Visit by King Salman, foreign aid, corrupt wheat market.

[Hafiz]

The aging and less than fully mobile King Salman visits Egypt on Thursday to chide and to distribute more largess. This visit has produced a few news reports on the state of the Saudi Egyptian relationship.

Egypt under Sisi has received grants and deposits of US$35 billion from the gulf states with results that have apparently disappointed the donors. Maybe they, unlike the Egyptian government, don’t see the proposed new administrative capital as a high priority, Grants are one thing but prospective Saudi investors don’t like corruption in Egypt and this must come as a surprise to those who have done business in the far from uncorrupt gulf.

See below for a Reuter’s report, which discusses this together with the foreign relations differences between Saudi and Egypt and increasing frustration with Sisi.

http://www.reuters.com/article/us-saudi ... SKCN0X212M

The visit will also involve agreement on further oil aid and Sinai investment of US$21.5 billion over up to five years.

http://www.reuters.com/article/us-saudi ... SKCN0X20Q0

Egypt will need a bit more in the begging bowl to fund the US$40 to 45 billion new administrative capital. Maybe the Chinese are poised.

The first article also refers to the antipathy between Saudi and the Brotherhood and the threat of the latter to the kingdom.

Talking of corruption, the wheat and bread markets are drenched with it and the crooks have even found ways around the new smart bread card. With wheat he government is now doing something (not very much) to clean up the corrupt sale to the government of cheap imported wheat at the inflated price paid by the government to domestic producers. By something I mean a new offense with trivial penalties (E1,000 and 12 months jail – maybe a private clinic) which would do little to deter those grain trading corporations that last year stole over US$200 million of government funds.

The government must have known at the time it was being rorted because last year it ended up purchasing 40% more ‘domestic’ wheat ever before (in average climatic conditions and with no increase in phosphate inputs) and vastly more than any of the independent estimates of the size of the total domestic crop. The government can’t plead lack of knowledge because newspaper reports at the time raised the red flag that the system was being rorted and that they were really buying international wheat at well over the international price (ie the domestic price).

http://www.reuters.com/article/egypt-wh ... SL5N1791L9

[LovelyLadyLux]

Interesting articles