During President Abdel-Fattah el-Sisi's first term in office (2014-18), Egypt had strained relations with Turkey, Qatar, and Iran. However, this began to change during his second term, as Cairo made an incremental shift toward Ankara, Doha, and later Tehran. This shift coincided with changes in global and regional dynamics, stalemates in many of the Middle East’s conflict zones, and a detente between regional powers. While some analysts attribute Egypt's realignment to a change in the foreign policies of its influential allies, the United Arab Emirates and Saudi Arabia, toward engaging with the three countries, it can be argued that Egypt's shift is primarily motivated by its domestic dynamics and its unfulfilled foreign policy objectives between 2014 and 2018. Egypt's realignment, in that sense, seeks to achieve multiple unmet domestic and regional aims.
Mitigating the financial crisis
The most pressing of these goals is mitigating Egypt’s financial crisis. For years, the country has faced a financial crisis aggravated by inflation, substantial foreign debt, and a foreign currency shortage. Domestically, this has led to soaring prices for goods and services, putting the Egyptian government under pressure from social discontent. The International Monetary Fund and Egypt's traditional allies, such as Saudi Arabia and the UAE, which previously provided tens of billions of dollars in assistance, appear unwilling to provide additional funding this time around unless Egypt adopts structural reforms. But further accelerating fiscal reforms could spark a backlash and fuel unrest, a concern that Egypt perceives as a matter of national security. This dilemma has prompted Cairo to seek other sources of foreign currency by approaching other donors, attracting foreign investors, trying to get involved in post-conflict reconstruction in the region, supporting the tourism sector, and, more importantly, turning the country into a liquefied natural gas (LNG) hub for Europe.
Following the restoration of diplomatic ties with Cairo, Doha deposited $3 billion into Egypt’s central bank last year. In addition, Turkey and Qatar pledged $5.5 billion in investments. With their leverage in Libya, both countries could potentially enable Egypt to access postwar reconstruction opportunities there. Similarly, Iran's influence could grant Egypt access to the reconstruction market in Syria. The combined cost of rebuilding Libya and Syria is expected to exceed $350 billion, which could create profitable opportunities for Egyptian companies once funding for such efforts is available. In parallel, restoring ties with Iran could provide a lifeline for Egyptian tourism, a vital source of income for the country, accounting for around 10-15% of the economy, and one that has fluctuated since 2011. Egypt hopes to double tourist numbers to 30 million annually by 2028, in part by drawing a growing share of Iran’s outbound tourists, estimated at 6 million in 2018. For Iranian tourists, Middle Eastern countries are among the most popular destinations. In a change announced earlier this year, Egypt will allow Iranians to obtain visas on arrival in the south of the Sinai Peninsula to extend access to other parts of the country.
Becoming a regional LNG hub
Egypt's ambition to become a natural gas hub in the Mediterranean is another goal with a political dimension for its regional realignment. In mid-2022, Egypt signed a memorandum with the EU and Israel to boost its LNG exports, capitalizing on its existing infrastructure, and, more importantly, benefitting from Western needs and the global gas shortage driven by the conflict in Ukraine. Egypt, which shipped 80% of its LNG to Europe in 2022, aims to boost its exports by roughly 40% from 2025, in part by using its infrastructure to carry Israeli gas, with a primary focus on the European market. However, Egypt still needed the cooperation of Turkey, which has contested its ambitious gas exploration efforts in the Mediterranean. De-escalation with Turkey could result in a settlement over the two countries’ respective maritime economic zones and boost Egypt’s exploration in the area. That would not only increase Egypt's political significance for Europe but could also generate substantial profits. Following the Cairo-Ankara rapprochement, a deal between Libya and Turkey that allowed Turkish companies to explore in waters that are disputed with Egypt was suspended.
But Egypt's ambition to become a regional LNG hub also needs bigger investors. This is where Qatar comes in. By the end of 2021, Doha was one of the most active sovereign investors globally through the Qatar Investment Authority (QIA), estimated to have $300 billion in assets. Egypt has proposed economic incentives to Qatari investors through tax exemptions and offers to operate ports along the coast. The energy sector is of particular interest for the Qataris, whose eyes are also on manufacturing, telecommunications, construction, and tourism. In March 2022, Qatar Energy signed an agreement with Egypt ExxonMobil to acquire a 40% interest in a gas exploration block off the coast in the Mediterranean. But if that is about economics, what about politics?
Breaking the pincer
Politically, Egypt's realignment could bring stability to its western border with Libya, a country where the post-Gadhafi security vacuum has previously allowed jihadists to infiltrate Egypt and conduct operations targeting the army. Over the years, Egypt, on the one hand, and Qatar and Turkey, on the other, have supported different political factions in Libya. Although the escalation between Egypt and Turkey in 2020 got close to a military confrontation, a stalemate has since prevailed. Cairo’s support for Gen. Khalifa Hifter in eastern Libya failed to achieve a decisive victory, leaving Egypt in need of building bridges with the Tripoli government in the west and trying diplomacy instead of proxy war.
But for Egypt the advantage of repairing relations with Turkey extends to the Horn of Africa as well, a region where Iran, too, has influence. The Horn of Africa is a strategic region for Egypt as it overlooks the entrance to the Red Sea and the Suez Canal, and it comprises the upstream of the Nile River, which provides vital water resources for Egypt’s agriculture, drinking water, and energy production. For years, the Turkish presence in the Horn of Africa, including Ankara’s construction of a military base in the Somali capital, Mogadishu, and efforts to establish a footprint on the Red Sea through Sudan, has alarmed Egypt. Today, rapprochement could help Egypt to break the Turkish pincer from the west and the south. And that could allow Egypt to focus on potential threats coming from the Egypt-Sudan border while also pursuing a deal over the Grand Ethiopian Renaissance Dam (GERD), a massive hydroelectric project that Ethiopia considers critical to its economic development.
The Grand Ethiopian Renaissance Dam
Since 2014, Egypt has sought to reach an agreement with Ethiopia over the GERD that ensures minimal harm to Cairo’s share of the Nile River. Although Egypt has affirmed that “all options are on the table,” conventional military action seems less feasible than before, meaning its options are probably limited to diplomacy. But Egypt's traditional partners, such as the UAE, the U.S., and Russia, have not showed enough muscle to pressure Ethiopia to reach a deal. Thus, the potential assistance of influential actors in the Horn of Africa, including Turkey and Iran, could help. Both countries have strong ties with the Ethiopian government. Turkey, the second-largest foreign investor in Ethiopia, signed a military cooperation agreement with Addis Ababa in 2021 amid an escalation with Cairo. The use of Turkish and Iranian drones in Ethiopian Prime Minister Abiy Ahmed’s war in Tigray suggested potential Turkish and Iranian military support. Moreover, Turkey offered to mediate negotiations between Ethiopia and Sudan over the GERD a few years ago. Today, by approaching Iran and Turkey, Egypt could benefit from their leverage over Ethiopia to help reach a fair deal for both sides.
Leveraging relationships with US adversaries
Another goal of Egypt's realignment is to enhance its strategic significance for the West. While Egypt's aspirations to become an LNG hub could bolster its importance for Europe, Cairo also recognizes the need to strengthen its relevance for the United States. Over the past decade, the bilateral relationship between Egypt and the U.S. has experienced fluctuations and some tensions, particularly concerning human rights. Previously, Egypt's significance for the U.S. predominantly relied on its contributions to counterterrorism, regional co-mediation, and its peace agreement with Israel. However, the Middle East geopolitical landscape is evolving and emerging regional powers are now taking on some of Egypt's previous roles. One significant development in this regard is the Abraham Accords, which facilitated an unprecedented level of engagement between Arab monarchies and Israel, surpassing the Egypt-Israel peace that remained cold for decades. Nowadays, other countries, including Qatar, Saudi Arabia, and Oman, have taken on responsibility for mediating regional conflicts as well. To maintain its relevance in the Israeli-Palestinian conflict, Egypt recognizes it needs to control escalation from Gaza and to continue to work toward fostering reconciliation among the Palestinian factions. To this end, Egypt needs Turkey and Qatar's leverage over the Islamic movement in Gaza. It also needs Iran, whose support for Hamas and Palestinian Islamic Jihad significantly contributed to the expansion of the range of their missiles in a short period of time to 250 kilometers, reaching Israeli cities, including Tel Aviv.
Moreover, as some Arab countries currently leverage their relationships with U.S. adversaries (Russia and China), a calculated rapprochement with Iran could give Egypt some leverage in its relationship with the U.S. That aligns with Egypt's calculated approach toward Russia after 2014 to pressure the U.S. Today, approaching Iran would contribute to Egypt's interest in diversifying its global allies and partners, becoming part of the BRICS grouping of leading emerging economies, and minimizing global reliance on the U.S. dollar. All of this could give Egypt additional bargaining chips in its relationship with the U.S., which is still crucial for furthering Cairo’s interests.
Minimizing the Muslim Brotherhood effect
Another goal for the Egyptian government is to continue dismantling the Muslim Brotherhood in diasporas, as its propaganda machine could take advantage of the regime's domestic vulnerability over the economic crisis. Since 2013, many leaders of the Brotherhood, designated as a terrorist group in Egypt, fled to Tukey and Qatar and established media platforms and satellite television channels targeting the regime. Although the government successfully went after the group's organizational, financial, and mobilizational capacities in Egypt, the Brotherhood still has influence on social media. As a condition for normalizing ties, Egypt demanded that Turkey and Qatar end their support for the Muslim Brotherhood. Approaching Turkey and Qatar has allowed Egypt to disrupt the presence of the group’s leaders and key figures in both countries, while pressuring others to move elsewhere and lowering the tone of their critics.
Ultimately, Egypt's regional realignment can be seen as a response to internal and regional dynamics. Nevertheless, Cairo continues to face multiple challenges. Although funding from external sources may contribute to mitigating Egypt's economic crisis, it cannot substitute for necessary domestic reforms. Furthermore, Egypt's success in achieving its regional goals will depend on several factors. These include the durability of the newly formed ties in a dynamic region and what Egypt can offer to the three countries in return. Additionally, it will also hinge on whether the expected benefits outweigh profound conflicts of interest, as well as the feasibility of maintaining relationships based on cooperation and competition. The response of other influential Egyptian partners, such as Israel and the U.S., to its approach to Iran poses another challenge as well. Finally, the potential of Egyptian diplomacy to navigate regional complexities and balance partners with conflicting agendas will play a significant role in determining whether Cairo’s regional realignment proves successful.
Amr Salah Mohamed is a Graduate Lecturer and Ph.D. Candidate at the Carter School for Peace and Conflict Resolution at George Mason University. His research interests focus on conflicts in the Middle East, particularly the case of Egypt. He has made numerous contributions to Arab journals and newspapers, the Carnegie Endowment for International Peace, The National Interest, and the Washington Institute for Near East Policy.
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