Arab states pledge billions at Egypt investment meet

SHARM EL SHEIKH, Egypt (AFP) - Arab states pledged US$12 billion (S$16 billion) in investment aid to Egypt on Friday as President Abdel Fattah al-Sisi hosted a conference aimed at jump-starting the economy and positioning himself as a key force against Islamic militants.

The United States, however, came empty-handed to the conference at the Red Sea resort town of Sharm el-Sheikh, with US Secretary of State John Kerry only affirming that Washington stood beside Egypt as it seeks to recover from years of turmoil.

In a rather short speech, a visibly irritated Kerry for being slotted as the 15th speaker at the opening session of the three-day conference, promised Washington's "full committment" for the security and prosperity of Egyptians which he said they "desire and deserve".

Kuwait, the United Arab Emirates and Saudi Arabia pledged US$4 billion each at the start of the conference.

Most of the funds will be invested in projects, while US$3 billion will be deposited in Egypt's Central Bank.

Kerry, who earlier met Sisi and the leaders of Jordan and the Palestinian Authority, told businessmen that Washington was "eager and ready and willing" to help Egypt's economic development.

But a US diplomat travelling with him said there had been "no decision" on freeing up US$650 million in military aid frozen during the height of a crackdown on Sisi's Islamist opponents that left hundreds dead.

Washington had released some of the aid, including the delivery of Apache helicopters Egypt says are important for its fight against Islamist insurgents in the Sinai Peninsula.


Opening the conference, Sisi said that investing in Egypt - the Arab world's most populous country - would help stabilise the entire region.

Egypt's stability "is a cornerstone in regional stability," he said.

The former army chief, who won elections after toppling Islamist president Mohamed Morsi in 2013, has been criticised for unleashing a crackdown on Morsi's supporters.

He has portrayed his Islamist opposition as no different from radical militants such as the Islamic State in Iraq and Syria group, which has affiliates in Sinai and Egypt's neighbour Libya.

"Egypt presents a model for Arab civilisation," Sisi said on Friday.

"A country that rejects violence and terrorism and extremism, a country that strengthens regional stability and peace."

Restoring the economy and attracting foreign investments have been key tenets of Sisi's presidency, with this week's conference already marked down as a milestone by his government.

In one of the biggest deals expected at the conference, British Petroleum is to sign a US$12 billion agreement - shared with its Russian partner DEA - to develop Egyptian gas fields.

Conference consultant Richard Attias told AFP that "more than 30 projects will be unveiled, which can attract billions of dollars of investment."

General Electric, Unilever, ENI and HSBC are among companies and banks attending.

GE unveiled plans to set up a US$200 million training and manufacturing facility in the canal city of Suez.

Presidential guards and hundreds of policemen have been deployed across Sharm El-Sheikh, located in the generally secure south of the Sinai.

Following his ousting of Morsi - the country's first democratically elected leader - Sisi faced criticism abroad for a crackdown on dissent.

"For Egypt this is not an economic event, but rather a political one," a Western diplomat told AFP.


Representatives from about 100 countries and international organisations are attending the event, giving the conference a firm diplomatic push in a bid to strengthen Sisi's international status.

"The aim is to put Egypt back on the map of international investment, and send a message to the world that the country is safe and attractive," International Cooperation Minister Naglaa al-Ahwani said.

"They particularly want to return Egypt to the headlines in a positive way," said Aaron Reese, a researcher at the Washington-based Institute For The Study of War.

Projects in energy, transport, industry, telecommunications and housing will be offered for investment.

Sisi amended the law Thursday to make it more attractive for foreign investment, which has plummeted since the 2011 uprising that ousted longtime president Hosni Mubarak.

Among other things, the change lays down guarantees for deals signed with the government and offers incentives to finance labour-intensive projects.

Egypt aims for economic growth of 4.3 percent in 2015-2016, compared with two percent annually since the anti-Mubarak uprising, while also reducing the budget deficit and easing unemployment.

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