$12bn total aid pledged by Gulf states should assist Egypt’s beaten economy if properly used, experts say.
Kuwait, the oil-rich US ally, has announced an aid package of $4bn to Egypt, a day after neighbouring United Arab Emirates (UAE) and Saudi Arabia pledged a total of $8bn in aid, one week after the ouster of Islamist president Mohamed Morsi.
According Kuwait’s official news agency, KUNA, $2bn of the package will be in the form of deposit to the Central Bank of Egypt, while $1bn will be offered as a non-refundable grant. The Gulf state will also provide cash-strapped Egypt with fuel and petroleum products worth $1bn, KUNA’s report said.
Commenting on the aid, Bank of America Merrill Lynch Global Research said in a report issued on July 10 that it “will alleviate the concerns about the external position and the transition, in our view,” adding “we suggested Egypt need roughly $8bn to keep foreign international (FX) reserves stable over the next 18 months.”
“This would depend on the Central Bank of Egypt FX management framework as well,” added the report.
“The level of success of any aid mainly relies on how it will be employed and placed in the economy,” said Hanaa Ebeid, a senior researcher at the Ahram Centre for Strategic Studies.
“We have major problems such as the budget deficit and the low foreign reserves, so we can consider it as a temporary relief to assist normal Egyptian everyday life, but it will not result in an economic development,” she added.
When asked whether the introduction of violence after the 30 June revolution would affect the delivery of these aids, Ebeid said: “The violence itself will not have a major influence on the economy but political stability is a background condition for the economic development of any country.”
Angus Blair, the CEO of Signet Institute, defines the lack of political stability that the country is experiencing as “a fundamental problem”.
“Aids will assist the country getting the imports it needs but unless the issue of violence is solved, the country will face problems paying the bills,” Blair added.
The UAE and Saudi Arabia announced that Egypt will receive an $8bn aid package; the KSA will contribute with $5bn and UAE will offer $3bn. Saudi’s aid will be divided to $1bn cash, $2bn for petroleum products and another $2bn deposit. The UAE will contribute a $1bn grant and $2bn interest-free deposit with the central bank.
Several businesses have launched the 306306 “Support Egypt” campaign, announced in a statement issued by the central bank on 7 July. Contributions to these bank accounts were not limited to businessmen; several syndicates have also showcased their support by providing donations.
Hazem El-Beblawi, a former finance minister and former deputy prime minister for four months during the transitional period, was appointed as the new prime minister on 9 July, and Mohamed ElBaradei, the former director of the International Atomic Energy Agency and leader of the National Salvation Front, was appointed as the vice-president of foreign affairs.
Source: http://www.dailynewsegypt.com/2013/07/1 ... om-kuwait/
Ad blocker detected: Our website is made possible by displaying online advertisements to our visitors. Please consider supporting us by disabling your ad blocker on our website.
Advice, information and discussion about Egypt in general.
Moderators: DJKeefy, 4u Network
1 post • Page 1 of 1
- Similar Topics
- Last post
Egypt to receive $1 bn grant from Kuwait: Ambassador
by DJKeefy » Fri Apr 04, 2014 8:57 am » in Know Egypt
- 0 Replies
- 149 Views
Last post by DJKeefy
Fri Apr 04, 2014 8:57 am
Kuwait to loan Egypt $106 million to develop railway
by DJKeefy » Fri Oct 04, 2013 9:15 am » in Know Egypt
- 4 Replies
- 393 Views
Last post by LovelyLadyLux
Sat Oct 05, 2013 7:34 pm
Egyptians endure ‘slavery’ in Saudi Arabia and Kuwait
by DJKeefy » Sun Aug 21, 2016 5:48 pm » in News and Sport
- 4 Replies
- 383 Views
Last post by Stevepj
Tue Aug 23, 2016 10:48 am
Every Egyptian will receive medical insurance services...
by DJKeefy » Mon May 15, 2017 9:02 pm » in Know Egypt
- 3 Replies
- 222 Views
Last post by Dusak
Tue May 16, 2017 6:43 am
Egypt's treasures to receive a new $1 billion home
by DJKeefy » Wed Jun 06, 2018 5:43 pm » in History and Archaeology
- 1 Replies
- 371 Views
Last post by newcastle
Wed Jun 06, 2018 6:23 pm