From Aid to Influence: How Saudi Arabia Uses the Public Investment Fund as a Foreign Policy Tool in Egypt

In recent years, sovereign wealth funds (SWFs) have evolved from fiscal stabilisation instruments into powerful tools of geopolitical strategy. Their growing global importance is hard to ignore: with a combined volume of over $ 10 trillion, SWFs play a central role in the international financial system. Yet, in political science, they are still often treated as mainly financial actors. This thesis takes a different approach and focuses on their political function. Among the most prominent examples is Saudi Arabia’s Public Investment Fund (PIF). Under the Vision 2030 agenda, the PIF has expanded rapidly, not only in size but also in its role as a foreign policy instrument. This thesis examines how the PIF is used to pursue strategic goals in the case of Egypt. To answer this case, this thesis asks: How has Saudi Arabia used its Sovereign Wealth Fund (PIF) as a foreign policy tool in Egypt between 2019 and 2025? This question is particularly relevant in a context where traditional...Show moreIn recent years, sovereign wealth funds (SWFs) have evolved from fiscal stabilisation instruments into powerful tools of geopolitical strategy. Their growing global importance is hard to ignore: with a combined volume of over $ 10 trillion, SWFs play a central role in the international financial system. Yet, in political science, they are still often treated as mainly financial actors. This thesis takes a different approach and focuses on their political function. Among the most prominent examples is Saudi Arabia’s Public Investment Fund (PIF). Under the Vision 2030 agenda, the PIF has expanded rapidly, not only in size but also in its role as a foreign policy instrument. This thesis examines how the PIF is used to pursue strategic goals in the case of Egypt. To answer this case, this thesis asks: How has Saudi Arabia used its Sovereign Wealth Fund (PIF) as a foreign policy tool in Egypt between 2019 and 2025? This question is particularly relevant in a context where traditional foreign aid is being replaced by state-led investments, which increasingly blur the boundaries between economics and politics. To explore this question in practice, Egypt provides a particularly revealing case. Politically and strategically important, economically fragile, and historically dependent on financial aid from Gulf states. The timeframe of this thesis starts in 2019 because Saudi support has shifted away from direct aid toward targeted investments from 2018 onwards, primarily through the PIF’s creation of the Saudi Egyptian Investment Company (SEIC). These developments make Egypt an ideal case for studying how sovereign wealth fund investments can serve political goals. The analysis is based on three theoretical concepts: Economic Statecraft to examine the political use of financial tools, Soft and Smart Power to explore the symbolic and strategic aspects of investment, and Dependency Theory to assess long-term structural effects for recipient countries. Methodologically, this thesis follows a qualitative case study approach and draws on public sources, investment data, and sector-specific analysis. The thesis is structured as follows: a literature review provides the academic context and identifies research gaps. It is followed by the conceptual framework and methodology. The main case study chapter focuses on Egypt’s economic situation and the PIF’s investment strategy, including the theoretical analysis that explores the political impact of these investments. Following this, the discussion chapter places the findings in a broader context. The thesis concludes with a reflection on the wider implications of SWFs as instruments of foreign policy.Show less

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From Aid to Influence: How Saudi Arabia Uses the Public Investment Fund as a Foreign Policy Tool in Egypt