São Paulo – The Kuwaiti government announced on Thursday (11) that it will provide US$ 4 billion in aid to Egypt, according to government news agency Kuna. Saudi Arabia and the United Arab Emirates had already announced aid worth US$ 5 billion and $ 3 billion, respectively, according to Reuters.
This flow of financial support from the Gulf states occurs after deposition of Egyptian President Mohamed Morsi, by the army, last week. Morsi was the first democratically elected president of Egypt.
The Kuwaiti package should include a deposit of US$ 2 billion in the Central Bank of Egypt, a loan of US$ 1 billion and another US$ 1 billion in donations of oil products.
According to Emirates News Agency (WAM), the United Arab Emirates will provide US$ 1 billion in grants and US$ 2 billion in interest-free loans. The Saudis, in turn, announced an aid package of US$ 5 billion.
The funds will help the Egyptians fight a crisis in foreign accounts and a shortage of imported products, especially fuels. The country has drastically reduced its international reserves in recent months, limiting its ability to import, and the Egyptian pound is undergoing a constant process of devaluation.
According to Reuters, with these contributions, the interim government will feel less pressure to conclude negotiations with the International Monetary Fund (IMF) for a loan of US$ 4.8 billion, which have dragged on for months.
On Thursday in Washington, the director of the Communications Department at the IMF, Gerry Rice, said the institution has not made contact with the interim government, but is in "regular contact" with authorities in the country.
"The way to deal with the interim government will be guided, as is usual in such circumstances, by the point of view of the international community and, in particular, by the point of view of the members of the Fund," Rice said in a news conference broadcast on the internet .
According to him, the organisation is closely monitoring events in Egypt to evaluate the consequences for negotiations. "We must wait and see, it is premature to go into details," he said.
Regarding the release of funds announced by Gulf countries, Rice said that the IMF supports initiatives for financial assistance to countries facing economic difficulties, but he would not comment on the specific cases of Saudi Arabia, the Emirates and Kuwait, as he had no details about the operations.
Before the coup, during the one year period in which Morsi was in office, Qatar announced more than US$ 7 billion in loans to Egypt.
The interim government announced this week a transition schedule that allows for the writing of a new constitution, the promotion of a referendum to approve it and then parliamentary elections in six months.
*Translated by Mark Ament
