35 billion dollar contract between UAE and Egypt; A political or economic agreement?

According to the report of Tasnim International News Agency, on Friday 4 March (February 23), Egyptian Prime Minister Mustafa Madbouli announced a large contract with the UAE worth 35 billion dollars. According to this agreement, the “Ras al-Hikmah” region in the “Matrouh” province located in the north of Egypt will be handed over to the UAE to build a tourist city there. This will be the largest government contract in Egypt since 2019.

In the official ceremony, this contract was signed by Asim Al-Jazar, Minister of Housing of Egypt, and Mohamed Hassan Al-Suwaidi, Minister of Investment of the UAE, on behalf of the parties. In this ceremony, some high-ranking Egyptian officials such as Central Bank Governor Hassan Abdullah and Tourism Minister Ahmed Issa were also present. It is expected that nearly 150 billion dollars will be invested in this project!

This project came with the help of the Egyptian government's empty treasury, while the maturity of Cairo's foreign debts has reached about 165 billion dollars and the economic crisis has spread to different levels of this country. For this reason, the question arises whether this project should really be analyzed with economic logic or with political logic?

Details of Ras Al Hikmah contract

The Egyptian Prime Minister divides the 35 billion dollar contract of Ras al-Hikmah into two parts:

1. Executive part (construction): This project is supposed to cover an area of ​​170.8 million cubic meters. Construction towns, luxurious hotels, attractive tourist centers, cultural recreation centers, schools, universities, hospitals and service centers are going to be built in this area. In addition, a part of the region is allocated to financial and industrial organizations. To these should be added a marina and a collection of tourist ships. In addition, an airport will be built in the south of Ras al-Hikmah city. The designers hope that with the implementation of this project, 8 million people will be added to the tourists of this region every year.
2. Financial sector: In this project, the Egyptian government will receive 35 billion dollars from the UAE, 15 billion of which will be delivered this week. The State Investment Fund of Abu Dhabi transferred 10 billion dollars and 5 billion from the deposits of Abu Dhabi in the Central Bank of Egypt are available to the government of Cairo. The remaining 20 billion will be paid in the next two months, of which 14 billion will be in cash and the remaining 6 billion will be the deposit that Abu Dhabi had placed in the Central Bank of Egypt as collateral. In addition, the profit of this project is that Abu Dhabi's share will be 65% and Cairo's share will be 35%.

However, the state news agency of the Emirates (WAM) in its report quoted the investment fund “Al Qabda” (the main investor of this project) and wrote that they invested 24 billion for the development of this area and provided 11 billion to the Central Bank of Egypt for large projects. the other to be invested throughout Egypt.

Ambiguous clauses

However, the details of this contract remain confidential and this has caused various speculations. For example, it is not clear whether the UAE will become the owner of this area or will benefit from its investment as an investor for a certain period of time? Or it is said that 150 billion dollars are going to be invested, in what time frame will this investment take place? Or in what time frame will the construction projects be completed? In these cases, the least amount of information has not been published in the official space and even in prominent Egyptian or Emirati media!

The second and more important point is that it is not clear whether foreign partners will participate in this project or not? The importance of this issue is that it should be seen whether the UAE will be a gateway for the Zionist regime to enter or a platform for competition between China and America will create or not? In these cases, the least information has not been published!

The root of the story; Political or economic?

But the most important part of the story is that the UAE made this huge investment with economic logic, or did political motives cause the transfer of this huge amount to Cairo? In this context, the type of narration of the Emirati first-class elites about this contract is worthy of consideration.

“Anwar Gargash”, who was formerly the Minister of Foreign Affairs and after leaving it, received the title of “Political Advisor to the Prime Minister”, called this agreement an important step in the direction of deepening and strengthening the relations between Cairo and Abu Dhabi “through economy”. ! In this regard, he wrote: “Ras al-Hikmah project is a new initiative to strengthen relations between the UAE and Egypt – through the lens of economy and investment. “The two countries will be important partners for each other in the past, present and future.”

Khalaf al-Habtoor, a famous Emirati strategist and investor, wrote about this: “The UAE government never leaves its brothers and friends alone. This point is the main principle in our morals and character and we learned it from the founders of our nation and state.”

He continued: “Egypt is one of the main pillars of the Arab world and we consider ourselves bound to be by their side in difficult times. In the UAE, we listen to the call of brotherhood.”

“Hani Meshoor”, one of the prominent Emirati experts, also writes in this regard: “The UAE has gained its influence and power through the clear attitudes of its leader, Sheikh Mohammed bin Zayed.” He considers Egypt to be one of the security focal points of the Arab world… Security is a category that should not be neglected or tolerated.”

Not only Emirati officials and experts, but even an important part of the Egyptian oligarchy analyze this contract from a political perspective! “Najib Sawiros”, the great Coptic Egyptian capitalist and one of the very important people of the financial networks supporting the politics in Egypt, wrote on his personal page on Twitter: “I thank the UAE government and the children of the late Sheikh Zayed, who really love Egypt. Their support is unnatural and their kindness is unprecedented.”

Some famous Egyptian journalists such as “Jamal Sultan” also clearly stated that this contract cannot be justified from an economic point of view and its nature is purely political!

Conclusion

The signing of this agreement is very important in the situation that the war in Gaza has reached Rafah. Should it really be analyzed independently of the equations of Gaza and the role of Egypt? It is enough to consider that according to the official statistics of Cairo, the total investment of the UAE in Egypt was 15 billion dollars; But this time, and only in one paragraph, 35 billion dollars will be handed over to Cairo!

In this situation, it is enough to consider the two issues of “Egypt's economic crisis during the Gaza war” and “Egypt's role in the current and future equations of Gaza”.

Author: Alireza Majidi, an expert on West Asian issues

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