x Abu Dhabi, UAEFriday 19 January 2018

Regional aid to Egypt grows as US role declines

Growing regional involvement in Egypt is a positive sign. But the country needs to get past political crisis and begin attacking its economic problems.

The increasingly intense efforts to ease Egypt's political crisis reveal an important change in the dynamics of the region. International mediation efforts may or may not produce a functional and enduring political settlement. But the growing role of regional players is already apparent.

UAE Foreign Minister Sheikh Abdullah bin Zayed and his Qatari counterpart Khalid Al Attiyah have been in Cairo this week to broker a settlement. That pairing is significant because while the UAE welcomed and supported the new leadership after Mohammed Morsi was toppled, Qatar had been open-handed in backing Mr Morsi and the Brotherhood.

The visiting ministers both know that Egypt's 82.5 million people urgently need an end to the political standoff, and a change of focus: in all but the very short term it is economics, more than politics, that offers the key to stability. The UAE, Saudi Arabia and Kuwait have together already pledged some $12 billion (Dh44bn) in financial support to the new Egyptian government (including a $3bn deposit by the UAE last week). And Qatar, farsightedly, has put political considerations aside and delivered to Egypt the first of five promised tanker-loads of liquefied natural gas - a significant symbolic gesture, considering that the pledge had initially been made during Mr Morsi's reign but hadn't been delivered.

What is striking about this week's talks is that the US has had a reduced role. State Department official William Burns has been present in Cairo with the two foreign ministers, and two senior US senators were en route to Cairo yesterday. But Washington has a dwindling number of friends on either side of Egypt's political divide - except for the army, which still draws up to $1.5bn per year in aid from the US.

From the White House to Cairo's poorest areas, everyone needs a stable Egypt, freed from the distractions of a protracted power struggle and so able to concentrate on economic reforms.

Tourism must be revived, infrastructure improved, agriculture made more efficient and subsidies rationalised, investment stimulated and industrial development facilitated. That, not political bickering, is Egypt's real challenge.

Egypt's GDP in 2011 was $230bn; two years of crisis has doubtless trimmed that figure, and foreign aid cannot pay the bills indefinitely. Strong and well-intentioned regional involvement is a very good sign, but it is not a panacea. Egypt needs to get past this crisis and begin to address its underlying economic problems.