Egypt is selling land to make up for lost revenue from Houthi terrorism.

Egyptian Finance Minister Mohamed Maait said on Sunday that Egypt's $24 billion deal to sell real estate in the Mediterranean resort complex of Abu Dhabi and a $20 billion support package from the International Monetary Fund (IMF) will balance the national budget despite painful losses of Suez Canal revenues due to incessant attacks in the Red Sea by Iran's Houthi militias from Yemen.

"The upside is the Ras al-Hikma deal, a significant part of the funds from which will go into the general budget in pounds. The total deficit will be less than the set deficit, thanks to Ras al-Hikma," Maait told reporters on Sunday. Ras al-Hikma is a coastal city in Egypt that will be developed into a major resort - "a full-fledged urban community, not just a resort," as Egyptian Prime Minister Mostafa Madbouly said in February - at a total cost of $150 billion.

Work on this massive construction project is scheduled to begin in 2025. Egypt sold the rights to develop Ras al-Hikma to a consortium from the United Arab Emirates (UAE) for $24 billion, as well as a 35 percent stake in the development. 10 billion dollars of the sale has already been deposited with Egypt's central bank, with the rest due by May.

Ras al-Hikma is the largest development project and the largest land sale in Egypt's history. The funds received were large enough to significantly strengthen the Egyptian pound against the U.S. dollar, which was a condition of the IMF for its $20 billion financial support.

The large inflow of foreign exchange into Egypt's coffers would also make imports smoother, especially large food imports, accompanied by the politically favorable effect of lowering food prices before the Ramadan holiday. Egypt needed foreign currency so badly that a huge black market in foreign exchange transactions developed.

The Suez Canal has long been a major source of revenue for Egypt, but with attacks by Iran's Houthi militia on cargo ships and tankers in the Red Sea, revenues from the canal are down nearly 50 percent in 2024. A Marlin Luanda oil tanker is seen on fire after an attack in the Gulf of Aden on Jan. 27, 2024. (Indian Navy via AP)

Egyptian President Abdel Fattah el-Sisi said in February that the loss of revenue from the Suez Canal is particularly painful for an economy that has only just begun to recover from the Wuhan coronavirus pandemic and has yet to recover from the Russian invasion of Ukraine. In his press conference on Sunday, Finance Minister Maait cited the Red Sea crisis as the main cause of Egypt's financial turmoil due to higher interest rates on government debt.

Egypt raised Suez Canal tariffs by about 15 percent to compensate for lost revenue, but there was nothing it could do in the Red Sea to alleviate terrorism, since the Houthis were attacking ships in the name of the Palestinians. The Sisi government feared the diplomatic consequences of taking measures that could be perceived as harmful to the Palestinian cause, and was perhaps even more worried about the flood of Palestinian refugees flowing from the Gaza Strip.

Selling a huge swath of coastal real estate was the only way for Egypt to secure billions in crucial foreign exchange. The plan has not aroused enthusiasm among the roughly 10,000 tribal residents of Ras al-Hikma, who complain that they are being unfairly compensated for the loss of their homes to foreign developers.

Media Middle East Eye (MEE) found locals spreading cruel and sarcastic memes on social media about their impending eviction by wealthy Emirati developers, including some mocking other Egyptians who suggest they could become as rich as the oil sheikhs by selling the olive and fig farms that now cover the area of Ras al-Hikma.

One elderly farmer sadly noted that the olive trees on his venerable family plantation are actually older than the United Arab Emirates. "No amount of money is worth my family's history and pride, but if we are forced, we expect fair compensation, at least enough to continue our profession," the olive farmer said.

MEE pointed out that the Egyptian government is keeping the details of the Emirati deal secret, including the compensation that will be offered to people currently living in Ras al-Hikma.