Sisi visits Kuwait to beat investment drum amid economic uncertainty

President Abdel Fattah al-Sisi is scheduled to arrive in Kuwait on Monday for a visit aimed at boosting relations between the two countries. The duration of the visit has not yet been confirmed.

Coming at a critical time for the Egyptian economy, the goal of Sisi's visit is to reaffirm bilateral relations, especially regarding the commercial, economic and investment sectors. Kuwait granted Egypt US$4 billion last year, making it Egypt’s fifth biggest donor.

Sisi recently attended a meeting with Marzouq Ali Mohamed al-Ghanem, the speaker of the Kuwaiti National Assembly, on Saturday, December 27.

“The president expressed hope that the upcoming stage would witness an increase in Kuwaiti investments in Egypt,” the State Information Service reported following the meeting.

Egypt’s foreign reserves dropped from US$36 billion to less than half that amount following the 2011 uprising. A widening trade deficit, debt repayment and weak tourism and gas revenues have left Egypt at or below three months of import cover, a widely used benchmark for fiscal health. 

Grants from foreign allies, which have been critical for keeping the country afloat, also appear to be drying up. Between July and November 2014, Egypt received just LE666 million in grants, down 98 percent from almost LE37 billion in the same period last year. Meanwhile, from July to September 2014, foreign direct investment stood at just LE1.8 billion. 

Egypt-Kuwait relations have improved since former President Mohamed Morsi's ouster in July, 2013. Shortly thereafter, Kuwait, the United Arab Emirates and Saudi Arabia pledged US$20 million in aid to Egypt to help see the country through its transitional period. Both Sisi and his Kuwaiti counterpart have described the relationship between their respective governments as brotherly and strong.

"We will work together to support these investments and tackle any obstacles facing this approach for realizing Kuwaiti-Egyptian interests. Such support affirms the two sides' belief in their joint destiny,” Sisi said to the Kuwaiti news agency KUNA in November 2014.

Sisi’s visit to Kuwait comes at a dire moment. Since the Kuwaiti economy relies heavily on oil, the current drop in oil prices could translate into less aid for Egypt.

The price is currently at US$52.69 for a barrel of crude oil — the lowest since early 2009, shortly after the financial crisis hit. Since Kuwait relies on oil for 95 percent of their export income, according to US government figures, the country’s foreign aid budget might dry up if the price does not rise again.