On September 19th, Egypt's Prime Minister Mostafa Madbouly stated a deposit of $5 billion has been deposited into the Saudi Arabian central bank. Proceeding the deposit, bond prices increased. Egypts investment seeks to overcome long term economic turmoil in the state. Debt burden rises, the devaluation of currency, and a record high inflation leads Egypt to a deal: the Ras El Hekma deal. Granted with an economic boost, the United Arab Emirates signed a deal, permitting the development of prime mediterranean coast real estate situated in northern Egypt. Cairo has 5 additional investment deals underway, situated on the coast of the Red Sea.
Saudi Arabia rules the world of petroleum, so it is no surprise that they would swoop in to further their property. The Ras El Hekma is one of the few remaining preserved Mediterranean destinations, of which has luxurious turquoise, white sandy beachy, and other favorable aspects to vacationers. Thus, plans of a dubai-esq remodel are underway, creating a haven for tourists. Having a seemingly endless supply of money give Saudi Arabia the upper hand, and Egypt knows it. Egypt is so hurt for money that they handed the Ras El Hekma, full of cultural heritage, to developers. A weak government is the fire to the smoke of its struggling economy.
Egypt simply needs to get its act together, which is easier said than done. Selling land has historically been a post-imperialism way to make a quick buck. For example, many African countries took out loans from China that they were unable to repay. As collateral, China has situated themselves on the continent. Saudi Arabia is operating in their own self interest, which demonstrates a meticulous approach. However, one could argue that Saudi Arabia is unethical for taking advantage of Egypts economic state. Yet, both of these countries are very influential in the Arab world: a reason as to why Saudi Arabia seems unphased by what the deal entails for Egypt.
Saudi Arabia is in G20, which is an IGO that operates to address major global economics issues, financial stability, sustainability, and mitigation of climate change. Amongst the members include the African Union, the European Union, and UN 5. Egypt is in the African Union, upholding the primary goal of combating post colonialism. Thus, Egypts decision could have been avoided if the AU aided, since one of its functions as an IGO is a bank.
https://www.reuters.com/world/africa/egypt-pm-says-saudis-planned-5-bln-investment-independent-cenbank-deposit-2024-09-19/
