Gulf states provide US$1 billion to post-Mubarak Egypt
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Gulf countries provided one billion dollars to Egypt after the revolution that toppled Hosni Mubarak for infrastructure and economic losses. This showcases the Gulf’s vested interest in ensuring Egypt surmounts its crisis.
Egypt will receive $200 million to support its budget from the Abu Dhabi-based Arab Monetary Fund (AMF) this month and a second tranche of financing worth $270 million in December, a minister said on Wednesday. Egypt has so far received $1 billion in budgetary support from Gulf states to help cover its deficit, which expanded after the uprising in February that unseated president Hosni Mubarak.
Chairman of the AMF, Jassim Al Manna, expressed his gratitude for the Egyptian government’s appreciation of the fund’s role in supporting the country’s economy, according to a statement from the Cabinet. He added that Egypt’s economy boasts skilled labor and positive growth rates, which will help it overcome the challenges of the transitional period. “Egypt’s success is the success of all Arab nations,” he said.
The government forecasts a deficit of 8.6 percent of gross domestic product in the financial year to the end of June 2012, although economists say this estimate may prove optimistic. The 2010-11 deficit has been officially estimated to come in at around 9.5 percent.
Planning and International Cooperation Minister Fayza Aboul Naga told reporters the AMF funds were to support the budget.
Cabinet spokesman Mohamed Hegazy said the facility had a three-year term at an interest rate of 1.4 percent, with an 18-month grace period. The AMF through its Economic Policy Institute, will also offer training opportunities for Egyptians working in the national financial, monetary and statistics agencies, said a statement by Egypt’s Cabinet of Ministers.
Egypt turned down a $3.2 billion financing package offered by the International Monetary Fund in the summer, arguing at the time that it would meet its financing needs locally and that the ruling military did not want to build up debts. The government has since said it is open to fresh proposals from the IMF. (Source: www.yallafinance.com)
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