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In February 2024, the Egyptian government announced one of the largest foreign investment deals in its history: Abu Dhabi’s sovereign wealth fund—one of the UAE’s main financial arms—will invest around $35 billion in the country, $24 billion of which will be allocated to establishing a tourism project and free trade zone along the Ras El-Hekma coastline on the Mediterranean. Only eight months later, Saudi Crown Prince Mohammed bin Salman visited Cairo and signed a $15 billion investment agreement. Last April, during President Abdel Fattah el-Sisi’s visit to the Emir’s palace in Doha, he secured a Qatari investment package worth $7.5 billion—also expected to focus mainly on real estate and tourism. These three deals—exceptional even by Gulf standards—provide a lifeline to Egypt’s struggling economy. In Jordan, which faces economic challenges similar to Egypt’s, the Gulf states invested around half a billion dollars in 2024, comprising about a third of the foreign investment in the impoverished kingdom.

The nature of these investments marks a turning point in the Gulf monarchies’ economic assistance policy over the past two years toward regional states. The shift goes beyond economics: from a model based on unconditional grants to one centered on acquiring control of strategic assets at enormous scale. This model is also being applied in other regional countries (including post-Assad Syria) where Gulf states are investing.

This article focuses on the activities of the Gulf states in Egypt and Jordan, given their significance to both Israel and the Gulf. Over the years, these two countries have been major aid recipients—Egypt alone receiving nearly half of all Gulf-origin economic support. All six Gulf states invest and provide economic support to Egypt and Jordan to varying degrees, but Saudi Arabia, the UAE, and Qatar are the key players. Therefore, the article focuses solely on these three countries.

From Bailouts to Buyouts

The Gulf monarchies began economically supporting regional states in the 1960s, when they first began amassing wealth from oil profits. Repeatedly, they provided Arab governments with grants, loans, and deposits—often to bail them out of imminent economic collapse. The main goal of this policy was not economic or humanitarian but political: preserving existing regimes based on alliances and facing shared enemies—or out of fear that regime collapse would trigger a domino effect encouraging opposition and rebellion in the Gulf itself. Jordan’s stability is a particular Gulf interest due to its geographical proximity (including a long, porous border with Saudi Arabia) and its tribal, monarchical structure. Egypt, by contrast, is crucial due to its central role in the Arab world, especially in leading revolutions (e.g., the 1952 Free Officers’ Revolution and Egypt’s 2011 Arab Spring, both of which inspired other regional countries). Egypt is also the birthplace of modern political Islam, led by the Muslim Brotherhood—an ideological threat to Gulf regimes.

The political rationale for Gulf economic support to Egypt and Jordan only intensified after the Arab Spring in 2011 (Qatar being a notable exception, discussed later). The uprisings brought political instability and capital flight, due to plummeting tourism, investment, and confidence in local financial systems—especially in Egypt, where two presidents were ousted within 18 months amid chaos, but also in Jordan, where the Hashemite monarchy weathered the storm. The COVID-19 pandemic in 2020 and the 2022 Ukraine war further worsened the economic situation: Both countries now face continuous pressure on foreign currency reserves, among the world’s highest debt-to-GDP ratios, and over a quarter of their populations living below the poverty line. In Jordan, unemployment exceeds 20%, nearing 50% among youth. In Egypt—with over 100 million people—the government has had to gradually cut long-standing subsidies on essentials like bread. All this highlights Egypt and Jordan’s acute need for foreign aid and loans to survive.

This situation stands in stark contrast to that of the Gulf states, which have seen strong growth in recent years. Never has the gap between Gulf wealth and the rest of the Arab world’s poverty been as stark as it is today. Gulf capitals now express frustration at the futility of continued aid to Egypt and Jordan. Corruption, poor planning, and governance, along with the rulers’ penchant for extravagant projects (such as Egypt’s new administrative capital), have meant the money “disappears” quickly without lasting impact: Egypt and Jordan’s leaderships do not address core economic issues (e.g., economic centralization, bloated public sectors, low productivity, brain drain, and limited income sources) but merely “buy time” until the next crisis. The situation has become so dire that The Economist declared that President el-Sisi has “wrecked the Egyptian economy” during his decade in power.

Meanwhile, the threat to regime stability in Egypt and Jordan—real in the post–Arab Spring years—has diminished recently, especially due to the suppression of the Muslim Brotherhood, allowing more room to maneuver on foreign aid. Since the middle of the previous decade, the Gulf states have shifted focus to developing their own economies in order to diversify income and reduce dependency on oil and gas exports. This limits the amount of no-strings-attached cash they can offer. Moreover, nationalist—and sometimes populist—rhetoric in each Gulf country stresses prioritizing domestic interests over those of the broader Arab world.

A public sign of this policy shift came in 2023, when Saudi Finance Minister Mohammed Al-Jadaan announced at the Davos Economic Forum: “We used to give direct grants and deposits without strings attached and we are changing that.” Saudi columnist Tariq Al-Hamid, close to the royal family, criticized in parallel the waste and corruption under el-Sisi’s rule and blamed the Egyptian army’s grip on the economy for the country’s backwardness. At the same time, Qatar’s finance minister, Ali Al-Kuwari, clarified that future economic ties with Egypt would be purely commercial: “With Egypt, it’s purely commercial—just giving grants and charities are no longer the case for Qatar. When it comes to grants and cash and just checks, it’s becoming very difficult.”

The new model is based on foreign direct investments (FDIs). Saudi Arabia, the United Arab Emirates, and Qatar are purchasing—through government or semi-government companies and funds—assets in Egypt and Jordan. These assets were mostly state-owned in the past and have been privatized for the purpose of sale. In this way, the Gulf states retain the potential profits while simultaneously gaining geopolitical leverage over these countries. In return, the governments of Egypt and Jordan receive fast cash inflows. Furthermore, the privatization of government assets enables Egypt and Jordan to take out loans from the International Monetary Fund (IMF), which sets privatization as a condition for lending.

There are no accurate and reliable figures available regarding the total amount of money transferred by the Gulf states to Egypt and Jordan, nor regarding the breakdown between foreign direct investments and the “old” form of economic aid, such as deposits in local banks or the purchase of government bonds. Egypt and Jordan do not operate transparently, and regarding the sums reported in the media—it should be taken into consideration that these amounts are spread over several years (they do not represent readily available cash, especially considering frequent changes in oil prices). In any case, this behavior by the Gulf states should be seen as binding Egypt and Jordan into a long-term dependency relationship. At the same time, all the countries involved have a reputation for “above and below the table” payments, and it is likely that the publicly disclosed amounts represent only a portion of the money that finds its way into the pockets of the leadership and top business figures in Egypt and Jordan, thereby reinforcing this dependency.

In any case, the three discussed Gulf states are the largest foreign investors in both Egypt and Jordan. Based on publicly available data, there has been a significant increase in investments by these three Gulf states in Egypt and Jordan since the beginning of the current decade, a period that included the COVID-19 pandemic and the war in Ukraine. In fact, the amounts the Gulf states committed to invest in these two countries in 2023–2024 are greater than the total economic aid they provided during the entire previous decade.

Among the assets purchased by the Gulf states in Egypt and Jordan are real estate, land for construction and agriculture, industrial companies, and critical infrastructure, including power stations, railways, seaports, and airports. A review of the investments shows that the Gulf states are focusing on sectors where they have prior experience either domestically or abroad—such as luxury tourism, maritime transportation management, or energy infrastructure. At the same time, they are addressing the acute needs of Egypt and Jordan: water supply, food production, energy supply, and of course, employment.

Labor Migration to the Gulf

Another basis of the economic dependency relationship is the employment of Jordanians and Egyptians in the Gulf states, which provide job opportunities for many foreign workers in their massive economies. According to the latest data, no less than 12% of Jordanian citizens live and work in the three Gulf states in question (mainly in Saudi Arabia), and their money transfers (remittances) to the kingdom constitute almost one-tenth of Jordan’s GDP.

At the same time, the number of Egyptian workers employed in these three Gulf states alone is the highest among all Arab countries, numbering over two million, and they remit about $16 billion annually to Egypt. Before the COVID-19 pandemic, some five million Egyptians worked in the Gulf, but many of them left or were forced to leave during the pandemic. Countries like Egypt actively encourage the export of their citizens as labor and support this for several reasons, chiefly to alleviate domestic employment pressures and to bring in foreign currency inflows to the country. The mega-city “Neom,” currently being built by Saudi Arabia on the shores of the Gulf of Aqaba, alongside large-scale tourism projects being developed along the Red Sea, are expected to attract many young Egyptians and Jordanians in search of work. It should be noted, however, that the proportion of Jordanian and Egyptian workers remains negligible compared to the tens of millions of foreign workers in the Gulf, and therefore, this does not create reverse economic dependency. 

Political Leverage and Influence

The trend of Gulf acquisitions in Egypt and Jordan reflects the ongoing shift of the Arab world’s political-economic center of gravity from the “Fertile Crescent” states to the Gulf states. The trend initiated by US President Donald Trump to significantly cut American foreign aid (including the suspension and conditional reinstatement of aid to Jordan) has further pushed Egypt and Jordan into the arms of the Gulf—for both economic help and access to influence in Washington. This influence was especially apparent during Trump’s recent visit to the Gulf, to which Egypt’s president was notably not invited. Additionally, the absence of growth and reform in Egypt and Jordan, compared to the Gulf states’ accelerated development and growing integration into global markets, risks entrenching and deepening the dependence of Egyptians and Jordanians on the Gulf. However, this emerging dependence is not entirely one-sided. The Gulf states also have a vested interest in preserving the existing regimes in Egypt and Jordan, fearing that their destabilization—or worse, their overthrow—could jeopardize Gulf investments. This could occur through security instability or, in extreme cases, the nationalization of assets by a successor regime. Politically, the presence of strategic Gulf-owned assets in Egypt and Jordan reduces the likelihood of conflict between these countries and enhances Gulf leverage over their policies.

A particularly revealing case is the Egypt–Qatar relationship. Qatar was the main financial backer of the Muslim Brotherhood-led government in Egypt under Mohamed Morsi between 2012 and 2013, transferring over $7 billion. Morsi’s removal in a military coup led by el-Sisi triggered a diplomatic rift, peaking in 2017 when Egypt—alongside Saudi Arabia and the UAE—imposed a boycott on Qatar demanding a shift in its regional policies. Four years later, Egypt and the other boycotting states softened their demands and reconciled with Qatar. Immediately afterward, Qatar deposited $3 billion into Egypt’s central bank to help rescue its former rival from a foreign currency crisis. This immediate assistance—likely one of Cairo’s motivations for reconciliation—was followed by a series of Qatari investments in Egypt, making it harder for Egypt to again confront Doha in the future. Qatar’s state energy company acquired substantial stakes (30%–60%) in seven natural gas exploration blocks in Egypt’s territorial waters. Egypt is banking heavily on these explorations to meet its soaring energy demands due to population growth. If gas is discovered in these areas, Egypt will become significantly dependent on Doha for energy and will ironically, position Qatar, often seen in Israel as aligned with the Muslim Brotherhood, as a key backer of el-Sisi’s regime, the Brotherhood’s main enemy.

Qatar may indeed be using its new leverage to push Egypt to adopt its hardline rhetoric on the war in Gaza. Immediately following President el-Sisi’s visit to Doha last April—during which the massive Qatari investment was promised—el-Sisi significantly escalated his criticism of the war and of Israel, after 18 months of restraint. At the same time, Cairo refrained from responding to reports in Israel that Qatar was running an influence campaign against Egypt in Israeli public opinion. This development raises concerns about Qatar’s direct influence on the behavior of Israel’s key neighbor.

Strategic Location

Beyond economic leverage, the Gulf states are capitalizing on Egypt and Jordan’s geographic position. Their control over logistics infrastructure provides a major geo-economic advantage—and potentially, a foothold for military and intelligence presence under civilian cover.

First, the Gulf’s growing footprint is evident along the Red Sea, especially near the Suez Canal. The UAE’s DP World acquired the Egyptian port at the canal’s southern entrance and won the right to build a free trade zone at its northern entrance. Saudi Arabia’s national shipping company partnered with the Suez Canal Authority. In the Tiran Strait—which separates Saudi Arabia and Egypt and lies just 200 km from the canal—the Saudis purchased a massive plot at Ras Gamila on the Egyptian side, completing a territorial continuity with the nearby Tiran and Sanafir islands that Egypt transferred to Saudi Arabia in 2017 (following a long-standing territorial dispute likely resolved in Riyadh’s favor thanks to its economic support). Nearby, in Aqaba—Jordan’s only seaport—the UAE is building a freight rail link to the Dead Sea. In parallel, Saudi Arabia, the UAE, and Qatar share ownership with Egypt over the SUMED oil pipeline that crosses Egypt from the Red Sea to the Mediterranean, bypassing the Suez Canal. This pipeline normally transports oil from tankers too large for the canal and can serve as an emergency alternative for Gulf oil exports to Europe.

In 2020, UAE ruler Mohammed bin Zayed attended the inauguration of a large Egyptian army base on the Red Sea. A foreign leader attending another country’s military facility opening is rare, as is Egypt’s building of such a major base so far from its center during economic hardship—suggesting the UAE may be helping fund it as part of its strategic Red Sea footprint.

Jordan, meanwhile, serves as a vital overland route. Since March, Qatar has begun transporting liquefied natural gas to Syria via Jordan. The gas arrives by sea at Aqaba, is re-gasified at a floating facility, and then pumped through the Arab Gas Pipeline, which traverses Jordan from south to north into Syria. This supply plays a key role in expanding Syria’s electricity capacity after Iran halted its fuel shipments. Jordan is also central to the India–Middle East–Europe Economic Corridor (IMEC), a massive geo-economic initiative announced in 2023 to connect India to Europe via the Middle East (including Israel), through ports, railways, roads, and energy infrastructure. Saudi Arabia, the UAE, and Jordan are among the seven project partners (along with the United States, India, the European Union, and Israel), positioning IMEC as a strategic alternative to China’s Belt and Road Initiative.

Domestic Influence

A further consequence of Gulf investment is their increasing presence in Egypt’s and Jordan’s internal affairs. Where once they influenced the treasury, they now determine where the money goes—what sectors, populations, and regions benefit or lose. The “oxygen pipelines” of employment, electricity, and water for poor populations in Egypt and Jordan may now depend on the policy whims of Gulf leaders—who may not share the same priorities as local rulers. This is symbolically and nationally sensitive, amounting to “foreign takeover” and loss of sovereignty, which may be seen by some as humiliating submission, reminiscent of the European imperialism that both countries once fought to shed. This is especially true when the Gulf enriches local elites and rulers without incentivizing reforms.

There is a key difference between Egypt and Jordan in this respect. Jordan may react more mildly, as it has never seen itself as a regional hegemon but rather a junior partner to Arab leadership. It also shares a tribal-monarchic similarity with the Gulf states, with a royal family that hails from the Arabian Peninsula. After the Arab Spring, there was even talk of Jordan joining the Gulf Cooperation Council (GCC). Egypt, by contrast, has long viewed itself as the political, cultural, and social leader of the Middle East—by virtue of its population (nearly half the Arab world) and historical weight. Thus, many Egyptians—who view Gulf Bedouin societies as culturally and historically inferior—see Gulf support as particularly humiliating, especially when it comes with apparent dictates and a “liquidation sale” of national assets.

Certain steps have especially inflamed public sentiment. In Egypt, Gulf states acquired vast tracts of land (some larger than the Tel Aviv metropolitan area); took ownership of the country’s last remaining public beaches; and, most notably, the Egyptian military decided for the first time to privatize some of its civilian companies and assets—likely for sale to Gulf investors. This followed statements by Saudi and Qatari finance ministers declaring an end to unconditional economic aid. Many Egyptians see this as surrendering a national symbol.

As such, major Gulf investments in Egypt—and to a lesser extent in Jordan—may trigger local unrest, especially among opposition groups or those displaced by projects (e.g., Ras El-Hekma residents protesting their eviction for a luxury Emirati resort). Egypt and Jordan have relatively active civil societies and freer media than the Gulf, which may criticize or politicize these developments. As Egyptian opposition economist Elhamy Elmerghany put it: “By selling these assets, the country loses control of its resources while continuing to accumulate debt. We are losing our best companies, our strategic resources, mortgaging our ports and airports. All this for agreements signed without the knowledge of our citizens.”

Conclusion and Implications for Israel

Gulf aid to poor Arab countries—especially Egypt and Jordan—is more vital than ever, given their economic deterioration from the Ukraine war and the Houthi rebels’ attacks in Yemen, which have dramatically reduced Egypt’s Suez Canal revenues in recent years. Much of the Gulf investment in Egypt and Jordan cannot be explained by pure business logic, nor can the Gulf’s desire to deepen its economic presence in countries avoided by other foreign investors. Strategic and political interests clearly drive this activity.

However, this Gulf support—especially at current levels—is not guaranteed. Low oil prices and Gulf ambitions elsewhere (notably Syria and Lebanon) may shift resources to other critical fronts.

From Israel’s perspective, stronger Gulf influence in the Arab world is clearly beneficial. The Gulf states tend to be pragmatic, bear no historical hostility toward Israel, and pursue stable economic-diplomatic strategies, largely resistant to hostile public opinion. Greater Gulf sway in Egypt and Jordan—especially by Saudi Arabia and the UAE—may therefore be seen positively in Israel.

Moreover, Gulf investments in Egypt and Jordan are likely to bolster political and economic stability in both countries—another key Israeli interest. Their economic presence may also facilitate joint regional projects involving Israel in strategic sectors like water, energy, and agriculture. This reduces Israel’s relative share in such projects—often a sticking point with Egyptian and Jordanian public opinion. Especially relevant is Israel’s participation in the IMEC corridor, which depends on good relations with Saudi Arabia and could bridge tensions between Israel and Jordan to enable cooperation (e.g., rail, electricity, or other infrastructure). However, Syria’s regime change, which surprisingly took place after IMEC’s launch, may divert the corridor’s path from Jordan to Syria as the link to the Mediterranean and Europe—replacing Israel.

Conversely, joint energy developments in Egypt and Jordan may affect both countries’ future gas imports from Israel.

Israel has limited influence over the Gulf’s investment surge in Egypt and Jordan. But it should view strengthening and deepening ties with the Gulf states as critical to its regional standing and relations with its neighbors. Deepening relations with the UAE and advancing normalization with Saudi Arabia—despite its conditions—are essential. Promoting economic ventures involving Gulf states alongside Egypt and Jordan would create further incentives for regional cooperation. Israel should also monitor public alienation in Egypt and Jordan toward the Gulf states and their growing asset control, as well as toward their own regimes—given the direct implications for Israel and the regimes’ stability.