When the World Economic Forum made the decision to cancel its regional investment event in Egypt’s Red Sea resort town of Sharm El-Sheikh earlier this year, its message was clear: the security threat on the Sinai peninsula had become a power-keg situation that could blow at any moment. This was, of course, the unilateral verdict of the Switzerland-based forum. In contrast, since the event was cancelled, Gulf leaders have chosen to stick by Egypt’s side, shrugging off extremism concerns to personally visit the Arab nation and pledge ever-greater sums of economic support.
First came an official visit from Saudi Arabia’s King Salman bin Abdulaziz Al Saud in early April. Saudi Arabia, which is Egypt’s top source of investment, launched $16 billion joint fund announced by King Salman, half of which would be paid for in full by the Kingdom. Then, less than two weeks later, His Highness Shaikh Mohammed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, made his visit to Cairo. The UAE, for their part, would be allocating $4 billion in assistance, with half of the money going directly to support Egypt’s central bank. The latest Gulf investment came on May 31 by Kuwait’s national fund. It is a telling example of the Gulf’s undaunted support: While the rest the world abandoned Sinai, Kuwait has extended its presence, signing $100 million to develop desalinization facilities in the peninsula’s south as part of a long-term strategy totalling $300 million annually over the following five years.
Since being sworn into office in 2014, Egypt’s President Abdel Fattah Al Sisi has trumpeted a roadmap of vital infrastructure projects geared to re-engineer a struggling economy, which has attracted investor attention near and far.
President Al Sisi’s crowning moment came last August when world leaders descended for the inauguration of the $8.5-billion expansion of the Suez Canal, a project the government says will increase revenue up to $13.2 billion annually by 2023. Then there is the dream to build a “New Cairo”, which has now gathered confidence following official backing by state-owned China State Construction Engineering Corporation. A host of other mega-infrastructure projects are to follow, including projects along the northwest coast.
Skeptics have had their say, calling these national projects “wishful thinking”. Yet, the world’s largest Arab nation and now Africa’s second largest economy is clearly too big to ignore for Gulf investors, who have committed to remaining in Egypt through the thick and thin.