Egypt, China Sign Debt Swapping MoU

A general view of the Egyptian capital Cairo. (Reuters)
A general view of the Egyptian capital Cairo. (Reuters)
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Egypt, China Sign Debt Swapping MoU

A general view of the Egyptian capital Cairo. (Reuters)
A general view of the Egyptian capital Cairo. (Reuters)

Egypt and China signed on Thursday a debt swapping memorandum of understanding (MoU) for development projects.

Egyptian Prime Minister Mostafa Madbouly is on an official visit to Beijing where he met with China's President Xi Jinping.

During the meeting, Xi conveyed China's strong interest in partnering with Egypt across various domains, including infrastructure, energy, aviation, tourism, renewable energy, healthcare, and more.

He warmly welcomed Egyptian products into Chinese markets, highlighting the significance of Egypt being the first Arab nation to establish diplomatic ties with China.

Madbouly indicated the agreement on new expansions in the TEDA region to advance technology sectors, such as electric cars and green hydrogen production.

The PM expressed his aspiration for the participation of the New Development Bank of the BRICS group in financing his country's projects consistent with the Belt and Road initiative, especially in the field of new and renewable energy in the Suez Canal Economic Zone.

The Egyptian official thanked China for supporting Egypt's accession to the BRICS cooperation mechanism and expressed his readiness to work closely with China in multilateral cooperation to make the international landscape more balanced and just.

The BRICS group, which includes Brazil, Russia, India, China, and South Africa, is seeking to enhance economic cooperation between member states and trade exchange in local currencies.

The Egyptian cabinet said in a statement that Minister of International Cooperation Rania al-Mashat signed the agreement with the head of the China International Development Cooperation Agency on the sidelines of the third session of the Belt and Road Forum.

The statement added that the memorandum reflects the strength of the bilateral relations between the two countries, bound by historical ties of friendship that date back to ancient history.

It aims to boost cooperation between the two countries in debt swaps to implement projects to achieve sustainable development by using tranches of Chinese debt to implement projects agreed upon by both sides.

Egypt has been involved in debt swap programs for development with Italy since 2001 and Germany since 2011 to strengthen the state's efforts to achieve comprehensive growth.

Meanwhile, Egypt's gold miner Centamin announced Thursday the production of 321,931 ounces of gold at the Sukari mine in Egypt in the first nine months of 2023.

The UK-listed firm said in a statement that it achieved revenues of $200.4 million during the third quarter of the year from selling 103,807 ounces, with an average actual price of $1,927 per ounce, while capital spending amounted to $59.1 million.

Centamin explained that the cash cost of production amounts to $882 per ounce, while the production cost for continuing operations amounts to $1,226 per ounce sold in the third quarter.



The Future of Revenues in Syria: Challenges and Opportunities for the Interim Government

A money changer conducts a transaction in US dollars and Syrian pounds for a client on a street in Damascus (AFP)
A money changer conducts a transaction in US dollars and Syrian pounds for a client on a street in Damascus (AFP)
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The Future of Revenues in Syria: Challenges and Opportunities for the Interim Government

A money changer conducts a transaction in US dollars and Syrian pounds for a client on a street in Damascus (AFP)
A money changer conducts a transaction in US dollars and Syrian pounds for a client on a street in Damascus (AFP)

Syria faces significant challenges as discussions intensify about the post-Bashar al-Assad era, particularly in securing the necessary revenues for the Syrian interim government to meet the country’s needs and ensure its sustainability. The widespread destruction of the economy and infrastructure poses a dual challenge: rebuilding the nation while stimulating economic activity and ensuring sufficient financial resources for governance.

Currently, the interim government relies heavily on international and regional support during the transitional phase. Donor countries are expected to provide financial and technical assistance to help rebuild institutions and alleviate the suffering of the Syrian people.

However, as the country transitions, external support alone will not suffice. The government must identify sustainable revenue sources, such as managing natural resources, imposing taxes, and encouraging foreign investments.

Opportunities from the Syrian Diaspora

The Syrian diaspora is seen as a significant economic resource, contributing through remittances or involvement in reconstruction projects. However, realizing these opportunities requires the establishment of strong, transparent institutions, effective resource management, and a clear strategic plan to rebuild trust with both local and international communities.

Securing revenues for the interim government is not merely a financial challenge but also a test of its ability to lead Syria toward stability and prosperity.

Securing Economic Resources

Nasser Zuhair, head of the Economic and Diplomatic Affairs Unit at the European Policy Organization, stated that the interim government, currently led by Mohammed al-Bashir, may replicate its revenue-generating models from Idlib. Resources in Idlib were drawn from temporary measures that are insufficient for sustaining a national economy like Syria’s.

In an interview with Asharq Al-Awsat, Zuhair explained that these resources included taxation, fuel trade with Syrian Democratic Forces (SDF)-controlled areas, international aid for displaced persons in Idlib, remittances from the Syrian diaspora, and cross-border trade facilitated by Turkiye.

“The interim government believes that sanctions relief is a matter of months, after which it can begin to establish a sustainable economy. For now, it will rely on the same resources and strategies used in Idlib and other controlled areas,” Zuhair added.

Challenges and Opportunities

Despite the former regime’s reliance on illicit revenues, such as drug trafficking and Captagon production—estimated to account for 25% of government revenues—the interim government has several potential avenues for generating revenue.

International Aid

Zuhair emphasized that cross-border humanitarian aid indirectly supports local economies. “The current government understands that international and regional aid will be substantial in the coming period, particularly for refugee repatriation and infrastructure development,” he noted.

He added that efforts to secure funding from the Brussels Conference, which allocates about $7 billion annually to support Syria, will be critical. Strengthening ties with regional and European countries, such as Saudi Arabia, Kuwait, Germany, and the UK, is also a priority. However, securing such aid depends on establishing a political framework where Hayat Tahrir al-Sham (HTS) does not dominate governance.

He further noted that international and regional support will likely remain a key revenue source for the interim government, including humanitarian and developmental aid from organizations such as the United Nations and the World Bank.

Taxes and Tariffs

Zuhair highlighted taxes and tariffs as essential components of the government’s revenue strategy. This includes taxing local economic activities, customs duties on cross-border trade, and fair taxes on merchants and industrialists in major cities like Damascus and Aleppo.

“The government can also impose income, corporate, and property taxes while improving border management to maximize revenue from customs and tariffs,” he added.

Agriculture and Natural Resources

Syria’s vast and fertile agricultural lands present an opportunity for revenue generation, Zuhair underlined, explaining that taxes on agricultural products could contribute to state income. However, this sector faces logistical challenges and high production costs. By directing the agricultural sector toward self-sufficiency, the government could reduce dependence on imports and create surplus revenue, he remarked.

Additionally, managing natural resources such as oil and gas could provide a significant revenue stream if the government gains control over resource-rich areas like northeastern Syria, the official noted.

Reconstruction

Reconstruction presents another potential revenue source. International companies could be encouraged to invest in rebuilding efforts in exchange for fees or taxes. Public-private partnerships with local and foreign firms in sectors such as infrastructure and housing could also generate significant funds.

Remittances from the Diaspora

Zuhair stressed the importance of remittances from Syrians abroad, estimating that these transfers could reach $2 billion annually by 2025. Encouraging the diaspora to send funds to support family members and rebuild properties will be a key priority for the government.

Domestic Investments

The interim government has shown its ability to attract domestic investments in real estate, industry, commerce, and agriculture, despite international sanctions. According to Zuhair, leveraging Türkiye as an international gateway, the government could expand this model across Syria, taking advantage of the challenging economic conditions left by the previous regime to draw reasonable investments in its first year.

Tourism and Small Businesses

Revitalizing the tourism sector could directly contribute to revenue, he added, noting that restoring historical and cultural sites, once security and stability are achieved, will attract visitors and generate income.

In addition, encouraging small and medium-sized enterprises will help revive the economy and create jobs, Zuhair emphasized, pointing that supporting manufacturing industries could provide a sustainable revenue stream.