News Analysis: Egypt, Saudi beef up economic ties targeting mega projects

Source: Xinhua| 2018-03-07 04:42:21|Editor: Mu Xuequan
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CAIRO, March 6 (Xinhua) -- The recent visit of Saudi Crown Prince Mohammed Bin Salman to Egypt will further strengthen the strong bilateral political and economic relations, in light of the agreement to pump huge Saudi investments in the north African Arab country.

Bin Salman wrapped on Tuesday a three-day official visit to Egypt as the first stop of his first foreign tour since he became crown prince last year.

His next stop is Britain and he we will later visit the United States, the kingdom's closest and strongest Western ally.

During his visit, a number of agreements and memorandums of understanding (MoUs) between the two countries were signed in the fields of investment and environment protection.

The most important was the agreement to establish a Saudi-Egyptian investment fund worth 16 billion U.S. dollars that is meant to boost new projects in Egypt.

On Monday, the Crown Prince told reporters that his country is working on establishing "the NEOM project", which involves the creation of a huge transnational city and economic zone, covers 26,500 square kilometres in Saudi Arabia, Jordan and Egypt.

He said that Egypt and Saudi Arabia have signed an agreement allotting 1,000 square kilometres of land in Egypt's South Sinai for the mega project.

The project, which is worth 500 billion U.S. dollars, is adjacent to the Red Sea and the Gulf of Aqaba and near maritime trade routes that use the Suez Canal.

It will utilize the anticipated King Salman Bridge, which will link Egypt and Saudi Arabia.

In this regard, Tarek Fahmi, a professor of political science at Cairo University, said that the visit of the Saudi Crown Prince was strategic that will pave the way for new policies between the two countries.

"The visit aims at establishing a common vision before the next Arab summit scheduled to be held in Riyadh later this month," Fahmy told Xinhua.

The professor said that the visit was a good chance for Bin Salman and Egyptian President Abdel-Fattah al-Sisi to discuss the Arab issues such as the Syrian issue and developments in the situation in Yemen, as well as the Palestinian cause, especially after the U.S. December decision to transfer its embassy in Israel to Jerusalem next May.

"The visit also provided a platform to tackle other regional issues facing the two countries such as terrorism," he added.

Speaking about choosing Egypt to be Bin Salman's first stop in his first foreign tour, Fahmy said that Egypt is a country with weight, pointing out "it is normal for Cairo to be the first foreign stop for Prince Mohammed Bin Salman."

Speaking about the impact of this visit on investments in Egypt, Fahmy said it would encourage Saudi and Gulf businessmen to increase their investments in the Middle East country, which offers promising investment opportunities.

Egypt has been working hard to attract foreign investments to overcome an economic slowdown that has hit the country over the past years due to political turmoil and relevant security challenges that led the country's foreign debts to increase by over 42 percent to hit 80.8 billion dollars by the end of September 2017.

In November 2016, Egypt fully floated the exchange rate of its local currency Egyptian pound to deal with the shortage of dollar reserves and embark on a strict three-year economic reform program that includes fuel and energy subsidy cuts and tax hikes.

The reform program is encouraged by the International Monetary Fund provided Egypt with a 12-billion-dollar loan, half of which has already been delivered to the most populous Arab country.

Egypt has also issued a new law aiming at facilitating measures to issue permits for establishing industrial facilities to attract more industrial investments.

The regulations of the law aim at avoiding bureaucracy and shortening the time required to issue permits.

"Saudi Arabia comes on top of countries investing in Egypt, which is eligible to receive more investments," former Egyptian foreign minister Mohammed al-Oraby told Xinhua. "I think this visit will contribute to increasing Saudi investments in Egypt."

He said that launching the joint fund will definitely improve the Egyptian economic conditions and boost the government's investment map, which includes 4,136 investment opportunities in eight industrial sectors.

"The new Saudi-Egyptian agreement will certainly make an obvious economic leap in Egypt," he pointed out.