Countries such as Egypt, Pakistan and Sudan share great human potential and greater economic problems, and have also received major financial aid from the Gulf states, particularly Saudi Arabia, Qatar and the United Arab Emirates.
And the American Wall Street Journal says that the three countries, in addition to Turkey, received billions of dollars in aid “during a historic period of financial stress”.
And on Wednesday, Doha welcomed Egyptian President Abdel Fattah al-Sisi on his first visit as president to Qatar, following a crisis in relations between the two countries against the backdrop of the years-long Gulf dispute.
The official Qatar News Agency quoted Sisi as saying that “the field of economic and investment cooperation between the two countries is one of the most promising areas of interaction between them.”
It also quoted the Egyptian president as saying that “this matter has been reviewed extensively and in detail by senior Egyptian and Qatari officials over the past year, in light of the multiplicity and diversity of investment opportunities in Egypt in all fields, in light of of the comprehensive development process that takes place in all parts of it.”
The spokesman of the Egyptian Presidency, Ambassador Bassam Rady, said that Cairo and Doha, in the presence of the two heads of state, signed a memorandum of understanding between Egypt’s Sovereign Fund for Investments and Development and the Qatar Investment Authority, and ‘ a memorandum of understanding in the field of social affairs between the Ministry of Social Solidarity and the Qatari Ministry of Social Development, and a memorandum of understanding regarding Cooperation in the field of ports between Egypt and Qatar.
Sisi, according to the agency, “identified the natural gas and renewable energy sectors such as green hydrogen and the petrochemical industry, as well as strengthening joint cooperation between Egypt’s sovereign fund and its Qatari counterpart.”
The agency also said that Sisi pointed to “other areas of joint economic cooperation, namely agricultural projects that come within the framework of dealing with the current global crisis in the supply of grains and food chains.”
The Wall Street Journal says the financial aid, provided by Saudi Arabia and other Gulf states, serves as a “diplomatic tool” they have long used to build influence across the region.
The paper says the rise in oil and gas prices has enabled the Gulf states to return to this policy.
Saudi Arabia and other Gulf states with oil revenues are pouring in to bail out their crisis-ridden neighbors such as Egypt, Pakistan and Turkey, exacerbating the diplomatic tool they have long used to build influence across the region.
Higher oil prices are expected to generate $1.3 trillion in additional revenue over the next four years for energy exporters in the Middle East and North Africa, according to the International Monetary Fund.
The Egyptian expert on international relations, dr. Ayman Salameh said: “It is certain that Egypt does not have Qatari contributions in this era, and perhaps in this difficult economic period that Egypt is going through.
But Salameh told Al-Hurra that “interests are mutual between the two countries,” though he referred to what he described as common “intersections” such as the issue of Syria, Qatar’s influence in the Arab League, and Al Jazeera -journalists imprisoned in Egypt. .
“The Saudis came to Egypt’s aid because they believe that Egypt’s stability and the survival of the regime are important to them,” Yasmine Farouk, a non-resident scholar at the Carnegie Endowment, told the paper.
Egypt is of great economic and geopolitical importance, as it controls the Suez Canal and has one of the largest standing armies in the Arab world.
“The same goes for the UAE and the Qataris, they need Egypt’s support for foreign policy,” Farouk added.
Qatar’s finance minister, Ali bin Ahmed al-Kuwari, said in an interview last month that the region offers great opportunities. “It should be a win-win situation,” he said.
The Wall Street Journal said Saudi Arabia, Qatar and the United Arab Emirates have pledged more than $22 billion to Egypt this year as the country tries to stave off a default.
It also quoted unnamed officials as saying that the three oil-rich countries pledged more than $10 billion in August to support Pakistan at a time when the devastating floods have worsened the country’s economic woes.
Turkey, which faces one of the world’s highest inflation rates, has also received billions of dollars in investment pledges and foreign exchange aid from its former rival, the United Arab Emirates.
The newspaper says that the aid represents a shift from the situation a few years ago, when the drop in oil prices in the face of the Corona pandemic forced the Gulf states to reconsider their financial support for the poorest countries in the region.
The windfall for oil producers coincides with a period of historic pressure for low-income countries.
The war in Ukraine has already driven up energy and food prices and fueled inflation worldwide, driving up borrowing costs.
Pakistan, Egypt and Tunisia are among the countries that have turned to the International Monetary Fund for rescue packages.
“Countries already weakened by the slow increase in debt are suddenly facing external shocks the likes of which we haven’t seen in a long time,” Patrick Curran, chief economist at Tellimer Research, told the paper, adding that those countries were forced “to scramble to find alternative ways to meet their financing needs.”
Money for political influence
A wave of financial pledges is bridging the gap between what countries need and the amount the IMF can provide, according to Jihad Azour, director of the IMF’s Middle East and Central Asia department, who spoke to the Wall Street Journal.
A batch of Gulf funds helped Pakistan secure a $4 billion loan from the International Monetary Fund last month and will also be crucial to Egypt’s bailout plan, which is still being negotiated.
Support from the Gulf, along with debt relief from China and IMF programs, helped bring investors back to the markets in those countries.
Pakistan’s currency, the rupee, rose about 10 percent against the US dollar in August, after posting its worst monthly loss in 50 years in the previous month.
Egypt’s dollar-backed bonds also fell, with the yield on dollar-denominated bonds due in 2024 falling to less than 10 percent, according to Tradeweb, from more than 16 percent at the end of July when concerns about the country default on its foreign debt has reached a peak.
Karen Young, a researcher at Columbia University, tells the paper that Gulf aid is now “different”, that “it’s really about buying assets, and it’s not the same kind of bailout” that it was before not.
More recently, Gulf states have channeled aid to countries through investments made by their large sovereign wealth funds.
In recent months, Abu Dhabi’s sovereign wealth fund ADQ bought a Turkish pharmaceutical company and took stakes in Egyptian fertilizer companies, one of the country’s biggest banks and a shipping company, according to the newspaper.
Gulf countries also deposited about $28 billion into the coffers of the Central Bank of Egypt, according to central bank data. The funding helped fill the gap left by foreign investors who pulled billions of dollars from Egyptian assets after the start of the war in Ukraine.