Wednesday,15 August, 2018
Current issue | Issue 1309, (25 - 31 August 2016)
Wednesday,15 August, 2018
Issue 1309, (25 - 31 August 2016)

Ahram Weekly

‘Back to normal’

Dina Ezzat assesses the likely fallout from cooling relations between Cairo and Riyadh and Abu Dhabi

Al-Ahram Weekly

“Egypt’s relations with the Gulf states, especially Saudi Arabia and the United Arab Emirates, are strong and stable. We are keen, and our brothers are also keen, on strengthening relations. What is not good, however, is that some people attempt to reduce these relations to the issue of assistance when this is not the case”.

This was the direct statement made by Egyptian President Abdel-Fattah Al-Sisi on speculation that growing tensions between Cairo and Riyadh and Abu Dhabi were marring relations.

Al-Sisi made this statement during an interview with the editors of the state-owned national dailies Al-Ahram, Al-Akhbar and Al-Gomhouriya. 

Al-Sisi’s comments were included in the first installment of the interview printed on Monday morning. No further details were included.

Additional insights have been offered by informed officials, speaking on condition of anonymity, into“the change of posture” that is affecting relations between Cairo and the two Arab capitals that offered political and financial support to Al-Sisi in the immediate wake of the ouster of Mohamed Morsi. 

The accounts offered by both Egyptian and foreign sources share one basic thread: Riyadh and Abu Dhabi are concerned about Cairo’s hesitation to pursue economic reforms despite the ultra-generous financial assistance they both offered to Egypt and the technical assistance they also volunteered.

Saudi “disappointment”, according to the same sources, is prompted by what some in the Saudi regime perceive as Cairo’s hesitation to offer reciprocal support. The Saudis are particularly bitter over the extent of military assistance received from Egypt in the war in Yemen and for its political schemes in Syria and Libya.

In his interview Al-Sisi addressed the issues in concise terms. On Syria and Libya he said that Egypt is calling for stability while keeping a close eye on the complexities and diverse views and interests that define the scene in both.

Concerned Egyptian diplomats have no hesitation in pointing out that Egypt is not in a position to send combat troops to Saudi Arabia — “not just because it is a quagmire we have been through before, in the 1960s and at a very high price, but also because of the obvious political and maybe even legal repercussions there”. Nor can Egypt condone the involvement of Islamist groups — especially those directly or indirectly associated with the Muslim Brotherhood — in Arab countries, particularly states like Syria and Libya which have strategic security implications for Egypt.

As for the controversy over the transfer of sovereignty of the Red Sea islands of Tiran and Sanafir to Saudi Arabia, an agreement signed during the visit of the Saudi monarch to Egypt earlier this year, Al-Sisi said: “We deal with this issue in the context of full respect to state institutions and [relevant] court rulings. We also have a parliament that represents the will of the people and that can address the matter thoroughly. I must also register appreciation to our brothers in Saudi Arabia for their full understanding of the matter and the relevant constitutional procedures.”

The announcement of the agreement to hand over the two islands caused a political crisis for the regime. The negotiations had been shrouded in secrecy and the public was taken unaware by the announcement. Protests were held when the news was made public, and legal challenges mounted that resulted in an Administrative Court ruling declaring the sovereign transfer null and void. The case is now before the Supreme Constitutional Court.

While acknowledging that the honeymoon between Cairo and Riyadh and Abu Dhabi which began with Morsi’s removal is now over — both Gulf countries are reducing their financial commitments to Egypt — sources insist the relationship remains of paramount interest to all concerned. It is not at all in the interest of Riyadh or the UAE to turn their backs completely on Egypt.

“Neither Gulf states can afford an outbreak of chaos in Egypt. Actually nobody in the region or beyond is willing to run that risk. It’s as simple as that,” claims one Egyptian diplomat.

Riyadh and Abu Dhabi have already decided to offer Egypt close to $4 billion — the money may be available in as little as two months — to help the government devalue the Egyptian pound, a necessary step if Egypt is to access the first tranche of a close to $12 billion loan from the International Monetary Fund (IMF).

“It is true they have said that this is the last large financial assistance that they will offer. It is also true that we are acting to move on and be spared the need for further assistance. But we are confident that in times of distress we can still call on them, not just because we are good friends but because we have common regional interests that supersede any bilateral disagreements,” says an Egyptian government source.

National Security and Gulf Council expert-researcher at Al-Ahram Centre for Political and Strategic Studies Eman Ragab agrees.

“The disagreements are there but so are common interests, top amongst which is to put a lid on the volume of regional influence that political Islamic group, like the Muslim Brotherhood have,” she says.

“When all is said and done the Saudis, even if they are disappointed with Egypt’s unwillingness to offer direct military help in Yemen or political support in Syria, don’t want Cairo to oppose Riyadh’s choices or act against Saudi schemes”.

For the UAE and Saudi Arabia, she adds, Egypt remains a shield against the “regime-changing experience” that has passed through other Arab countries in recent years.

At a time when the UAE is revising its investments in Egypt and the Saudis their donations “there are other elements of the bilateral relationship Egypt has with each of these countries that are moving ahead”. The UAE is counting on Egyptian expertise to upgrade the skills of its own army “and we have seen joint military manoeuvers between the armies of the two countries, something that never happened under Mubarak. In the meantime the Saudis still count on Egypt to come to the rescue should there be any security threat to their country.”

In short Ragab argues that though Cairo is less intimate than it was with both Riyadh and Abu Dhabi the overall volume of relations is still holding up.

“We could say that the high point is over and we are back to a normal pitch of relations.”

Ragab points out that the return to normality also applies to Qatar. “The Qatari ambassador is back in Cairo and the exchange of criticism between the two capitals has been largely suspended.”

Omar Al-Shenety, managing director of Multiple Investment Group, believes Egypt should have pursued “necessary economic reforms during the past three years when financial assistance from the Gulf was forthcoming”.

“It would have been less complicated on the internal front and it would have put the economy on its feet earlier, leaving Egypt less dependent on foreign aid, including aid from the Gulf.”

According to Al-Shenety, the volume of financial assistance Egypt received following the ouster of Morsi is “the most generous ever in the history of Egypt-Gulf relations”. 

Al-Shenety notes three key moments in Gulf aid to Egypt: the first followed the first Gulf war “and was essentially a debt write off”; the second followed the January Revolution when Qatar stepped in to provide assistance and the third, “about $30 billion”, came from the Saudis and the UAE following Morsi’s removal.

Arab Gulf sources say Cairo failed to make the best use of the assistance it was offered and that some in the Egyptian regime assumed the aid would continue indefinitely, with no strings attached.

“This was totally unrealistic. The objective was to help Egypt overcome its crisis in the wake of consecutive phases of instability rather than to make Egypt permanently dependent on assistance,” said one source in Abu Dhabi.

Al-Shenety agrees. The expectation, he says, was that Egypt would slowly but firmly pursue “economic and legislative reforms and political stability” necessary to attract foreign direct investment. “This was the purpose of the economic conference in Sharm El-Sheikh which convened with such high expectations. The expectations weren’t met for the simple reason the ground was never prepared.”

The delay, says Al-Shenety, has compounded the challenges ahead. 

So is Egypt up to them? And how will friends and allies in the Gulf act should the challenges prove too difficult for the current regime?

According to Western diplomats who regularly commute between Cairo and the Gulf there is considerable anticipation in Gulf capitals about the consequence of the measures the government in Egypt must inevitably adopt.

The consensus among these diplomats seems to be that in the short term, if push comes to shove, Gulf regimes will still reach out to lend Egypt a helping hand even if in a less forthcoming manner than three years ago, and this time with strings attached.

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