Egypt approaches Saudi, Kuwait for more money

The aid, the official said, would allow the government to carry out more development projects during the current fiscal year.

Egypt approaches Saudi, Kuwait for more money

World Bulletin / News Desk

Egypt is currently holding talks with Riyadh and Kuwait City in hopes of securing a fresh package of financial aid, a high-level Finance Ministry official said Monday.

Results of the talks with the two Gulf countries – known for their support of Egypt's military-backed interim government – will be announced soon, the official told Anadolu Agency on condition of anonymity.

He expects those Gulf nations that voiced support for Egypt's "transition" after the fall of elected President Mohamed Morsi to announce a fresh package of economic aid to Cairo, following an earlier package pledged this summer.

"Saudi Arabia and Kuwait top the list of countries that expressed readiness to pump more money into the Egyptian economy," the official said.

Following the ouster of Morsi – who hails from Egypt's Muslim Brotherhood – by Egypt's powerful military establishment, Saudi Arabia, the United Arab Emirates (UAE) and Kuwait all pledged to provide Egypt with a combined total of $12 billion in aid.

The Finance Ministry official referred to major improvements in Egypt's budget, particularly after the UAE announced that it planned to pump upwards of $4.9 billion into development projects in Egypt.

The aid, the official said, would allow the government to carry out more development projects during the current fiscal year.

He expects the new Arab aid package to equal that offered Egypt in the wake of Morsi's July 3 ouster.

Part of the Gulf aid, he said, would be in the form of fuel shipments, reducing pressure on petroleum subsidies in Egypt until the government can begin the second phase of a planned subsidy reform scheme.

In the 2012/13 fiscal year, Egypt coughed up a whopping 128 billion Egyptian pounds (roughly $18.4 billion) to subsidize the local petroleum sector, accounting for almost one quarter of the entire state budget.

The UAE has offered an additional $3.9 billion in aid to Egypt. The Gulf state had previously declared its intention to give Egypt $3 billion.

The UAE aid includes a $1 billion cash payment that was already transferred to Egypt in July. The UAE will also provide more than $1 billion to help Egypt purchase its petroleum needs.

The remaining cash will likely be dedicated to development projects in various sectors.

The Finance Ministry official said the Gulf aid would help keep Egypt's budget deficit within its projected 300-billion-Egyptian-pound target.

Last Mod: 29 Ekim 2013, 09:40
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