Egypt and Saudi Arabia are the key partners in an alliance that is seeking to restore law and order to the Arab world. Both countries share a vision of rebuilding the region’s nation-states to stable governments working for the betterment of their people and exterminating the scourge of extremism.
The warmth of the welcome given to King Salman Bin Abdul Aziz of Saudia Arabia during his visit to Egypt by President Abdul Fattah Al Sissi is a strong indication of how much both countries recognise the importance of their relationship to themselves and the region at large.
The ongoing Saudi investment and support for Egypt received a major boost during the Saudi King’s visit, which began last Thursday. The most eye-catching announcement was the plan to build a huge bridge over the mouth of the Gulf of Aqaba linking the two states.
But it was also very important that this announcement included the ending of a long-standing territorial dispute with Saudi Arabia over sovereignty of the two islands of Tiran and Sanafir, over which the new bridge will pass.
Other economic announcements include a $16 billion (Dh58.7 billion) Saudi-Egyptian investment fund, the creation of an economic free zone in the Sinai, a mega power project in Asyut just south of Cairo, an agricultural project in the Sinai, a manufacturing zone close to the Suez Canal, and a memorandum of understanding (MOU) between Saudi Aramco and Egypt’s pipeline company SUMED.
This economic support lavished on Egypt continues the Saudi and Gulf decision to support the floundering Egyptian economy after 2013 when Al Sissi took over.
But such generous support should run parallel with Egyptian efforts to restore their own economy by liberalising the country’s famously inefficient red tape and government regulation of business, which also allows far too many opportunities for corruption.
To date the Egyptian government has been slow to introduce major structural reforms, and it is banking on a hope that the pursuit of mega-projects will trigger an economic lift for the country, leading to a trickle-down of wealth.
Saudi Arabia has Egypt’s unstinting political support in the struggle against Iranian interference in the region, which is one of the major reasons for the Saudis to continue backing the Egyptian economy. But the Saudis have shifted from their earlier direct support such as putting in large sums to support the Egyptian currency, to looking for investments that will produce a financial return in the end.
