Since a July 2013 military coup, Egypt has sought to reassert state authority undermined by the 2011 uprising at the expense of political inclusion, especially of the Muslim Brotherhood. The resulting polarisation has encouraged mounting political violence from the Islamic State (ISIS) and other violent groups, particularly in the Sinai Peninsula where a low-level insurgency has raged. In the Nile Valley, in 2017, ISIS has targeted the Coptic Christian minority, while al-Qaeda affiliates and other groups tied to the Brotherhood have targeted security forces. Crisis Group is urging the government to be more inclusive and address widespread violations of human and political rights, especially ahead of presidential elections scheduled for May 2018, to better address security and economic challenges.
The Egyptian economy is under increasing strain, with the Gaza war’s effects adding to the pressure. In this excerpt from the Watch List 2024, Crisis Group identifies ways the EU can support Egypt in coping with its economic woes.
Cairo continued to warn Israel against a possible ground invasion in Rafah and secured major financial deals with IMF, EU and World Bank.
Egypt pursued high-level diplomacy to prevent attack on Gaza’s Rafah city. President Sisi 13 March met Dutch PM Mark Rutte, in subsequent press conference warned Israel against launching ground invasion in Rafah, said it would threaten lives of more than a million Palestinians; 15 March, said that Egypt was working to reach ceasefire in Gaza, increase aid and allow for displaced people to return home. While threat of immediate invasion of Rafah seems to have temporarily receded, despite Israel’s repeated warnings that it might soon happen, authorities continue to worry about potential consequences of all-out attack for domestic stability and Sinai, due to possible forced displacement of Palestinian refugees.
Major financial foreign deals helped stabilise economic outlook. PM Mostafa Madbouly 6 March unveiled a new deal with International Monetary Fund (IMF), which agreed to $8 billion loan, in return for floating currency, spending cuts and levelling playing field between public and private sector firms. Announcement took place on same day as authorities let Egyptian pound float, triggering devaluation of official exchange rate from around 30 to the dollar to around 50 to the dollar. European delegation led by Ursula von der Leyen 17 March visited capital Cairo, presented EU financial support package worth $7.4 billion to support country’s green and digital transitions, investment in various other areas and, most importantly, migration control. World Bank 18 March confirmed deblocking $6 billion lending package to support country. Ratings agency S&P next day upgraded Egypt outlook from stable to positive.
In other important developments. Egyptian Foreign Minister Sameh Shoukry 5 March met Somali Foreign Minister Ali Mohamed Omar in Cairo, re-affirmed Egypt’s support for Somalia’s stance against Ethiopia’s deal with Somaliland on red sea access. Shoukry 18 March met with U.S. Special Envoy to Sudan Tom Perriello in Cairo, highlighted country’s diplomatic efforts through neighbouring countries and other channels to promote de-escalation, secure sustainable ceasefire, and support Sudan’s unity.
[Egypt] cannot live with the permanent displacement of Palestinians into the Sinai Peninsula, the Gaza war’s crippling economic effects and risks of regional war.
Things have been very tense [on Gaza's border with Egypt], but there are limits to how far these tensions can go on a strategic level.
If the war goes the way it’s been going, the border between Egypt and Gaza will come under immense pressure. Reality might have a say then.
This week on The Horn, Alan talks with Michael Wahid Hanna, Crisis Group’s U.S. Program director, about the role of Egypt in Sudan’s war and how it might shape future relations between the two neighbouring countries and Cairo’s regional diplomacy.
Egypt faces an economic crisis that risks fuelling unrest. The International Monetary Fund demands reforms in return for loans, while the authorities seek to broaden their base through a much-criticised national dialogue. Foreign partners should cautiously support this balancing act to enhance the country’s stability.
The conflict in Egypt’s Sinai offers insights into U.S. foreign policy priorities. As part of our series The Legacy of 9/11 and the “War on Terror”, Michael Wahid Hanna argues Cairo has used the jihadist spectre to scare off critics and keep U.S. military aid flowing.
This week on The Horn, Alan and William Davison, Crisis Group's Senior Analyst for Ethiopia, discuss Ethiopia's plans to start filling the massive dam it is building, including the complex dynamics at play, negotiations, and the parties' various concerns.
With rains swelling the Blue Nile, Ethiopia is just weeks away from beginning to fill the massive dam it is building. Egypt and Sudan demand that it not do so without an agreement. All three countries urgently need to make concessions for a deal.
Ethiopia and Egypt are in a heated standoff over a dam the former is building on the Blue Nile. To buy time for reaching a comprehensive settlement, the parties should agree on an interim fix covering the first two years of filling the dam’s reservoir.
Receive the best source of conflict analysis right in your inbox.
This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. Review our privacy policy for more details.