GRM 2010 GRM 2011

Abstract Details

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Title of Paper:
The role of investment in GCC-Egypt relations
Paper Proposal Text :
Contemporary relations between the GCC and Egypt have been defined by transfers of aid, a distinct military balance of power and since the time of President Anwar Sadat a shared alliance with the US. One issue that is less explored is the role of cross border investment from the Gulf to Egypt in underpinning diplomatic relations and in determining the foreign policies of the Gulf to Egypt.

These investments play an important role in the Gulf-Egypt relationship. For example, since the Egyptian revolution of 2011, commercial interests were perceived to have played a role in determining Qatari support for the government of the Muslim Brotherhood, and there were various rumours regarding Doha’s plan to buy the Suez Canal and other national assets. Since the coup of 2013 investors from the UAE and Saudi Arabia have followed the huge aid transfers of their governments and made investments in strategic sectors such as real estate and infrastructure.

This paper intends to shed light on the nature of these investments and their use as a form of soft diplomacy. It will argue that for the Gulf states, Egypt has a special role in the region due to its population size and its ideological significance as a cultural and historical centre. As a result of this importance Gulf states have steered investment to Egypt through a variety of structures and private investors have followed. In turn, private Gulf investors are given a special status in Egypt as a result of the state level interaction and the importance with which the Gulf states are viewed in Egypt.

The paper will focus on the agriculture sector, an area where Gulf investors have made large investments in new land projects in the Egyptian desert. It will argue that these investments fulfill a commercial purpose but also reproduce the relationship between the elites of Egypt and the Gulf. Projects such as Toshka have fallen far short of their intended outcomes but they played a role creating legitimacy for the regime of former president Hosni Mubarak.

The paper will also examine the perception among Egyptian officials that such investment provides solutions to the developmental challenges of the country. Unemployment and a lack of infrastructure investment are serious problems in Egypt but foreign investment has often resulted in the sale of national resources and assets and the creation of low-paid jobs but with little long-term investment in the productive circuit.