According to Egypt’s current president, the country has received more than $20 billion in “aid” from Gulf countries, namely, Saudi Arabia (a trailblazer in promoting democracy and freedoms in the region), the United Arab Emirates, and Kuwait. $20 billion is a lot of money but where did it go? Furthermore, what qualifies that sum of money as “aid?” To put the number into perspective, this Gulf “aid” is about four times the annual revenue of the Suez Canal. That sum of money could have paid for completing the third metro line and building the entire fourth metro line in Cairo with some spare change to do a tram line somewhere. That sum of money is also about 12 times the annual US aid to Egypt. However, just like the US aid is not as philanthropic as it sounds (most of the money is actually military contracts and Egypt ends up spending more than the “aid” money annually for US military equipment and maintenance), Gulf “aid” isn’t the gift to the Egyptian people that it purports to be. Where has this money actually gone and what impact on the lives of Egyptians, particularly those living in cities, has this money made? This is not a Marshall Plan type of aid, resulting in specific development projects that actually impact the economy, provide sustained jobs and services. To put it bluntly, what are Gulf backers of the regime getting for their money? (besides the political clout they buy in Egypt, for example see the size of the new Saudi embassy in Cairo)
One possible answer is land. Lots of land. Millions of square meters of Egyptian land.
We’ve heard before about Walid bin Talal’s land in Toshka, south Egypt. The Saudi business tycoon acquired 100,000 faddan from the Egyptian government for 50 EGP/faddan (a faddan is roughly 4200 sqm), that’s $7 per 4200 square meters! This state-sanctioned land grab was brought to public attention after the 2011 protests started, a time when people thought corruption can be brought to justice. This led to a friendly resolution and bin Talal generously gave back some of the land at its original cost and kept the majority.
More recently, another massive land sale was in court. This time it was land in Giza with one side of the “property” overlooking the great pyramids. The land was sold to a Kuwaiti company during Mubarak’s years and was also brought to court after the revolt started. The exact area of the disputed land is unclear, one report suggests that the total land was 110 million square meters (one and half the total size of the city of Beirut) sold at 200 pounds per faddan or 4.5 piasters per square meter! Other reports, including al-Ahram, confirm the size of the disputed land but they use the less foreboding number of 26,000 faddans (which roughly equals 110 million square meters). That land was designated by the government as desert land for agricultural reclamation. However, not only did the Kuwaiti company not invest in its reclamation for food production, it carried out illegal digs in search of antiquities and carried out extensive quarrying to sell millions of dollars worth of Egyptian stone. The court case, which just ended earlier this month, not only allowed the company to retain the land but also gave it permission to urbanize it rather than its original purpose of transforming it into agriculture. All this for a sum of cash totaling nearly 45 billion Egyptian pounds to be paid by the company to compensate the Egyptian state. But don’t hold your breath, most probably after the first installment nothing will be paid and everything will be forgotten.
Another case is Port Ghalib in Marsa Alam on the Red Sea. There, a Kuwaiti businessman bought an estimated one million square meters of land on a virgin beach in one of Egypt’s still unexploited coasts. In addition, the same buyer, Al-Kharafi, also bought the airport across the road from his private resort city of five and four star hotels and built a power station. This is Egypt’s only privately owned/managed airport. Egypt Air passengers aren’t exempted from the additional fees added to tickets for flying to this airport: a flight from Cairo costs around LE1500. It is not clear if the government built Marsa Alam International Airport then sold it to Al-Kharafi or if he built the airport. Reporting on the land and airport sale is slim, but according to al-Sharq al-Awsat the Kuwaiti investor plans to spend a total of $1.2 billion in total in this project (including everything: airport, power station, land, construction and management of a collection of high-end hotels and resorts, a marina, etc.). That is a bargain. What we have here is a situation in which one person owns the airport and the collection of resorts and hotels across the road only a ten minute ride away and possibly even the transport options between the two so that mostly European tourists arrive at his airport, take his bus or limousine to his hotel then leave the country with minimal contribution to the national GDP. Great investment for Egypt!
These deals are only the tip of the iceberg. Other deals are much more vast and involve the Egyptian government in more direct ways such as the privileges accessed by Emaar and the recent deal with the UAE company Arabtec. The Suez Canal project also involves the Saudi Dar al-Handasah, and the UAE’s Dubai Ports. There are certainly more opaque deals with great financial losses for Egypt where Gulf investors have their way with the country’s resources with little return to Egypt’s economy. These gulf regimes are not only backing the Egyptian regime financially, they and their businessmen have access to concessions that depend on approval of the highest echelons in the Egyptian regime and the military, which acts as the gatekeeper to Egypt’s resources and lands. In the absence of transparency, civilian oversight, and democratic governance, Egyptians will never fully know the extent of missed opportunities to the Egyptian economy brought onto the country with these “investments.”