Egypt looks to Saudi Arabia as an ally in overcoming the economic crisis
Egypt's President Abdel Fattah Al Sisi has made a surprise visit to Saudi Arabia in order to strengthen bilateral relations with one of its main regional partners. As part of these ties, the Egyptian leader's trip to the port city of Jeddah focused on the economic front, as Cairo seeks financial support to tackle the economic crisis it has been suffering for years and which has worsened following Russia's invasion of Ukraine and the ensuing global inflation.
In March, inflation in Egypt reached a new record high of 40.26 per cent, surpassing February's rate of 31.9 per cent. Moreover, the national currency, the Egyptian pound, has lost almost half its value against the dollar since March 2022.
الرئيس المصري يغادر جدة و #ولي_العهد في مقدمة مودعيه#الإخبارية_عاجل pic.twitter.com/OjHWXIOWdg
— الإخبارية عاجل (@EKH_brk) April 3, 2023
In the midst of this dire situation, Egypt has turned to its Gulf partners, such as Saudi Arabia, the United Arab Emirates and also Qatar after years of tensions and blockade. These countries have made significant inflows into Egypt's central bank and pledged new investments that could be a shot in the arm for the North African nation's economy.
Saudi Arabia, in particular, has injected Egypt with millions of dollars in recent years through grants, funds to the central bank and investments. However, at the World Economic Forum in Davos in January, Saudi Arabia's finance minister, Mohammed Al Jadaan, stressed that aid packages must be accompanied by reforms.
In Jeddah, Al Sisi met with Saudi Crown Prince Mohammed bin Salman, with whom he discussed "the close and historic bilateral relations between the two brotherly countries", as well as "prospects for joint cooperation and ways to enhance and develop it in various areas", according to the Saudi news agency SPA. In addition to the ties between the two nations, Al Sisi and Bin Salman discussed "developments on the international stage and in the region, as well as issues of common interest".
The Egyptian president and the Saudi crown prince were accompanied by a number of senior officials from both countries, including Saudi national security adviser Musaad bin Mohammed al-Aiban and Egypt's intelligence chief Abbas Kamel. Also present at the meeting was Saudi Minister of State Essam bin Saeed.
Riyadh has also been an important political ally of Cairo. The Saudi Kingdom, as well as other Gulf countries, have strongly backed Al Sisi's government since the overthrow of Mohamed Morsi, a member of the Muslim Brotherhood, an Islamist organisation also considered terrorist in certain countries with links to Qatar.
Al Sisi's recent visit to Saudi Arabia comes amid significant Egyptian and Saudi diplomatic advances with countries such as Syria, Iran and Turkey.
Egypt's acute economic crisis has forced the Al Sisi government to sign a $3 billion bailout plan with the International Monetary Fund. Some economists and analysts, as well as the IMF, have expressed "cautious optimism" about the current Egyptian crisis, although they stress that "risks remain".
"The government expects that investments from oil-rich Gulf partner states, particularly the United Arab Emirates, Saudi Arabia and Qatar, combined with increased revenues from tourism, Suez Canal revenues, oil and natural gas, sales and remittances from Egyptians abroad would meet its more immediate needs over the next year," says the Middle East Institute.
