CAIRO -- Saudi Arabia and the United Arab Emirates on Tuesday announced a total of $8 billion in economic aid to help shore up Egypt’s military-backed interim leaders after Islamist President
The Persian Gulf economic giants had eyed the Morsi government warily, worried that the rise of his
Saudi Arabia’s $5-billion pledge and the Emirates' $3 billion will provide Egypt a much-needed economic lifeline, but analysts said they also would diminish the United States’ already shrinking influence with the new government in Cairo.
“It definitely diminishes our leverage,” said Jeffrey Martini, a Middle East analyst at the Rand Corp. in Washington.
The Obama administration has been in a quiet financial bidding contest with Qatar for influence over Egypt’s leaders since longtime strongman
The United States and its European allies were trying to persuade the Morsi government to accept a $4-billion
U.S. officials reacted cautiously Tuesday to word of the huge gulf offers, saying they needed time to assess what the countries planned to provide. Saudi Arabia and the Emirates both have records of making large pledges but not necessarily following through.
The aid pledges came as Egypt’s interim leaders appointed a caretaker prime minister and urged citizens to support a six-month timetable to revise the country’s constitution and hold fresh elections.
The Obama administration said it was “cautiously encouraged” by the timeline, a further signal that it would not cut off $1.5 billion in annual U.S. aid to Egypt.
The announcement of Hazem Beblawi, a leading liberal economist, as prime minister ended days of speculation after the first choice for the post was abruptly withdrawn because of opposition from conservative Islamists. Nobel laureate
Nelson Mandela remains in critical condition