Egyptian Prime Minister Essam Sharaf has been looking to the Gulf for a solution to Egypt's budgetary problems, reports Doaa El-Bey This week witnessed a flurry of diplomacy in the Gulf as Egyptian Prime Minister Essam Sharaf concluded a tour to Bahrain and the United Arab Emirates (UAE) and Foreign Minister Mohamed El-Orabi ended a visit to Saudi Arabia. The visits aimed to foster bilateral relations and boost trade and investment cooperation, and they came at a time when Egypt was looking to raise money to finance the country's budget deficit for this fiscal year. At the end of Sharaf's visit to the UAE on Monday, the latter announced a $3 billion aid package for Egypt, with Saudi Arabia offering $500 million and Qatar considering a similar amount. During his tour, Sharaf met with UAE Emir Sheikh Khalifa bin Zayed and Bahrain's King Hamad bin Eissa Al-Khalifa to discuss developments in the region and mechanisms to encourage bilateral investment. Sharaf also delivered messages from the head of Egypt's ruling Higher Council of the Armed Forces, Field Marshal Hussein Tantawi, to Sheikh Khalifa and King Hamad concerning ways of promoting ties between Egypt and the two Gulf countries. He also met with the heads of major Emirati companies having investments in Egypt, Sharaf having made a priority of his visit the resolution of problems Emirati investors have faced in Egypt and the drumming up of further investments. For his part, El-Orabi met with his Saudi counterpart Saud Al-Faisal on Sunday to discuss difficulties faced by Saudi investors in Egypt, clearing the way for a return of Saudi investments to the country, as well as other issues of bilateral interest. The UAE aid package allocated to Egypt will reduce the deficit in the country's budget, Finance Minister Samir Radwan, who accompanied Sharaf, said. Radwan said on Monday that Egypt planned to fund its LE134 billion ($22.47 billion) budget deficit through a combination of local market debt issues and aid from other Arab states. The aid package would be divided into a $1.5 billion fund for small and medium-sized enterprises, he said, which would be named after the Emirati ruler. This would provide business and job opportunities for Egyptian young people. A further $750 million would take the form of a grant to develop housing and infrastructure projects, and $750 million would also be set aside as concessionary loans for different projects in Egypt. After securing a package of $3 billion in loans from the International Monetary Fund (IMF) last month, Radwan said Egypt did not need to borrow from the IMF or World Bank, which had also offered a large loan package, asserting that the budget shortfall could be covered locally and from foreign aid. The two Gulf states expressed their support for the Egyptian leadership and people, expressing their belief in Egypt's importance and strategic location, as well as in the important role the country played in ensuring balance in the region. Sharaf's visit to the two Gulf states had been scheduled for May, but was postponed because of sectarian strife in Egypt that required his presence in Cairo and the holding of an emergency cabinet meeting. Besides boosting economic and political relations with the Gulf countries, the visit also aimed at assuring the Gulf states that the normalisation of diplomatic relations between Egypt and Iran would not undermine the security of the Arab Gulf states. Sharaf said during his tour that Gulf security was an extension of Egyptian security, and that Egypt would not accept any encroachment on it. The same statement was made by El-Orabi on the margins of the African summit meeting held in Equatorial Guinea last week. El-Orabi said that the security of the Gulf was an inseparable part of Egypt's security, and that Egypt considered Gulf security as a "red line". Egyptian ambassador to Bahrain Mohamed Ashraf issued a similar statement during Sharaf's visit to the country. Relations have been strained between the predominantly Shia Iran and the Sunni-ruled Arab states of the Gulf following a crackdown on Shia protesters in Bahrain earlier this year. One diplomat, speaking on condition of anonymity, said that he could not understand why improvements in Egypt's relationship with Iran should be considered a cause for concern in the Gulf states. "All the Gulf states have diplomatic relations with Iran, including the UAE, which has had a border dispute with Tehran over three islands. In addition, all the Gulf states have strong trade and economic relations with Iran," he told Al-Ahram Weekly. Former Egyptian foreign minister Nabil El-Arabi declared earlier this year that Cairo was ready to turn a "new page" with Tehran, a move that caused concern in the Gulf states. The suppression of the uprising in Bahrain did not seem to have been mentioned during Sharaf's visit to the country, although he had earlier been given a letter from international and Egyptian human rights organisations expressing concern at the way the uprising had been handled. The letter had brought to Sharaf's attention concerns about the situation of human rights activists and members of the opposition in Bahrain in the aftermath of the suppression of the uprising that erupted in February. "When the main attention is on financial matters, human rights are secondary," the diplomat said.
