Eight industrialized nations meeting in Paris.
The focus on the part of the government is on reactivating the engine for growth. Officials are pushing infrastructure projects because they hold some of the best potential for job creation, as well as a trickle down effect in other sectors.
Finance Minister Samir Radwan had earlier mentioned that Qatar’s government was prepared to finance a port in the western outskirts of Alexandria at Malahat, which it said would be the world’s largest, Al-Ahram said.
Saudi Arabia has pledged a $4 billion aid package to Egypt that includes a $1 billion deposit at the Central Bank of Egypt and $500 million in bond purchases, Al-Ahram newspaper reported on Sunday.
On Thursday, US President Barack Obama said he would relieve Egypt of up to $1 billion in debt and guarantee another $1 billion in borrowing to finance infrastructure and job creation.
The European Bank for Reconstruction and Development said on Saturday it would explore how to direct funds to Egypt and other Arab states in the same way it supported communist states after the fall of the Iron Curtain more than two decades ago. –Additional reporting by Reuters
