Saudi Arabia, UAE pledge billions in aid to new Egypt regime

Saudi Arabia and the United Arab Emirates have together pledged $8 billion in grants and loans to Egypt's new government, signalling a backing away from the country's ousted Islamist president Mohammed Morsi, which some UAE states had earlier supported.

Oil-rich Saudi Arabia on Tuesday pledged $5 billion; this followed a $2 billion pledge by the UAE late last week.

Saudi Arabia and the UAE are leading critics of deposed President Mohammed Morsi's Muslim Brotherhood.

The aid is seen as a clear sign of shifting policies among the wealthy Gulf nations toward Egypt. Qatar had earlier backed Morsi's Muslim Brotherhood with several billion dollars during his year in office; while Saudi Arabia helped Egypt with almost $2 billion in aid after Morsi was elected last year.

Morsi was toppled among a growing economic crisis; and the latest Gulf assistance to the new regime might stave off a crisis over currency reserves.

Egypt's foreign reserves stood at just $14.9 billion at the end of June, less than half the amount in early 2011. The reserves, needed to pay for vital imports but also used to prop up the local currency, have taken a hit during continuous political turmoil and stand at what the central bank admits is a critical level.

Saudi finance minister Ibrahim al-Assaf said the package includes $2 billion to be deposited in Egypt's central bank, $2 billion worth of oil and gas, and $1 billion in cash.

The UAE, among the leading Arab critics of the Brotherhood, was involved in a diplomatic row with Morsi's government over the arrest of several Egyptians accused of forming a Brotherhood cell there.

The crackdown prompted some Islamists in Egypt to sharply criticize the Emirates, which had warm relations with ex-President Hosni Mubarak, who was deposed in 2011.