By Noah Chasek-Macfoy
President Morsy signed a $1 billion loan agreement with Turkey on Sunday while visiting the county to meet with Prime Minister Recep Tayyip Erdogan. The loan agreement is the first installment of a $2 billion financing plan between Turkey and Egypt, agreed earlier this month. A series of recent high-level meetings has signaled a strengthening relationship between the two countries.
According to the Wall Street Journal, Egypt is facing a budget deficit during the current fiscal year that may exceed $29 billion or 8 per cent of the country’s GDP.
The Minister of Planning and International Cooperation Ashraf Al-Arabi, is reported as saying Egypt needs to attract $28 billion in foreign funding to achieve a goal of 4.5 per cent growth this fiscal year.
Egypt is seeking foreign aid from several sources, but regional Arab and Muslim funders have been some of the quickest to offer aid. Egypt’s Central bank has already received $2 billion of the $18 billion pledged over the next 5 years. And an office dedicated to assisting Saudi private investors has been opened in the Ministry of Finance.
Metin Turan, secretary general for the Association of Turkish and Egyptian Businessmen, said Sunday’s loan agreement is a just one element of a strengthening Egyptian Turkish relations.
Erdogan will be returning Morsy’s visit on the first of next month. According to Turan, the Turkish prime minister will be accompanied by 13 ministers who will be coordinating with their Egyptian counterparts.
“[Erdogan’s] delegation will include Turkish businessmen who want to cooperate with Egyptians on a wide range of issues” Turan stated. “After the revolution the relationship between Turkey and Egypt has improved dramatically, both economically and strategically. Turks want a build a strategic relationship with Egypt like the one we have with the US.”
Turkey is a growing economic and political power in the region. The majority Muslim country leveraged its influence politically in Libya and Syria during the Arab Spring, and Turan confirmed that this loan is the first of its kind to Egypt from Turkey.
The political and economic success of the ruling Justice and Development Party (AKP) in Turkey is often considered a model for Morsy’s own Freedom and Justice party.
t the AKP rally Morsy attended before signing the deal Erdogan announced to the crowd “We have shown, both at home and abroad, that a country with a Muslim population can have a thriving and advanced democracy. This understating that we have put forth has gone beyond our borders and has practically become an example to all Muslim countries.”