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Saudi Arabia signs deals for financial aid package to Egypt to shore up battered economy
CAIRO (AP) ' Saudi Arabia on Thursday signed a series of deals with Cairo aimed at helping stabilizing Egypt's struggling economy days after the worst diplomatic tiff between the two was healed.
A statement Thursday from the Saudi ambassador to Egypt said the kingdom has agreed to provide $500 million in aid to Egypt and will deposit an additional $1 billion at the country's central bank.
Egypt's Minister of International Cooperation, Fayza Aboul-Naga, said the deposit is for eight years and is part of Riyadh's previous commitment to Egypt.
Ambassador Ahmad Abdul-Aziz Kattan also said Saudi will meet Cairo's request to export $250 million worth of butane gas to Egypt, which has faced ongoing shortages of the cooking fuel.
Saudi Arabia and Egypt have just patched up one of the worst rifts in years of strategic relations. Riyadh decided late last month to shut down its diplomatic missions and recall its ambassador over rowdy protests by Egyptians who objected to the kingdom's treatment of an Egyptian human rights lawyer arrested in Saudi.
The break was brief, and a week later the ambassador returned and missions reopened after a parliamentary-led Egyptian delegation visited the kingdom to address Saudi's grievances.
The Egyptian lawyer, Ahmed el-Gezawi, remains in custody in Saudi Arabia and is under investigation for allegedly smuggling illegal drugs into the kingdom. Egyptian protesters claim el-Gezawi was actually detained for his criticism of the Saudi's treatment of millions of Egyptians working the oil-rich monarchy.
Cairo went to great length to ease the tensions, offering better security at Saudi diplomatic missions and sending the Egyptian delegation at the suggestion of the country's military rulers.
El-Gezawi reportedly sent a letter to the Saudi king, thanking him for restoring relations with Egypt, and apologizing for his case causing such tension. His purported handwritten note was published in the Saudi daily, Al-Riyadh.
The diplomatic tiff was a reflection of the kingdom's growing unease with Egypt's uprising and the country's trajectory since the last year's ouster of Hosni Mubarak, particularly the political gains of Islamists and concerns that it may encourage opposition in the Gulf.
Riyadh had pledged a $3.7 billion economic aid package to Egypt last year but it negotiations over its implementation dragged on, raising tension at times, and highlighting Saudi's concerns over the turbulent management of the transition.
Saudi Arabia is one of Cairo's biggest trading partners in the region, and has sizable investment in Egypt, which is now suffering from dwindling foreign funds.
Egypt's economy took a beating following Mubarak's toppling and the political chaos that followed. The government is also seeking a $3.2 billion loan from the International Monetary Fund to finance its budget .
Associated Press Writer Adam Schreck in Dubai, the United Arab Emirates contributed to this report.