Egypt hedges between the West, the Gulf, Iran and China
By Michael Hughes
Egypt is evidently seeking to establish an independent foreign policy after thirty years of doing America’s bidding. Next week President Mohamed Morsi will visit Beijing and Tehran in what many analysts are calling a strategic “pivot” away from the West and the oil-rich Gulf monarchies. However, Morsi is walking a tightrope considering Egypt faces a $12 billion financing shortfall, according to the U.S. State Department, and is in desperate need of Western and Gulf State cash.
In a recent L.A. Times piece, David Schenker and Christina Lin argue that, long-term, Egypt wants to “jettison” billions in Western foreign assistance. They also argue that Egypt’s rapprochement with Iran and outreach to Chinasignal a shift “rivaling the scope of President Anwar Sadat's expulsion of the Soviets in 1972 and subsequent reorientation to the West.”
Morsi’s visit to Tehran, the first by an Egyptian president since the 1979 Islamic revolution, seems deliberately provocative given the heightened tension surrounding Iran’s nuclear program.
It is also jarring given the context, because Morsi upon taking office indicated that he would “reassess” the 1979 peace accord between Egypt and Israel. Just recently Egypt deployed tanks to the Sinai region without prior consent, which irritated Jerusalem. Prime Minister Netanyahu had to work backchannels via the U.S. to get a message to Cairo to withdraw, claiming that the tank deployment violated the aforementioned peace treaty.
The timing couldn’t be better for Iran which is looking for a new friend in the region as it watches its chief ally, Syria, slowly meltdown amidst a burgeoning civil war. Not to mention that France is now calling for a “no-fly zone” which military experts say is tantamount to an act of war. Tehran, sensing that Assad’s days are numbered, needs Egypt more than ever to counterbalance U.S.-Saudi domination.
According to Townhall.com’s NightWatch column, Morsi’s presence at the Non-Aligned Movement (NAM) conference in Tehran on August 30 will be rich with symbolism, the type of which doesn’t bode well for the United States:
Mursi is doing exactly what he said he would do: change the balance in Egypt's foreign affairs. Mursi's attendance at the NAM summit almost seems to turn the clock back to the time when Egypt was a leader of the NAM, with Nasser as its Second Secretary General (1964-1970), and Iran was an American ally. The symbolism will not be lost on the Arabs.
But Morsi’s strategy comes with great risks, especially considering Egypt needs funding from the oil-rich Gulf States – Iran’s primary adversaries. Qatar has delivered around $500 million of $2 billion it has promised and Saudi Arabia promised to deposit $1.5 billion in Egypt’s Central Bank, according to the Associated Press.
However, this is where China enters into Morsi’s calculation. Egypt sees Beijing as a potential source of funding that could diminish reliance on the West and Arab monarchies. Trade between Egypt and China totaled $8.8 billion last year, up 40 per cent from 2008, according to the Egyptian Ministry of Commerce. During Morsi’s visit the two countries plan on signing a “cooperation agreement.”
Schenker and Lin posit that Egypt could provide China with a “foothold on the Mediterranean” and priority access to the Suez Canal “as the U.S. has traditionally been afforded.” They also write:
If Morsi gets his way, improved bilateral ties to Beijing will embolden, if not enable, Cairo to downgrade Egypt's ties to Washington. Of course, with the Muslim Brotherhood at the helm — and with increased domestic repression and unmitigated hostility toward Israel — this trajectory was perhaps inevitable.
Meanwhile, Egypt is bleeding economically and needs cash – from anyone. Earlier this week it formally asked the IMF for a $4.8 billion loan, but it will have to produce a plan for reducing its $23.6 billion deficit, which accounts for 8.7 percent of Egypt’s GDP.
Egypt will be forced to implement politically unpopular economic reforms, including reducing subsidies for fuel and food which could ignite social unrest. According to the AP, such sanctions will have an adverse impact on those living near or below the poverty line, which is currently about 40 percent of Egypt’s 82 million citizens.
Foreign direct investment and tourism have both dried up due to the political instability since Mubarak was ousted 18 months ago. Tourism fell by 30 percent in 2011 and is making a meager comeback. Egypt is praying that the IMF loan will provide a “seal of approval” that will bring back international investors.
Michael Hughes is a Washington D.C.-based journalist and foreign policy analyst whose work has appeared in CNN,The Huffington Post and Afghan Online Press. He has been cited as an expert in Reuters and the Middle East Policy Journal and has made several live appearances on RT News. He is also a strategist for the New World Strategies Coalition which develops nonmilitary solutions for Afghanistan. Mr. Hughes graduated from the University of Notre Dame with a history degree and is currently pursuing a Master's in Global Security Studies at Johns Hopkins University.