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UPDATE 1-Egypt pens energy debt payoff deal, puts activists on trial

Thu, 05th Dec 2013 17:22

* Egypt says agrees timetable on $3 bln in oil arrears

* Prosecutor refers activists to trial after protests

* Hardline Islamist party urges support for constitution

* Footballer banned from internationals over Mursi support

By Tom Perry

CAIRO, Dec 5 (Reuters) - Egypt's army-installed governmentunveiled a timetable to pay $3 billion of $6.3 billion it owesto foreign oil firms on Thursday, part of a campaign to reviveconfidence in an economy hammered by three years of politicalturmoil.

Five months after President Mohamed Mursi's downfall andfollowing a fierce crackdown on his Muslim Brotherhood, thegovernment is trying to restore a semblance of normalcy bymoving ahead with a political roadmap and boosting the economy.

But criticism of the army-backed authorities has spreadrecently to include secular activists angered at governmentmoves seen as a threat to political freedoms won by the 2011uprising against president Hosni Mubarak.

On Thursday, prosecutors ordered three dissidents to standtrial over protests ignited by a law that severely restricts theright to demonstrate. They include Ahmed Maher, one of thesymbols of the 2011 uprising, who faces charges includingprotesting without official permission.

Saying the country needed to be spared more instability, thehardline Islamist Nour Party urged Egyptians to approve a newconstitution in a referendum that is an important milestone inthe political roadmap. Nour backed Mursi's ouster.

The government has pointed to the approaching referendum asproof of political progress it hopes will propel the economy ofEgypt, whose instability worries the West because of its peacetreaty with Israel, proximity to Europe and control of the SuezCanal, the shortest sea trade route between Asia and Europe.

Cairo aims to revive investment in the crucial energy sectorby paying off debts to foreign firms that extract its oil andgas. Egypt's finances have been buoyed by $12 billion infinancial aid from Saudi Arabia, Kuwait and the United ArabEmirates - states deeply hostile to the Muslim Brotherhood.

Under a timetable announced on Thursday, the government willpay off $3 billion of the debt to foreign firms in monthlyinstalments until December 2017, the state news agency said.

Arrears of $1.5 billion will be paid straight away, it said,following the government's announcement on Wednesday of finalapproval of that sum. The government is in talks to agree atimetable to repay the remaining $1.8 billion, MENA said.

It did not say with which firms the state was negotiating.

Financial disclosures by companies including BP, BGGroup, Edison SpA and TransGlobe Energy show that Egypt owed them more than $5.2 billion at theend of 2012.

Prior to the 2011 uprising, the oil and gas sector was amajor focus of foreign direct investment in Egypt.

"We have been on hold since the revolution, with minimalexploration," said Mona Mansour, chief economist at CI Capital."An agreement is definitely a boost."

THE "ROAD TO STABILITY"

The government's ability to pay oil companies andcontractors suffered as tourists and investors left, cutting taxrevenue and eroding foreign exchange reserves.

Mursi's political demise, the latest twist in Egypt'sturbulent transition, kindled the worst bout of internalconflict in its modern history. Security forces killed hundredsof his supporters in the weeks after his ouster, and lethalattacks on the security forces have become commonplace.

Some 200 soldiers and policemen have been killed.

Though it has been driven underground by a securitycrackdown, the Muslim Brotherhood continues to organise protestsagainst a government it says stole power in a military coupagainst a democratically elected leader.

It rejects the army's roadmap as illegitimate.

The Nour Party, which came second to the Brotherhood in theparliamentary election two years ago, helped draft the newconstitution, which enhances the autonomy of the alreadypowerful military and strips out Islamist-inspired provisions.

"The constitution is considered a first step on the road tostability that all Egyptians aspire to, and to preventingsliding into a spiral of anarchy," party leader Younes Makhyounsaid.

The referendum is to be followed by presidential andparliamentary elections next year, though a last minuteamendment to the draft constitution completed earlier this weekhas thrown the sequencing of the elections into doubt.

The change allows the interim head of state to call apresidential election first. Lending weight to the arguments forreversing sequence, Deputy Prime Minister Ziad Bahaa El-Din hassaid he favours holding the presidential election first, sayingit will take much longer to hold parliamentary polls.

Pressing an official crackdown on dissent, the EgyptianFootball Association (EFA) suspended from internationalcompetition a player who expressed solidarity with Mursisupporters killed in the crackdown.

After scoring a goal in the final of the African ChampionsLeague last month, Ahmed Abdelzaher of Egypt's Al Ahli flashed afour-finger hand gesture seen as supportive of Mursi. The EFAruled that he had mixed "politics with sport".

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Copyright 2024 Alliance News Ltd. All Rights Reserved.

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