(Bloomberg) -- On a clear winter’s day earlier this year, those living on the vast Egyptian headland of Ras El-Hekma who looked up from the dun-colored scrub...
What Does the UAE Get for Its $35 Billion Investment in Egypt? -- On a clear winter’s day earlier this year, those living on the vast Egyptian headland of Ras El-Hekma who looked up from the dun-colored scrub would have seen an aircraft circling the sky. Far above, locals were told, top United Arab Emirates officials were taking a special interest in one of the Mediterranean coast’s last great wildernesses.A $2 Billion Airport Will Test Modi’s Mission, Adani’s AmbitionsWeeks later, on Feb.
That wider imperative to shore up Egypt — also a core transit country for migrants to Europe — is underlined by European Union plans for an aid package worth some $8 billion, including in energy and the Suez Canal Economic Zone. European Commission chief Ursula von der Leyen is due in Cairo on Sunday.
Egypt’s track record with megaprojects is spotty at best. A showpiece new administrative capital that’s been taking shape in the desert east of Cairo since 2015 added to its debt woes. Boasting Africa’s tallest tower and the country’s biggest mosque and church, it’s struggled to secure foreign investment and sees few visitors beyond those staffing its shiny new government ministries. It has yet to be given a name.
ADQ’s announcement was bullish on Ras El-Hekma’s potential, and people familiar with the UAE’s thinking say there’s compelling economic rationale. But with the average land price in the area somewhere between $100-$120 per square meter, the transaction wasn’t exactly a fire sale. The deal shows the UAE’s wish to “be involved in the economic rescue package put together by the international community for geopolitical reasons, and to maintain the stability of Egypt and the region,” said Ziad Bahaa-Eldin, a former Egyptian deputy prime minister and ex-head of its investment authority. But, he added, it also displays “a new attitude that looks at the return from such economic interventions and tries to reach a win-win formula.
The Gulf powers are often at odds on foreign policy. The UAE has been the most muscular in recent years, taking the historic step of recognizing Israel and allegedly backing renegade military strongmen in Libya and Sudan, as well as a secessionist movement in southern Yemen. It has also invested heavily in state projects and infrastructure in the Horn of Africa as it looks to consolidate its influence around the Red Sea, a vital trade conduit now imperiled by Houthi rebel attacks.
Yet the price of maintaining its idea of stability is rising. Between 2013 and 2022, the UAE, Saudi Arabia and Kuwait provided a combined $34 billion to Egypt in the form of cash grants, oil shipments and central-bank deposits, according to data from the International Institute for Strategic Studies. In 2024, the UAE is due to send more than that amount in just two months.
“For Egypt, which maintains an independent diplomatic line, financial aid or investment does not automatically translate into political or diplomatic influence or malleability,” said Mirette Mabrouk, a senior fellow at the Washington-based Middle East Institute.Gold-Medalist Coders Build an AI That Can Do Their Job for ThemMichael Whatley rhetorically asked Friday, “Were you better off four years ago than you are today? The answer for this entire country is no.
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