Michele Dunne, Senior Associate at the Carnegie Endowment for International Peace.
Two major factors will likely shape Abdel Fattah el-Sisi’s foreign policies in the short term. The first is his fight against the Muslim Brotherhood as well as extremist groups based in the Sinai, and the second is an unprecedented economic dependence on Saudi Arabia. The two factors are linked, due to a convergence of interests between the Egyptian military and the Gulf states. Sisi needs the Gulf’s financial support to strengthen Egypt’s faltering economy and bolster his position vis-à-vis the Brotherhood. The Gulf needs Sisi to defeat the Brotherhood, hoping that will stave off political agitation by Brotherhood-affiliated groups in their own countries.
Egypt has relied increasingly on Gulf economic assistance since the 2011 uprising, as the government spent its reserves in order to sustain high social spending and support the Egyptian currency amid the political turmoil that followed Mubarak’s removal. In the first 18 months of the transition, during which the Supreme Council of the Armed Forces (SCAF) held control, Egypt received only about $2.3 billion in assistance from Gulf States (Saudi Arabia, Qatar, Kuwait) despite pledges of at least $7 billion. During the Morsi presidency, Qatar stepped up to provide some $8 billion in grants and soft loans, a fact that provoked widespread concern and satire in Egypt about dependence on Gulf assistance.
Since Morsi’s ouster in July 2013, Qatar is out as Egypt’s patron, and Saudi Arabia, the UAE, and Kuwait are very much in, a trend that seems likely to accelerate during a Sisi presidency. By early 2014, the military-backed government had received some $12 billion in various forms of assistance (including cash, petroleum, projects, and Central Bank deposits to support the Egyptian pound) from the three countries, with much more expected to arrive soon. In fact, the key initiatives of Sisi’s campaign to emerge so far are Gulf-financed economic megaprojects (one in housing, another in development of the Suez Canal zone) with extensive military involvement. There is every indication that Sisi will continue to depend on infusions of cash and/or energy of roughly $2 billion per month from the Gulf in order to keep his government afloat and minimize the country’s ongoing energy crisis.
So, how will President Sisi’s heavy and unprecedented dependence on Gulf assistance affect his foreign policies?
Already there has been one indication that Cairo will not be able to stray far from policy lines delineated by Riyadh while this high level of economic dependence continues. When Sisi first deposed Morsi, the transitional government quickly moved away from Morsi’s support for the Syrian revolution and adopted a different approach, saying it would no longer support “jihad” in Syria and notably targeting Syrian refugees in Egypt as potentially dangerous subversives. By the time of the Arab summit in March 2014, the Egyptian government quietly brought its position on Syria more into line with its Gulf allies, noting its ongoing “contacts” with the Syrian opposition and the Gulf states.
The great unknown about Egyptian foreign policy remains whether relations with the United States will deteriorate, limp along, or strengthen during a Sisi presidency. The United States has its reservations about Egypt’s current course but would like to find a way to sustain relations, and Sisi presumably would like to restore suspended U.S. military assistance in order to keep his generals happy. But Saudi Arabia not only offered to replace U.S. military assistance but apparently also to finance arms purchased from Russia. Thus Egypt is becoming a pawn in the tense relations among Washington, Moscow, and Riyadh.
In his brief speech announcing his presidential bid, Sisi sounded well-worn themes about foreign policy including the need to restore Egypt’s “strength, power, and influence” in the world and its rejection of foreign meddling (“Egypt is not a playground for any internal, regional, or international party and it never will be”). But in a moment of candor, he also hinted that this high level of dependence on the Gulf cannot and should not be sustained, saying, “Egypt is a country rich in its resources and people, yet it relies on donations and assistance. This is not acceptable…”
It remains to be seen whether Sisi will undertake the internal reconciliation and courageous political and economic decisions that would allow Egypt to move beyond such dependence.