(Photo from Army Spokesman Facebook Page)
Economists describe President Abdel Fattah Al-Sisi’s to Kuwait Monday as a move to reassure the Kuwaiti leadership and financial and business communities about Egypt’s investment climate.
It is hoped that this new reassurance will pave the way for a flow of new Kuwaiti investments.
Al-Sisi will carry a message of reassurance to the Kuwaiti investors about business practice climate in Egypt, said Gamal Bayoumi, Secretary General of the Arab Investors Union. He added the visit will be followed by consecutive delegation visits with Kuwaiti business representatives, to explore and contribute to investment opportunities in Egypt, among Kuwaiti efforts to help Egypt overcome its instability.
Bayoumi said that he expects positive outcomes from Al-Sisi’s visit, which is expected to ease the Kuwaiti fears of the security situation and the crippling in legislation as well as the bureaucracy that hampered investment. Al-Sisi will explain Egypt’s efforts to improve the business environment with a comprehensive review of all the regulating laws of the economic activity and investment in Egypt, he added.
Al-Sisi’s talks during his visit will focus on economics, most importantly how to increase Kuwaiti investments and how to resolve disputes on investments which are hampered.
After the ouster of former president Mohamed Morsi in July 2013, Kuwait announced that Egypt would be given aid worth $4bn, $2bn of which for the Central Bank of Egypt (CBE), $1bn for oil aid, and the last $1bn for financial aid.
Fakhry Elfiky, former assistant executive director of the International Monetary Fund (IMF), believes that Kuwaiti investments in Egypt are still low, especially given Kuwait’s external investments are worth $500m. He added that Kuwaiti aid and investments were not affected by the huge drop in oil prices, which decreased by more than 50%. He explained that Kuwait is capable of working for tens of years with oil prices at $60/barrel.
The cost of oil aid from the Gulf states to Egypt, which stood at $700m/month, declined by 50% as a result of the drop in global oil prices, according to Elfiky. This makes it easier for Egypt to receive aid to cover its summer needs from electricity stations.
