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Sunday, 2 April 2017

What we’re tracking on 02 April 2017

President Abdel Fattah El Sisi’s DC marathon week kicked off on Saturday when he landed at Andrews Air Force Base. On the agenda: A reset of relations with the United States and meetings with top officials at the International Monetary Fund and the World Bank.

The White House seems to want better ties almost as much as we do: The always ineloquent Sean Spicer managed a brief statement to the effect that US President Donald Trump and El Sisi will “build on the positive momentum they have built for the United States-Egypt relationship.” The real meat came in a background briefing for reporters by a US National Security Council Official, which noted that while the meeting would focus on security and terrorism, “President Trump also wants to increase the focus on economic and commercial cooperation in our bilateral relationship. Building a more stable and productive economy is a critical step to ensuring long-term stability in Egypt. And President Sisi, we would like to note, has begun a necessary economic reform plan that will strengthen the Egyptian economy if it is fully executed.” (Read the full transcript of the NSC briefing here, including the Q&A, which also touches on King Abdullah of Jordan’s planned 5 April visit.)

So is Egypt safe from Trump’s planning cuts to US foreign assistance programs? It remains an open question but the National Security Council official said, “We’ve had a longstanding relationship with substantial foreign military assistance and economic support. That support has continued, and we anticipate it will continue until the future. We’re in the budget process right now, and those discussions are ongoing as to how it will be broken out. But we are going to maintain a strong and sufficient level of support to Egypt and Jordan.” The official also declined to specify whether Egypt might be allowed to once again acquire US weapons on credit.

Trump isn’t going to beat us up on human rights, but the issue will be raised. Says the unnamed senior administration official in the briefing: “Human rights are always an issue of concern to the United States, and they’re first and foremost in our discussions. Our approach is to handle these types of sensitive issues in a private, more discreet way. And we believe it’s the most effective way to advance those issues to a favorable outcome.”

The visit is getting plenty of ink in the mainstream press, including the Wall Street Journal, and the New York Times, both of which are leading with the angle that there is a “shift” in the relationship that will sideline human rights in favour of security cooperation. As you might expect, the visit is the top global story on Egypt this morning; we have more in Egypt in the News (below).

Members of the House of Representatives accompanying El Sisi to DC are going to lobbyCongress to designate the Ikhwan a terrorist organization, according to Ahram Gate. The delegation, led by Deputy House Speaker Soliman Wahdan has already begun meeting with members of congress, Ahram Online reports. The Trump administration appears to have cooled on designating the Ikhwan a terror group, with the NSC official telling reporters, “So the President is interested in hearing President al-Sisi’s views on the Muslim Brotherhood issue. … We, along with a number of countries, have some concerns about various activities that the Muslim Brotherhood has conducted in the region. But that’s going to be a discussion that will unfold between us and Egypt.”

El Sisi will also meet with the top officials at the World Bank and International Monetary Fund, where he will pitch further aid and cooperation on the economic front, according to Reuters.

El Sisi kicked off the trip by discussing Africa’s 2030 Agenda for Sustainable Development with the President of the UN’s General Assembly Peter Thompson on Saturday, according to an emailed statement.

Activists and the Ikhwan have rolled out the red carpet in DC for El Sisi, unleashing a “tweetstorm” and plastering some DC neighborhoods with posters to bring attention to Egypt’s human rights record. You can sample the tweetstorm here.

Miss Thursday’s deadline to file personal tax returns? You’ve still got today. The Tax Authority has extended the deadline to file tax returns to tonight at 8 PM CLT from this past Friday, 31 March. Companies have until the end of April to file.

NI Capital will solicit offers this month from investment banks to manage share issuances of state-owned companies on the EGX, sources told Al Borsa. There are no details regarding the issuances themselves or their timing. We got a hint of what could be in store as part of the government’s IPO program after the Oil Ministry greenlit the process to offer up to 24% of Enppi’s shares on the EGX last week.

Travel group Tui is reporting a decline in the number of travelers visiting North African destinations, including Egypt, in addition to Turkey, the Financial Times reports. Terror threats and political instability appear to be behind this supposed rollback. This stands in contrast to a report last week that Tui rival Thomas Cook is seeing early signs that tourists are returning to Egypt and Turkey.

How do you know that tourism is trickling back? When a group of eight traveling to Gouna on a non-holiday weekend has to split up on three different aircraft because all flights to Hurghada are packed. Those of us who were lucky enough to make it on the Thursday evening flight out of Cairo were pleasantly surprised to find a planeload of happy Brits. Definitely a welcome change, even if it does mean we now have to book our flights well in advance.

The customs exchange rate has been set at EGP 16.50 per greenback for April, down from EGP 17.00 per USD 1 the month before, Finance Minister Amr El Garhy told Reuters’ Arabic service on Thursday.

Emerging market equities appear to have just posted their best quarter in five years, with the MSCI Emerging Markets index up 11.4% for the first three months of the year, the Financial Times reports. “Capital flows to emerging markets have continued to surge” in the same period “with cross-border portfolio flows in March at their highest monthly level since January 2015,” the newspaper adds in a separate piece.

** We’re tight on space this morning, so we’ll have the results of our 1Q2017 reader survey for you tomorrow morning. We’ll have drawn the names of the folks we’re inviting to lunch.

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