[QODLink]
Middle East

Qatar offers Egypt $3bn in aid

Gulf state to buy bonds to help Cairo tide over economic crisis as it holds talks with IMF on a financing programme.

Last Modified: 10 Apr 2013 20:24
Email Article
Print Article
Share article
Send Feedback
Sheikh Hamad, at right, made the aid announcement jointly with Qandil, left, in Doha on Wednesday [Reuters]

Qatar has agreed to buy bonds from Egypt worth $3bn over and above a previously announced aid package.

The announcement by Hamad bin Jassim Al Thani, the Qatari prime minister, comes as Cairo holds difficult talks with the International Monetary Fund over a loan of $4.8bn as part of a financing programme to lift Egypt's economy out of crisis.

"We have agreed to add Egypt government bonds worth $3bn," Hamad said at a joint press conference in Doha with his Egyptian counterpart, Hisham Qandil, on Wednesday. 

Gas-rich Qatar has already announced an aid package of $5bn to Egypt, comprising an outright grant of $1bn and $4bn in bank deposits.

Hamad said Qatar, the biggest financial backer of Egypt's Islamist-led government, did not ask for anything in return for its aid.

Qandil lauded Qatari investments in Egypt, but insisted that those represent about 18 to 20 percent of foreign investments, and are "not as big as rumoured to be".

A delegation of the IMF is visiting Cairo for talks on the financing programme and is expected to examine Egypt's efforts at economic liberalisation.

The Egyptian government has been walking a tightrope as the measures required by the international lender are likely to generate social tensions.

The size of the loan may change, IMF officials have said, without elaborating.

Drop in revenue

Egypt's authorities believe the IMF loan will help restore investor confidence in the country, where unrest that accompanied the 2011 uprising that ended Hosni Mubarak's long-running presidency has caused a significant drop in revenue from the once-lucrative tourism industry.

Foreign reserves have plunged from $36bn to some $13bn in two years, and the budget deficit is increasing.

However, Egypt received another welcome boost on Wednesday night when Libya reportedly pledged to give Egypt a $2bn five-year, interest-free loan under.

The Egyptian state news agency MENA quoted a finance ministry official as saying that the loan would have a three-year grace period and was intended "to support the Egyptian economy and the state budget and foreign currency reserves". 

President Mohamed Morsi's administration has been plagued by unrest and deadly clashes between protesters and police, blocking efforts to build broad-based support for a needed programme of economic-policy changes.

Qatar has been accused of supporting Morsi's Muslim Brotherhood.

In his remarks on Wednesday, Hamad insisted that Qatar "will not be affected" by campaigns against it in Egyptian media. 

"Sadly, media are reporting positive things negatively," he said.

"But this will not affect Qatar's way of dealing with our brother's in Egypt."

403

Source:
Agencies
Email Article
Print Article
Share article
Send Feedback
Topics in this article
People
Country
City
Organisation
Featured on Al Jazeera
More than one-quarter of Gaza's population has been displaced, causing a humanitarian crisis.
Ministers and MPs caught on camera sleeping through important speeches have sparked criticism that they are not working.
Muslim charities claim discrimination after major UK banks began closing their accounts.
Italy struggles to deal with growing flood of migrants willing to risk their lives to reach the nearest European shores.
Featured
US drones in Pakistan have killed thousands since 2004. How have leaders defended or decried these deadly planes?
Residents count the cost of violence after black American teenager shot dead by white Missouri police officer.
EU's poorest member state is struggling to cope with an influx of mostly war-weary Syrian refugees.
Study says tipping point reached as poachers kill 7 percent of African elephants annually; birth rate is 5 percent.
Zimbabwe's leader given rotating chairmanship of 15-member nation bloc a year after he won disputed presidential polls.
join our mailing list