Foreign direct investment and authoritarian resilience: Saudi and Emirati investment in Egypt and the role of foreign policy motivations

This article explores the intricate relationship between Foreign Direct Investment (FDI) and authoritarian resilience, focusing on Saudi and Emirati investment inflows into Egypt from the early 2000s to 2023. While existing literature highlights how FDI functions as a valuable resource for authoritarian leaders to bolster their political survival, such a domestic-centric focus tends to overlook the significant exogenous influences exerted by home countries. Reintegrating the international aspect, we argue that the foreign policies of investing countries act as intervening factors, as the perceived regional security threats prompt these nations to direct FDI towards authoritarian governments, enhancing regional security at the expense of democracy. We situated this intervening force by revealing the 2013 military coup in Egypt as a turning point, where the evolving threat perceptions and regional political objectives of Saudi Arabia and the United Arab Emirates directly influenced their FDI policies in Egypt. After this cut-off, Saudi and Emirati leaders mobilized their political resources to sway the Egyptian government, influencing the enactment of a new investment law and sustaining negotiations between the International Monetary Fund and Egypt. Additionally, the influx of economic resources from foreign sovereign wealth funds emerged as a critical mechanism that bolstered President Sisi's political survival.