Qatar to buy Egypt bonds worth $3 billion: Qatari PM

Energy-rich Qatar has agreed to buy bonds from cash-strapped Egypt worth $3 billion over and above a previously announced aid package, Prime Minister Sheikh Hamad bin Jassem Al-Thani said today.

 

The announcement comes as Cairo holds difficult talks with the International Monetary Fund over a loan of $4.8 billion as part of a financing programme to lift Egypt's economy out of crisis.

 

"We have agreed to add Egypt government bonds worth $3 billion," Sheikh Hamad said at a press conference in Doha with visiting Egyptian counterpart Hisham Qandil.

 

The gas-rich state might also cover Egypt's deficit of gas, mainly during summer time, Sheikh Hamad said, adding that it could also "cover Egypt's exports of gas" as Egypt keeps its production for local consumption.

 

The most populous Arab nation is cutting its exports of natural gas as local demand for energy continues to grow, depriving the economy of badly needed foreign revenues.

 

Qatar has already announced an aid package of $5 billion to Egypt, comprising an outright grant of $1 billion and $4 billion in bank deposits.

 

An IMF delegation is visiting Cairo for talks on the financing programme and is expected to examine Egypt's efforts at economic reform.

 

The government has been walking a tightrope as the reforms required by the international lender are likely to spark social tensions.

 

The size of the loan may change, IMF officials have said, without elaborating.

 

Egypt's authorities believe the loan will help restore investor confidence in the country, where unrest that accompanied the 2011 uprising that toppled president Hosni Mubarak has caused a significant drop in revenue from the once-lucrative tourism industry.

 

Foreign reserves have plunged from $36 billion to some $13 billion in two years, and the budget deficit is increasing.

 

President Mohamed Morsi's administration has been plagued by unrest and deadly clashes between protesters and police, blocking efforts to build broad-based support for a needed programme of economic reform.

 

Qatar also wants to "participate in all projects tabled by the government of Egypt," said Sheikh Hamad, adding that he discussed several projects with Qandil.

 

Qandil hailed Qatari investments in Egypt, but insisted that those represent about 18 to 20% of foreign investments, and are "not as big as rumored to be."

 

Qandil appeared to be responding to opposition claims about a growing clout for the Gulf state that is accused of supporting Morsi's Muslim Brotherhood.

 

"We are not asking for a special status in Egypt... In return for support," said Sheikh Hamad, insisting that Doha "will not be affected" by campaigns against it in Egyptian media.

 

"Sadly, media are reporting positive things negatively. But this will not affect Qatar's way of dealing with our brothers in Egypt," he said.