Monday, October 07, 2013

US-allied Gulf States to Invest Money in Military-controlled Egyptian State

Gulf states ready to invest in Egypt state projects: Minister

Reuters, Monday 7 Oct 2013

First round of Gulf projects in Egypt to be announced soon, deputy prime minister for economic affairs says

Cairo is hoping to start announcing details of its investment programme for this fiscal year later this month and Gulf Arab countries have agreed to provide additional financial support, a senior minister said.

Ziad Bahaa El-Din, deputy prime minister for economic affairs, did not say how muchSaudi Arabia, Kuwait and the United Arab Emirates would contribute but it would be in addition to the $12 billion that they agreed to give Cairo in aid after the army ousted Islamist president Mohamed Morsi on July 3.

Egypt's cabinet has flagged a LE120 billion investment programme for the fiscal year through June 2014.

"Discussions with the Emiratis have been going on for some time, and the final programme has not yet been announced due to caution on both sides to make promises that have not been fully worked out," Bahaa El-Din told Reuters on Sunday.

"I am hoping that we will announce at least the first package of projects soon," he said. "It will be soon, it could be within days."

Bahaa El-Din said the Gulf countries had agreed in principle to invest in projects that are part of the planning and finance ministries' programme.

"There are programmes that we the government are committed to spending on in any case. They are saying, I will undertake the expenditures on that," Bahaa el-Din said. "This is a form of budget support."

The three Gulf countries have also agreed to supply Egypt with badly needed oil products until the end of December, Oil Minister Sherif Ismail said last week, and Egypt has been in talks with them to continue the supplies into 2014.

Bahaa El-Din is part of a transitional government that was appointed after Morsi's ouster until a new constitution can be drafted and a new parliament and president elected. The transition is scheduled to be finished next spring.

The interim government has said it will avoid austerity measures and instead stimulate the economy by pumping in funds.

It wants to avoid unpopular moves to plug the budget deficit such as increasing taxes or cutting food or energy subsidies that eat up around a fifth of the state budget.

Bahaa El-Din said that the Kuwaitis, who in late September deposited $2 billion with Egypt's central bank, were also prepared to provide project finance.

"There are discussions with them. When the time comes we will announce them," he said.

Saudi Arabia's ambassador to Cairo said in August that the kingdom was studying a report submitted by Egypt detailing its financial needs through June 2014.

http://english.ahram.org.eg/News/83459.aspx

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