2024-03-16 15:02:39
The UAE will pump “$35 billion in direct investments” within two months into Egypt, according to the agreement to develop the Ras El Hekma region signed between the Egyptian and Emirati governments, in what was described as the largest foreign investment in Egypt’s history.
At the beginning of this month, Egypt received the first payment agreed upon by the two countries, valued at 15 billion dollars, which is 10 billion dollars that will be transferred directly, in addition to 5 billion that forms part of an Emirati deposit with the Central Bank.
The investment aims to develop 170.8 million square meters in the Ras El Hekma region on the Mediterranean Sea in northwestern Egypt.
But what will the UAE get in return for its investment? A report from the agencyBloomberg“The huge financial injection aims to achieve Abu Dhabi’s strategic goals, as the Emirati capital is thinking regarding how to make money while building political influence, according to what the report quoted ten diplomats, officials and other informed people.
By employing an amount equivalent to 7% of its gross domestic product, the UAE seeks, through a combination of financial strength and geostrategic goals, to obtain a major role in shaping events in the region and beyond.
The report indicates that the investment comes at a time when Abu Dhabi is competing for influence with other Gulf powers, Saudi Arabia and Qatar, with American influence diminishing with the intensification of the war between Israel and Hamas, which represents a new challenge in a part of the world that is important for energy production and supply lines.
UAE President Sheikh Mohammed bin Zayed Al Nahyan quickly gave the green light to support a country that was at the heart of the 2011 uprisings that toppled regimes in the region, according to people familiar with the decision who requested anonymity.
“The worsening economic challenges in Egypt are not in the UAE’s interest,” said Ibtisam Al Ketbi, head of the Emirates Policy Centre, an Abu Dhabi-based think tank.
“The goal is to ensure stability” and avoid the return of Islamist groups such as the Muslim Brotherhood, which thrive in times of turmoil, she told Bloomberg.
The timing and size of the deal and the rapid delivery of funds surprised financial markets and even the International Monetary Fund. Three other sources told the agency that the Fund, which was expected to be the main supplier of emergency financing to Egypt, was not aware of the discussions at the beginning.
The deal shows the UAE’s desire to “participate in the economic rescue package drawn up by the international community for geopolitical reasons, and to preserve the stability of Egypt and the region,” said Ziad Bahaa El-Din, former Egyptian Deputy Prime Minister and former head of the Investment Authority.
Riccardo Fabiani, director of the North Africa Project at the International Crisis Group, says that investing in Ras al-Hekma is not only a good deal financially for the UAE, but also a way to increase influence over Egypt, although he acknowledged that the deal is unlikely to change Cairo’s positions on the crises in neighboring Sudan and Libya, where Varies with the Emirates.
Analysts doubt that the decision-making process in Cairo will be affected by the UAE’s massive financial support, as “financial aid or investment does not automatically translate into political or diplomatic influence,” according to what Bloomberg quoted Merit Mabrouk, a senior fellow at the Washington-based Middle East Institute.
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