Egypt: A Spent Force in Deep Political and Economic Crisis

By Berhane Kahsay
Tigrai Online, January. 7, 2016

Egypt’s international stature has been severely damaged as a result of the ongoing strife and the Arab nation seems to be struggling to accept her new substantially reduced position in contemporary global order. In one of his recent speeches, the President of the once powerful nation, Abdel Fattah el-Sisi, warned his people by asserting that’’ they lived in a broken country’’, and that Egypt has become ‘’the semblance of a state, and not a real state.’’

Five years of political and economic crisis has had its toll on Egypt resulting in political marginalisation and loss of leadership of the Arab world. Islamist insurgency is on the increase especially in Sinai Peninsula where recently a Russian charter plane was shot down in addition to the crash of an Egypt Air flight in the Mediterranean Sea. Egyptian tourism industry which brought in $13 billion in 2010, has been badly affected and is unlikely to return to what it was previously, according to The MiddleEast online.

The leadership void left by Egypt has now been filled by Saudi Arabia and Iran who have been engaged in a dangerous political/religious competition for regional dominance and beyond. And in the process, the two adversaries have caused so much havoc and large numbers of fatalities in Syria, Iraq, Lebanon Bahrain, Libya and Yemen.

Lately, Egypt favoured a Russian motion on Syria in the UN Security Council and this has irked Saudi Arabia which has been continuously pumping billions of dollars into the Egyptian economy in order to keep it going. Only last year, Saudi Arabia and the other Gulf States committed a $12 billion package to replenish Egypt’s fast diminishing foreign reserves in addition to the $12.5 billion aid pledged made during the 2015 Sharm el-Sheik summit to stimulate the Egyptian economy (Source: Al Arabiya).

Saudi Arabia has of late indicated that it would no longer provide financial relief to Egypt for backing Russian and Iranian position on Syria. And regional analysts believe that this would inflict further damages to the Arab republic’s economy which has already been in a bad shape since el-Sisi grabbed power by discarding the democratically elected government of Mohammed Mursi. The Saudi Kingdom has now suspended with immediate effect  a $23 billion 15 years oil deal with a nominal annual percentage rate of 2% (Source: Geopolitical Monitor). Furthermore, Qatar which is a member of the Gulf States, has decided not take further work permit applications from Egyptians where already there are 150,000 of them employed in the country in various capacities (Source: Middleeasteye). 

Egypt thought that by linking with Russia and Iran would send shivers down the spines of the Gulf States and believed that this would safeguard the unabated stream of Arab monetary assistance but the outcome was not what it anticipated. Egypt is the second highest recipient of US aid worth $1.5 billion (2014) because of its peace agreement with Israel. And the Arab nation took full advantage of its strong global position to make billions of dollars out of all the politically susceptible autocratic Gulf royal houses. However, with all the financial backing from fellow Arabs and the United States, Egypt failed to qualitatively transform the lives of its own citizens. According to Bloomberg, a US Financial and Media company, a quarter of the 90 million Egyptians live in poverty and a similar proportion of adults can’t read and write.

The stringent measures taken by Saudi Arabia and the other Gulf States has sent shock waves throughout Egypt which was used to having its own way. Egyptian politicians and the media have found it too painful to come to terms with the reality that their country is no longer leader of the entire Arab world. And to enrage the Egyptians further, Mr Ahmed al-Khateeb, a senior adviser to the Saudi Kingdom, recently visited the Grand Ethiopian Renaissance Dam (GERD) recently after concluding his productive meeting with Prime Minister Haile Mariam Desalegn.

Egyptians interpreted the stopover as a threat to their ‘national security’ and el-Sisi described the Saudi monarch, Salman Bin Abdelaziz, as a traitor. And pro-regime international print media followed suit and published the picture of the king with the head line ‘’ His Majesty the Traitor.’’ Some even went as far as intimidating the Saudis and other members of the Gulf States by avowing that ‘’if they were to invest in Ethiopia, their investment would be lost in the Nile ’’ and that ‘’the GERD will not last forever, a volcano might erupt at any time. So for those looking to invest billions of dollars in this project, your money might as well be going to waste.’’

But the fact of the matter is that, Saudi Arabia and the remaining Gulf States have been thrusting billions of dollars into the Egyptian economy not to mention the massive supply of oil for next to nothing. And yet, Egypt sided with Iran, the arch enemy of her sponsors, on the Syrian conflict. Clearly, Egypt has proved to be a double-dealer, untrustworthy and ungrateful to those that came to rescue her collapsing economy laden with huge amount of money. This is a typical behaviour of the dubious Egyptians which Ethiopia should take note of when discussing the construction of the GERD.

Through the media, el-Sisi has made clear his intentions to obliterate the GERD directly or through proxy organisations that he sponsors via Eritrea and directly. But at the same time he publically protested through his officials when he said  that ‘’ Addis Ababa knows well that Egypt has nothing to do with internal events in Ethiopia, but its attempts to involve Egypt’s name in the internal events it is going through will not be of use.’’ Academics and journalists close to el-Sisi and angered by the visit to GERD also threatened Saudi Arabia by uttering that ‘’ Egypt has many cards’’…..you will soon hear that we Egyptians have the capacity to intervene in the Gulf region’s affairs and provide support for the royals who oppose current Saudi policies.’’   

The thing is that Egypt is going through a major political, religious and economic melt-down and it isn’t in a position to bully Saudi Arabia and Ethiopia into submission. The Horn nation is simply utilizing its own resources to generate electricity for local consumption and export in order to raise enough revenues needed to significantly improve the lives of its citizens. Egypt has to accept the fact that it can’t stop Ethiopia from finishing this gigantic project and others in the pipeline come rain or shine. It is also not possible to scuttle Ethiopia’s rapidly growing economy and prevent the Horn nation from becoming its formidable regional rival.

Egypt also foolishly believes that by coming down hard on Ethiopia, the other upper riparian states (URS) intent on building dams of various magnitudes would be dissuaded from doing so. Ethiopia has to ensure that all URS speak in one voice in order to secure a better deal when they come to address The Nile Waters Agreement which was concluded in 1929 and amended in 1959 without their participation.

El-Sisi recently visited Uganda and has plans to see the Kenyan President. The aim of this is to isolate Ethiopia from the rest of URS and weaken her bargaining position, according to regional commentators. Sudan has been supportive of the building of the Grand Ethiopian Renaissance Dam and no doubt Egypt must be working secretly to remove President Omar al-Bashar and install a client regime in his place. Ethiopia should be aware of this possibility and make prior preparations to deal with its implications if this becomes a reality.

Bombing (or ‘volcano’ as the Egyptians call it) the GERD would simply intensify the resolve of the Ethiopian people and work intensively to disrupt the flow of the Blue Nile and adversely affect the lives of millions of Egyptians. And the only way it can stop this is by occupying Ethiopia which it can’t possibly execute because it doesn’t have the military might as well as the economic clout to sustain it where its domestic and external debts presently stand at $154.42 and $60.53 billion respectively( Reuters; 5/01/2017). Of course it can dangle few dollars on Eritrea to create mischief here and there, but nothing major. Sooner or later, the Eritrean dictator, who was summoned to Egypt recently, will have to choose between Egypt and Saudi Arabia as he can’t continue to solicit funds from two deadly enemies competing to control Eritrea. The likelihood is that the isolated and despised tyrant will ditch the bankrupt Egypt as he did to Iran and line-up behind the Saudis as this would guarantee the continuous flow of freshly minted Petro-dollars to be stashed away in Swiss banks’.

Some observers have predicted that the current situation in Egypt could evolve into a major revolt affecting the cohesion of the entire country. And what the Arab nation, which has been utilizing Blue Nile for drinking, generation of electricity and irrigation in Nile Delta, should do instead is to work hard to mitigate the acute destitution of its people and to prevent the country from tumbling into the hands of Islamist militants linked to ISIS. Egypt has fallen from grace in a humiliating way and the wise thing to do now is to accept its current lowly position within the Arab world and beyond, and stop making a fool of itself by striving to punch above its weight.