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The economic relations between Egypt and the United Arab Emirates (UAE) are often viewed as stable and well established. Yet, in the past 45 years, these relations have experienced significant swings. Maintaining solid economic ties with the UAE is essential for Egypt. The benefits of these relations come in the form of economic and political agreements along with important investment projects that have created thousands of jobs for the Egyptian economy. The existing literature is primarily focused on the economic relations between Egypt and Gulf Cooperation Council (GCC) countries in general and it either relies on a particular aspect of this relationship or has analyzed a specific time period. This paper is a first in investigating the different aspects of the economic relations between Egypt and the UAE since the 1970s. We provide a comprehensive assessment of these relations under different political regimes and argue that politics has played an important role in shaping the economic relations between the two countries.
Keywords: political economy, politics, economic relations, development policy, Egypt, MENA, United Arab Emirates
Introduction
As one of the most aid-dependent economies in the Middle East, Egypt has sought to have strong economic ties with Arab countries. Of particular importance is its economic relations with the United Arab Emirates (UAE). Currently, the UAE is the world's largest investor in Egypt1. In addition, the UAE is the world's top foreign aid donor to the third world countries2, and Egypt is often ranked as the largest recipient of UAE's foreign aid3. In 2016, the foreign aid provided by the UAE to Egypt reached $4 billion4. How have the economic relations evolved between Egypt and the UAE? How important is political alignment in shaping of economic ties between the two countries?
Since the establishment of the UAE in 1971, the economic ties between the two countries have been relatively strong and stable. These stable relations have highly benefited the Egyptian economy in the form of agreements, investment projects, trade, job creation, and financial assistance. However, towards the end of the Sadat regime, specifically after the signing of the Camp David Accords in 1978 until 1988, and under President Morsi's rule in 2013, the economic relations between Egypt and the UAE floundered.
The recent political unrest in Egypt...