The Gaza conflict, triggered by a Hamas attack in October 2023, has severely impacted Egypt’s economy and diplomatic engagement, highlighting its mediating role in the region. Egypt faces significant economic setbacks, including a 70% revenue drop from the Suez Canal and rising inflation, but benefits from international financial support that aims to stabilize its struggling economy.
The ongoing conflict in Gaza, ignited by Hamas’ assault on Israel on October 7, 2023, has extended its ramifications beyond the borders of Gaza, notably impacting neighboring Egypt. This strife has resulted in an increased burden on Egyptian officials and has placed significant strain on the Egyptian economy; however, it has also yielded certain advantages. Egyptian diplomacy has been notably active throughout this crisis, with various envoys from different nations making numerous visits to Cairo. Although mediation attempts have not achieved lasting peace, these diplomatic engagements have kept Egyptian officials occupied, involving sessions under the auspices of the Cairo-based Arab League as well as discussions with key players such as Egypt, Qatar, and the United States. According to Said Sadek, a professor of peace studies and human rights at Egypt-Japan University in Alexandria, Egypt has played a pivotal role in mediating between Israel and Hamas. He noted that while Egypt has experienced both successful and unsuccessful efforts in these negotiations, its involvement underscores Egypt’s significance as a stabilizing force in the Middle East. “In all the negotiations that took place later on between Hamas and Israel, they always needed a mediator, and it was Egypt and Qatar and the United States,” he stated. Abbas Kamel, head of Egyptian intelligence, has dedicated extensive time to mediating talks between the conflicting parties, alongside U.S. Secretary of State Antony Blinken and Qatar’s foreign minister, Mohammed bin Abdulrahman bin Jassim al Thani. Economically, the repercussions of the Gaza conflict have been particularly severe for Egypt. The insights provided by Paul Sullivan, a Washington-based Middle East analyst, highlight the duality of challenges and silver linings faced by Egypt. “Egypt is being squeezed between many rocks and many hard places, with a few positive bits of light,” he remarked, noting that financial assistance from the Gulf Cooperation Council (GCC), the International Monetary Fund (IMF), and the World Bank are contributing to a more favorable economic stabilization. Despite these financial flows, Sadek pointed out that the Egyptian economy has experienced substantial setbacks due to the conflict. Revenue from the Suez Canal, a critical income source, has plummeted as a result of the Yemeni Houthis blocking safe passage across the Red Sea, leading to a dramatic decline from approximately $10 billion to only $3 billion—a staggering loss of 70%. Moreover, Sullivan warned of impending challenges, such as a potential natural gas shortage should Israel halt its exports to Egypt, consequently forcing Egypt to procure natural gas at significantly higher market rates. The Egyptian populace is already feeling the effects of these economic strains. The government executed two price hikes this year for petroleum and natural gas, each by 15%. The overall inflation rate in Egypt has surged to 25%, a trend the analysts attribute principally to the ongoing conflict in Gaza. Additionally, the tourism sector is grappling with decreased revenue as Western nations issue advisories discouraging travel to Egypt and other areas in the Middle East.
The Gaza conflict underscores the intricate geopolitical dynamics in the region and highlights Egypt’s role in mediating tensions between Israel and Hamas. This crisis has elicited intense diplomatic engagement, implicating nations such as Egypt, Qatar, and the United States while dramatically affecting economic conditions within Egypt. As nations continue to respond to this conflict, understanding its implications on foreign relations and local economies is essential to comprehending the broader regional instability.
In summary, the conflict in Gaza significantly affects both the political landscape and economic conditions of Egypt. Diplomatic efforts underscore Egypt’s role as a key mediator, while the negative economic impacts—especially those related to the Suez Canal revenues and inflation—raise concerns about the resilience of the Egyptian economy. Despite the challenges, the country also benefits from international financial support aimed at stabilizing its economy during this tumultuous period.
Original Source: www.voanews.com
