CAIRO: The United Arab Emirates has offered a $3 billion aid package to Egypt, the news agency WAM reported. The announcement was made after Egyptian Prime Minister Essam Sharaf visited the oil-rich Gulf Arab state for the first time since the ousting of Hosni Mubarak. After holding a meeting this Monday with UAE President Sheikh Mansour bin Zayed al-Nahayan at his palace in al-Ain, the decision was announced and the UAE ensured that it will always support Egypt and its people. The UAE President explained: “It was decided to set up the Khalifa bin Zayed Fund to support medium and small projects in the Arab Republic of Egypt to the value of $1.5 billion, with the aim of creating job opportunities for Egyptian youth.” In addition to this, the news agency said Sheikh Khalifa ordered $750 million to be allocated for infrastructure and housing projects for youth and another $750 million in soft loans for other projects. Egypt's economy has been greatly affected by the political turmoil that has swept the country since the rise of popular uprisings in early January. The country's instability has led to a sharp decrease in tourism and investment, two of the main sources of foreign exchange. Fearful of the future of their contracted economy, Egypt approached the IMF and international donors in early May so as to better the country's estimated $11 billion balance of payments gap in 2011-2012. In early June, Egypt secured a $3 billion financial package from the International Monetary Fund (IMF). After securing the package, Finance Minister Samir Radwan, announced on Monday that it will not have to borrow money from the IMF or the World Bank. Deciding to stick to regional sources, Egypt plans to fund its $22.47 billion budget deficit through both local market issuance and aid from Arab states. BM
