With war on its doorstep, Egypt faces a delicate balancing act

With war on its doorstep, Egypt faces a delicate balancing act | INFBusiness.com

The Egyptian government briefly designated Hamas as a terrorist organization in 2015, but this move was overturned by Egyptian courts (Photo: euobserver)

The ongoing Israel-Hamas war has had major political, economic, and security repercussions for Egypt, a country bordering both Gaza and Israel.

Cairo is struggling to keep its economy afloat while also facing the socioeconomic implications of the war in Gaza, such as disruptions in tourism and trade.

It is also bracing itself for a potential refugee influx in the event of an Israeli military offensive on the border town of Rafah, with the country’s foreign minister Sameh Shoukry recently calling on the US and its allies to increase pressure on Israel to deter such an attack.

For Cairo, balancing its support for the Palestinian cause with its national interests remains a difficult task.

Egypt’s foreign policy on Gaza

In Cairo, the Palestinian flag is everywhere. You can see it hoisted on flag posts, on cars, in the streets, and on windows. The visibility of the flag stands as a testament to the overwhelmingly pro-Palestinian public opinion in the country.

There have been regular pro-Palestinian rallies in Egypt, a country where spontaneous or organic demonstrations are increasingly met with violent dispersion by security forces under President Abdul Fattah el-Sisi, with critics accusing the government of staging controlled protests to tap into pro-Palestinian sentiment amid soaring inflation and rapidly deteriorating economic conditions.

Cairo is really careful to distinguish between its approach to the tidal wave of pro-Palestinian sentiment in the country and its stance on the Palestinian militant group Hamas, which is designated as a terrorist organisation by the US, the EU, the UK, and some of their allies.

Hamas shares roots with the Sunni Islamist Muslim Brotherhood organisation, whose presidential candidate, Mohamed Morsi swept into power at the height of the Arab Spring protests in 2013. Morsi’s rule was cut short by a coup led by the then-army chief, general el-Sisi.

In 2013, Egypt designated the Muslim Brotherhood as a terrorist organisation. The Egyptian government also briefly designated Hamas as a terrorist organisation in 2015, but this move was overturned by the Egyptian courts.

Egypt softened its tone against Hamas in 2017, following the group’s announcement that it was cutting ties with the Muslim Brotherhood. There was also limited cooperation between Egypt and Hamas, with indirect contributions from Israel, to combat the Islamic State (IS) group offshoot, Wilayat Sinai, based in the northern parts of the Sinai Peninsula.


Tourism is a crucial source of income for Egypt, and it makes up 12 percent of the country’s GDP. Since 2010, Egypt’s tourism industry has been hit by the 2011 Revolution, the 2013 Coup, the IS insurgency, and the Covid-19 pandemic. And today, the war in Gaza is threatening one of Egypt’s most vital sources of income.

According to tourism minister Ahmed Issa, the tourism industry declined in the final quarter of 2023 due to the breakout of the Israel-Hamas war. Some 3.6 million tourists visited Egypt between October and December 2023, 600,000 less than the 4.2 million predicted for that period. But figures have picked up in the first two months of 2024, amid a slowing down of Israeli military operations in Gaza.

The Iranian-backed Houthi rebels based in Yemen have been targeting shipping lanes in the Red Sea, disrupting global trade and causing ships to be diverted from the Suez Canal, a vital source of hard currency for Egypt. Egypt’s revenues from the Suez Canal reportedly took a 40 percent hit in October in comparison to the previous year.

In addition, Egypt’s Liquified Natural Gas (LNG) exports more than halved annually in the fourth quarter of 2023.

Egypt hosts one of two natural gas liquefaction plants in the region, importing natural gas and exporting LNG abroad, with European countries among its top buyers due to the EU’s pivot away from Russian hydrocarbon sources after its full-scale invasion of Ukraine in 2022.

Rafah offensive

A potential assault on Rafah, Gaza’s southernmost city bordering Egypt, was approved by Israel. Before the 7 October attack, Rafah was home to 280,000 people, but today, more than a million Palestinians are thought to be taking refuge in the border town.

Pro-Palestinian voices, human rights activists, and international organisations have been warning that a potential Israeli offensive on the city would lead to mass civilian casualties and could trigger a refugee crisis in Egypt.

A potential Israeli push into Rafah could also threaten the 1979 Peace Treaty between Israel and Egypt. Cairo has already threatened to nullify it if Israeli troops attack Rafah, which would lead to an increased military presence on both sides of the Egypt-Israel border.

Egypt is said to be building a buffer zone in territory bordering Gaza, possibly in preparation for a potential influx of refugees if Israel decides to storm Rafah. Satellite images show that more than 16 square kilometres have been cleared over the border, but Egyptian authorities have denied the claims, saying “no provisions” are being made for displaced Palestinians and the area is meant for a “logistical hub” for aid.

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Egypt’s Rafah border crossing is the main artery for vital humanitarian aid to Gaza. But despite facilitating international aid through Rafah, President Sisi and his government have been criticised for not opening Egypt’s borders to Palestinians seeking refuge.

The UN high commissioner for refugees Filippo Grandi has warned against any mass displacement of Palestinians from Gaza. Speaking at the Munich Security Conference in February about an exodus of Gazans into Egypt, he said: “[This is] something which would ruin the possibility of a two-state solution between Israel and the Palestinians”.

For his part, Israeli defence minister Yoav Gallant said that Israel has no intention of driving Palestinians to Egypt, while foreign minister Israel Katz has promised to coordinate with Egypt to ensure Cairo’s interests were taken into account.

During the initial days of the conflict, Egyptian president Sisi suggested that Israel could relocate Palestinian refugees to the Negev Desert in southern Israel.

Egypt as a mediator

The war has already caused tens of thousands of deaths in Gaza and 1,200 deaths in Israel (including the victims of the 7 October attacks). Most of Gaza’s 2.2 million population has been displaced.

The consequences of the war extend far beyond Gaza’s borders, affecting every nation in the region. And Egypt finds itself in the middle of regional instability.

Egypt has already hosted numerous rounds of talks between Israeli and Hamas representatives in Cairo in a bid to halt the fighting. The latest round, also attended by US and Qatari representatives, failed to produce a lasting ceasefire ahead of the Muslim holy month of Ramadan.

Nobody knows what the post-Hamas administration of Gaza will be like.

However, Egypt’s role as a mediator will be crucial in seeking a resolution to the conflict, despite Israel’s decision not to send delegates to talks in Cairo.

The stability of the Middle East relies on Israel finding common ground and pursuing constructive dialogue with the neighbouring Arab states.

Source: euobserver.com

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