Tensions rise between Egypt and Saudi Arabia over Syria
An Egyptian investment bank, said Egypt is on the verge of devaluing its currency, the Egyptian pound.
By LINDA GRADSTEIN/THE MEDIA LINEUpdated: OCTOBER 15, 2016 04:29Egyptian President Abdel Fattah al-Sisi (L) and Saudi King Salman(photo credit: AFP PHOTO)
Egypt says it has found an alternative for fuel imports after Saudi Arabia abruptly decided to halt shipments of fuel as an expression of its displeasure over an Egyptian vote in the UN this week. In that vote, Egypt voted in favor of separate Russian and French draft resolutions on Syria in the UN Security Council.That resolution has led to a public spat between the two Sunni allies that could have implications for US policy in the region. Saudi Arabia vehemently opposes Russia’s military intervention in Syria on behalf of Syrian President Bashar Assad. It was the first public dispute between Egypt and Saudi Arabia since current Egyptian President Abdel Fattah al-Sisi ousted Islamist leader Mohamed Morsi in 2013. Since then, Saudi Arabia has sent billions of dollars to Egypt which have helped keep the Egyptian economy afloat.But in the last few months, Saudi Arabia’s King Salman has sought closer ties with Turkey and Qatar, both of which have tense relations with Egypt. In addition, Saudi Arabia had expected Egypt to send ground troops to Yemen as part of the Saudi-led coalition.“The tensions between Egypt and Saudi Arabia is an accumulation of a lot of things,” Omar Ashour, an Associate Fellow in the Middle East and North Africa program at Chatham House, a British think tank, told The Media Line. “Egypt seems to see the survival of Bashar Assad as a crucial part of maintaining the status quo, while Saudi Arabia sees that if the regime wins, Iran and Hezbollah win.”But the dispute goes deeper, he said. More than 20 billion dollars of Saudi aid to Egypt has “disappeared,” he said. The media in Egypt, which is controlled by the Egyptian government, has also been attacking the Saudi royal family.Tensions increased further when the Saudi company Aramco said it has suspended its oil shipments to Egypt. That same after the two countries signed a $23 billion deal in April under which Aramco promised to deliver 700,000 tons of petroleum products to Egypt every month for the next five years.There was some confusion as to whether Saudi Arabia had suspended its shipments. In a written statement, Hamzi Abdulaziz, a spokesman for the Egyptian General Petroleum Corporation (EGPC) said that shipments had resumed.The spat comes as Egypt is trying to secure a $12 billion loan from the International Monetary Fund (IMF) to restructure the economy. Beltone Financial, an Egyptian investment bank, said Egypt is on the verge of devaluing its currency, the Egyptian pound. Sisi met with the governor of the country’s central bank last week to discuss the move.Analysts in Egypt say the move would help the country secure the IMF load. But it would also mean that the middle class would see its savings devalued by up to one-third, and could spark anger against the government.That is already happening. A video of an angry tuk-tuk (a motorized three-wheel taxi) has gone viral. It was filmed in a densely populated working class Cairo neighborhood, and shows the driver attacking the Egyptian government for spending money while the poor suffer.
"You watch Egypt on television and it's like Vienna, you go out on the street and it's like Somalia's cousin," he says in the clip, originally aired on Wednesday night on the pro-government Al Hayat television channel.The network pulled the video, but not before it had 1.6 million views.