Qatar Lends Troubled Egypt $2 Billion

Mohamed Morsi

VENTURES AFRICA – Qatar gave Egypt’s economy a shot in the arm late on Tuesday, lending the politically unstable North African country another $2 billion.

Qatar also gave Egypt an extra $500 million outright to help control a currency crisis in Egypt.

Political fighting in Egypt has set off a dash to convert Egyptian pounds to dollars over the past several weeks.

This has sent the country’s currency to a record low against the US dollar, draining foreign reserves to a critical level.

The government expects an International Monetary Fund (IMF) technical committee to visit Cairo in two to three weeks’ time to resume talks on a crucial $4.8 billion loan to cap balance of payments and budget deficits.

Analysts said Qatar’s handout appeared to be another example of the Gulf state seeking to deepen its influence in a Middle East being reshaped by revolts that have unseated long-serving autocrats.

Doha supported the uprising in Libya and remains a major backer of the revolt against Syrian President Bashar al-Assad.

“There was an initial package of $2.5 billion, of which $0.5 billion was a grant and $2 billion a deposit,” Qatari Prime Minister Sheikh Hamad bin Jassim al-Thani told reporters after meeting Egypt’s Islamist president, Mohamed M0rsi.

“We discussed transferring one of the deposits into an additional grant so that the grants became $1 billion and the deposits doubled to around $4 billion,” he said.

Hamad added that the new Qatari grants and deposits with Egypt’s central bank had all arrived.

“Some of the final details with the deposits are being worked on with the technical people, but the amount is there,” he said.

A political analyst in the UAE said Qatar viewed Egypt as a valuable strategic asset and had invested more in the most populous Arab nation than any other Gulf Arab state since a popular uprising overthrew former President Hosni Mubarak in February 2011.

“Qatar wants a solid regional ally in Egypt,” the analysts said. “Along with Turkey, this allegiance or axis is fundamental to the regional role Qatar is trying to carve for itself.”