Egypt finds a new political confidence

Egypt has slowly found a new pragmatic confidence in its regional dealings under the rule of President Abdul Fattah Al Sissi as it seeks to support stability and the region’s surviving nation states. It is nowhere near being the leader of the Arab world that it used to be, and this new regional political confidence is despite Egypt suffering serious economic problems and coping with an ongoing internal struggle against extremists, of which the terrible plane crash in Sinai is almost certain to turn out to be the latest example.

“At its core, Egypt has emerged as the region’s ultimate status-quo country focused on anti-militancy and rejecting regime change in all its forms and firmly wedded to Arab states’ territorial integrity and fixed borders,” says Michael Wahid Hanna of Century Foundation, writing in Foreign Affairs.

“Perhaps most interestingly, Egypt seems to have distanced itself from the Sunni-Shiite agenda that increasingly animates the Middle East’s conflicts. Despite long-standing animosity towards Iran, which shows no sign of diminishing, Egypt has actively pursued diplomacy with Tehran’s allies in Iraq and Syria. Al Sissi is showing that he cares far more about regional stability than sectarian allegiance”.

It is true that Al Sissi has shown that he is ready to work with both the US and Russia. He has already visited Moscow twice this year and his government is in talks with Russian companies about building a new nuclear reactor to help solve Egypt’s chronic energy problems.

This pragmatism was summarised by Nevine Khalil in Al Ahram Weekly when she said: “Egypt participates in the US-led campaign against Daesh (the self-proclaimed Islamic State of Iraq and the Levant); hosts talks between Syrian opposition groups to prepare for dialogue with Bashar Al Assad’s regime; approves the Russian military campaign in Syria targeting all armed groups fighting Al Assad; agrees with Iran that the Syrian people must choose their own leader and that Al Assad doesn’t have to step down immediately; takes part in the Saudi-led campaign in Yemen against Iranian proxies and sits at the table with everyone at the multilateral Vienna talks on Syria.”

Egypt may seem to change positions depending on the issue, but such shifts are easily explained by Cairo’s regional priorities: to maintain the integrity of statehood, stamp out terrorism regionally and promote negotiated settlements wherever possible ahead of military intervention, says Khalil.

Gulf friends

Al Sissi’s government enjoys close links with Saudi Arabia and the UAE, who regard Egypt as an essential bulwark against the chaos of civil war and sectarian conflict that has destroyed Iraq, Syria and Libya and threatens Yemen. Both Saudi Arabia and the UAE (along with Kuwait) put billions of dollars into the Egyptian system to try and stabilise its crumbling economy after the collapse of Mohammad Mursi’s government.

The three states maintain close relations as they take up the huge challenge of trying to preserve and rebuild the Arab world after the chaos of the civil wars that followed the revolutions of 2011. They all want to support stability where they can find people who can build it, which means General Haftar in Libya has the close attention of Egypt as does Al Assad in Syria — thanks to the lack of any other alternative and Egypt’s visceral hatred of Islamists.

Egypt’s political confidence is helped by the country getting better economic ratings than it has been used to. For decades its sclerotic bureaucracy stifled any liberalisation, and continued to operate a state-led and state dominated economy with ample opportunities for all parts of the connected establishment to benefit.

Al Sissi has been slow to tackle this complex issue, and shows little signs of focusing on where to start, while concentrating on large projects like digging the new section of a parallel Suez Canal in record time, which may increase revenues but has not done much for Egypt’s mass unemployment.

Nonetheless, the International Monetary Fund (IMF) gave Egypt a cautious vote of approval in 2015, which is a vast improvement on previous years wracked by endless political change and chaos. “Following four years of political uncertainty and economic slowdown, Egypt has chosen a path of adjustment and reform which, if followed resolutely, will lead to economic stability and growth”, the IMF said in its first comprehensive assessment of the North African nation’s economy since 2010.

Speaking to IMF Survey, IMF mission chief for Egypt, Christopher Jarvis, noted Egypt’s challenges as putting its fiscal and external accounts in order to restore macroeconomic stability while at the same time improve living standards for its growing population. Jarvis considers it fortunate that some of the same macroeconomic policies geared towards reducing the fiscal and external vulnerabilities will also help boost growth and jobs and reduce poverty.

The IMF’s optimism is balanced by scepticism from people like Ziad Bahaa Al Deen, a former Egyptian minister and economist, who says: “The deeper problems in the management of the economy are weak levels of investment, exports and employment and the rise in both internal and external public debt. The most important of these problems, though, is the government’s lack of clarity in its economic policy and the direction it intends to pursue.”