Flourishing Gulf investments

Gamal Essam El-Din , Friday 10 Jun 2022

Egypt is leveraging its relations with Arab Gulf countries to offset the negative impacts of the Russia-Ukraine crisis.

Wooing petrodollars
Abdel- Wahab with Al-Thani


Mohamed Abdel-Wahab, CEO of the General Authority for Free Zones and Investment (GAFI), paid a three-day visit to Qatar this week at the head of a business delegation. The aim of the trip, he said, was to advance bilateral investment and economic cooperation between the two countries.

According to Doha’s state news agency QNA, the delegation met with Qatar’s Minister of Commerce and Industry Sheikh Mohamed Al-Thani for discussions on investment legislation.

Abdel-Wahab also met with Faisal bin Qassem Al-Thani, president of the Qatari Businessmen Association.

“We decided to exchange visits and open direct channels of communication between our respective business communities. Building on the opportunities that exist for economic cooperation and investment will help contribute to economic growth and absorb the economic shock of ongoing global crises, particularly the three-month war between Russia and Ukraine,” said Abdel-Wahab. He noted that there are more than 350,000 Egyptian nationals in Qatar and their remittances represent a key element of Egypt’s foreign exchange reserves.

In a meeting with Mansour Ibrahim Al-Mahmoud, CEO of the Qatar Investment Authority, ways to increase Qatari investments in Egypt were discussed. GAFI is working to attract Qatari investments to Egypt, particularly in the fields of agriculture, energy, tourism, food security and food industries, and the water, communications and information technology sectors, said Abdel-Wahab.

Abdel-Wahab’s visit to Qatar came two days after Finance Minister Mohamed Maait met his Qatari counterpart Ali bin Kawari in Sharm El-Sheikh on the sidelines of the 2022 Annual Meeting of the Islamic Development Bank Group. A statement following the meeting said the two ministers discussed the impact of the Russia-Ukraine war on Arab economies and how cooperation could mitigate the fallout.

The growing exchange of visits between Egyptian and Qatari officials follows the signing of a $5 billion investment deal between Cairo and Doha in March during a landmark visit of Qatari Foreign Minister Sheikh Mohamed bin Abdul-Rahman Al-Thani to Egypt. Al-Thani met with President Abdel-Fattah Al-Sisi and Prime Minister Mustafa Madbouli, and the two countries agreed to form a joint higher committee, headed jointly by their foreign ministers, to advance the process of building confidence.

Egypt, Saudi Arabia, the United Arab Emirates, and Bahrain allied against Qatar in 2017, accusing Doha of funding and sponsoring terrorist groups, including the Muslim Brotherhood. The four countries subsequently restored diplomatic, economic, and travel ties with Qatar in January 2021.

Within hours of the rapprochement Qatar’s Diar Real Estate Company officially opened the St. Regis Hotel in Cairo. President Al-Sisi appointed a new ambassador to Doha in June 2021, and a month later Qatar appointed its first ambassador to Cairo since the rift.

Al-Ahram political analyst Hassan Abu Taleb says Egypt’s growing economic relations with oil-rich Arab Gulf states reflect the strength of political ties. Cairo’s alliance between Saudi Arabia, UAE, and Bahrain against Qatar between 2017 and 2021 led to a boom in political and economic relations, resulting in “flourishing joint investments and military cooperation between Egypt, Saudi Arabia, and the UAE”.

Now, with the war between Russia and Ukraine negatively impacting the Egyptian economy, Egypt is looking to leverage its political relations with oil-rich Arab Gulf countries and secure financial and investment support to soften the shock of the war.

“The Russia-Ukraine war led to a dramatic spike in oil and energy prices, which means huge foreign exchange revenues for the Arab Gulf countries, but also huge financial pressure and economic woes for Egypt,” said Abu Taleb.

President Al-Sisi paid a three-day visit to Saudi Arabia in March, after which King Salman bin Abdul-Aziz ordered a $5 billion deposit with the Central Bank of Egypt. “The deposit comes as part of the rigid bonds and close cooperative relations between the two countries and is a gesture confirming their deep-rooted relations,” said an official Saudi statement at the time. “The step underlines the solid bilateral relations between the two countries at all levels and illustrates Saudi Arabia’s commitment to supporting Egypt in all circumstances.”

Speculation has been rife in recent days that Saudi Crown Prince Mohamed bin Salman is planning to visit Cairo. According to press reports, Saudi officials are still discussing the exact dates of Bin Salman’s visit, and sources in Egypt have told the media that Egypt and Saudi Arabia are expected to sign a number of economic and investment deals during the crown prince’s trip.

The Saudi press has also reported that a Saudi delegation, including representatives from the Public Investment Fund (PIF), will soon visit Egypt to sign $10 billion worth of deals with the Sovereign Fund of Egypt (SFE).

SFE President Ayman Suleiman said this week that the PIF has been looking to invest $10 billion in Egypt’s healthcare, education, agriculture, and financial services sectors as part of a Saudi package to support the Egyptian economy.

Cairo is also looking to capitalise on Egypt’s political relations with the UAE to help the local economy weather the Russia-Ukraine crisis.

When Prime Minister Madbouli visited Abu Dhabi in May to sign the Industrial Partnership for Sustainable Economic Growth agreement with the UAE and Jordan the UAE’s Deputy Prime Minister and Minister of Presidential Affairs Sheikh Mansour bin Zayed Al-Nahyan said the deal heralded a new era of opportunity for the three countries to boost economic growth in five key sectors — food and agriculture, fertilisers, pharmaceuticals, textiles, minerals, and petrochemicals.

Press reports at the time quoted Jamal Saif Al-Jarwan, secretary-general of the UAE International Investors Council (UAEIIC), saying that the UAE is looking forward to increasing its investments in Egypt to $35 billion over the next five years.

“Emirati investors will be your partners forever,” said Al-Jarwan.

*A version of this article appears in print in the 9 June, 2022 edition of Al-Ahram Weekly.

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