Tuesday, May 21, 2024

El-Sisi meets MbS as Egypt’s economic woes deepen

Egyptian President Abdel Fattah el-Sisi has met Saudi Arabia’s Crown Prince Mohammed bin Salman in the Red Sea city of Jeddah. The visit came as Cairo tries to navigate through an acute financial crisis.

The two leaders met on Monday to discuss joint cooperation and regional developments, Saudi state-run SPA news agency reported. El-Sisi arrived in Saudi Arabia on Sunday.

Other Saudi and Egyptian officials, including Saudi national security adviser Musaad bin Mohammed al-Aiban and Egypt’s intelligence chief Abbas Kamel, attended the meeting, it added.

Saudi Arabia has been providing substantial financial support to keep the Egyptian economy afloat and has repeatedly come to Cairo’s aid since el-Sisi took power after leading the overthrow of democratically elected President Mohamed Morsi in 2013.

Saudi Arabia and other Persian Gulf countries made deposits in Egypt’s central bank and pledged major new investments when Egypt’s financial difficulties were exposed and exacerbated by the fallout from the invasion of Ukraine last year.

But el-Sisi’s visit comes after Riyadh signalled that it would no longer provide financial support to its allies without conditions attached.

During a meeting in January in Davos, Switzerland, where the world’s most powerful political and economic actors gather once a year, the Saudi finance minister made the shift clear.

“We used to give direct grants and deposits without strings attached,” Mohammed al-Jadaan said, adding, “We are changing that. We are working with multilateral institutions to actually say: ‘We need to see reforms.’”

After Davos, the two countries had a minor spat when two prominent Saudi commentators close to the monarchy criticised Egypt on social media, talking about its “failure” since its 1952 revolution and the dominant role of the military in the economy.
In an apparent response, Abdel Razek Tawfiq, editor-in-chief of Egyptian state-owned newspaper Al Gomhuria, wrote an editorial arguing that the “barefooted” and newly wealthy countries had no right to insult Egypt.

“The mean, the scoundrels and the nouveau-riche have no right to insult their masters,” he wrote, drawing on derogatory stereotypes and claims of historical superiority.

Saudi and Egyptian officials worked swiftly to smooth things over, with el-Sisi underlining that “we should not forget the support our brothers have given us”.

Later, unfriendly comments by Saudi commentators were quickly erased.

Egypt’s dependency on wealthier Persian Gulf countries further deepened after it secured a $3bn loan from the International Monetary Fund (IMF) in December last year. The loan entails structural economic reforms as well as an expectation of new financing and rollovers of debt from the Persian Gulf.

The meeting in Jeddah also comes amid a major diplomatic realignment in the region.

In March, Saudi Arabia signed a China-brokered landmark deal to restore ties with its once-archfoe Iran. Following the agreement, Saudi state television reported in March that Saudi Arabia was also in talks with Syria over the possible resumption of consular services in the two countries.

The re-establishment of ties between Riyadh and Damascus would mark the most significant development yet in moves by Arab states to normalise ties with Syrian President Bashar al-Assad.

Saudi Arabia is also working on re-engaging with Turkey after years of tension exacerbated by the brutal killing by Saudi agents in Istanbul of Jamal Khashoggi, a Saudi dissident and Washington Post columnist.

In March, Saudi Arabia signed a deal with Ankara to deposit $5bn in the Turkish central bank less than two months before national elections in Turkey.

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