In a 4 billion dollar deal an Israeli firm agreed to export natural gas to the Egyptian firm Dolphinus Holdings. 2.5 billion cubic meters gas will be exported from the Tamar offshore gas field in which US-based Noble Energy owns a 36% stake. The gas would be exported over the pipeline which Egypt had used to export gas to Israel before it was sabotaged 2 year ago. For more than a decade Israel had relied on Egypt for 40% of its gas under a 2005 export accord but Egypt annulled the treaty in April 2012 citing that Israel had not held up their financial obligation.
Egyptian based real estate developer SODIC will be investing between $2 and $2.5 billion dollars in Egypt in 2015. The investments will be used in the development of East town, West town, and a 301 feddan (~312 acres) plot of land located in New Cairo. Earlier this September during the Euromoney Conference, the Egyptian Minister of Foreign Trade and Industry Mounir Fakhry Abdel Nour said that Egypt requires an increase in investments to cover at least 25% of GDP which will help restore global market confidence in its economy. The Egyptian government announced in July that it is targeting a 90% reduction in foreign and domestic debt and increasing investment by 14% to reach a 3.2% increase in economic growth.
Unemployment and Egypt’s Economic Future
Malaise in the Egyptian economy was one of the driving forces of the revolution that overthrew Mubarak. General unemployment hovers around 13% and youth unemployment is at a staggering 35% as of 2012. The Egyptian government is attempting to remedy this through public works projects, encouraging investments, and buying up energy resources. What the government has to avoid as it does this is letting these projects unfairly benefit those in the regime or those who are already well connected. For a market to flourish the benefits of liberalization have to reach those in not just the top rungs of society. Cronyism was rampant under Mubarak and was prevalent in both Syria and Libya and was a factor in all three revolts. The deal with SODIC will bring new housing, many temporary construction jobs, and some permanent jobs. All these jobs however will be low wage and low skill and SODIC will in turn gain a large amount of money through rent and probable tax credits. Considering the amount of money invested these developments may be too pricey for the average Egyptian and benefit only those in the upper class. Of course this is all speculation but SODIC stands to gain a lot from this deal despite the hefty investment and the government would be wise to keep its distance in order to avoid accusations of cronyism.