Qatar disappeared from the political scene in Egypt for a few hours only to reappear, this time with its best face on: the economic one.
Qatari Finance Minister Yousef Hussain Kamal was received as a guest in Cairo in a previously announced visit. He met with his Egyptian counterpart, Mursi Hijazi, who took office a few days ago. He also met with Prime Minister Hisham Kandil, and held a short press conference in which he announced Qatar’s intention to purchase Egyptian bonds and bills worth $2.5 billion.
Egypt has not yet officially offered these bonds, nor has it revealed their value.
The Qatari minister announced his country's intention to invest in the region east of Port Said that is adjacent to the Suez Canal, a very sensitive issue considering the port’s strategic location.
The Qatari finance minister revealed for the first time that the $2.5 billion with which Doha will buy the Egyptian bonds and bills will be deducted from the $4 billion handed over last year as a deposit by Qatar to the Central Bank of Egypt in two payments.
This astonished many banking experts because the Qatari deposit is long term and can only be returned in seven to ten years. So how could Qatar possibly recover part of it now?
This question was raised by banking expert Salwa al-Antari, former director of the research department at the central bank. She told As-Safir that “offering bonds and treasury assets was an approach adopted by Egypt under the Supreme Council of the Armed Forces in an attempt to obtain money to pump into the general budget. But the question is, how did Qatar know that Egypt would offer bonds worth up to $2.5 billion or more?”
Antari said that the deposits granted by Qatar to Egypt do not have any economic benefit other than the fact that they have solved some of the government’s temporary needs. She added that these deposits did not develop into real investment projects, which reflects the approach of the incumbent Kandil government based on borrowing and lacking a real economic strategy.
The press conference held by the Qatari finance minister did not last longer than ten minutes. He hastily answered a limited number of questions, not only about technical details related to potential Qatari investments, but about interests and returns Qatar will obtain by pumping these funds to Egypt, as the purchase of bills and bonds by states or entities are usually offset by “sovereign interests.”
According to Antari, these returns will be in the form of huge investments provided under special conditions. This perhaps explains Qatar’s intention to invest in the region east of Port Said, a project that is set to become the largest industrial free zone in the Middle East and the largest port for receiving containers. It is located east of Port Said on the northwestern side of the Sinai and extends over an area of 220 kilometers.
It would appear as if there were a prior agreement between the governments of Doha and Cairo, even before any investments were publically and globally offered in this area.
The Qatari finance minister did not go to Egypt alone. He was accompanied by Ahmed Sayed, CEO of Qatar Holding, the investment arm of the Qatari sovereign wealth fund, whose acquisitions in several European countries have been widely criticized, especially in the Western press. The latest was an attempt to buy a 20% share in British Airports Authority (BAA), in addition to a stake in French oil company Total.
The Financial Times estimated the amount of money allocated by Qatar Holding for investment in the world at about $100 billion. This raises many questions about the Qatari company's acquisition intentions and its apparent desire for even more billions.
Egyptian officials offered the wealthy Qatari delegation attractive special offers. After meeting with his Qatari counterpart, the Egyptian finance minister said that the government aims to attract Qatari investments worth $15 billion. He also hinted at granting Qatar exclusive privileges in the Port Said project. He said that Egypt aims to fully develop the Suez Canal hub, in response to a request for an increase in Qatari industrial investments in the project, through the construction of infrastructure facilities like electricity, energy, water and roads.
If these concessions persist, the region east of Port Said — and possibly others — may become semi-Qatari territory on Egyptian soil.