Egypt is a gift from the Nile

 "Throw the lucky man into the Nile and he will come out with a fish in his mouth', Egyptian proverb.

The Nilotic world is dominated by Egypt. This is due to its geographical location, its history, and the weight of its population (104,258,327 in 2021) being a central element of its regional strength. The social, economic and political challenges it faces are significant, but still manageable compared to the dire straits faced by neighbouring Sudan and South Sudan. However, Egypt may intensify conflict with its neighbours over Nile water coverage, and other countries may see water rights as contentious.

The Egyptian government is likely to maintain strong relations with Israel in order to contain insurgencies in the Sinai Peninsula. The economic coupling with Israel, while complementing the Gulf states, also means that war with Israel is highly unlikely in the medium to long term. Like most emerging markets, the COVID-19 pandemic has been a huge shock to the Egyptian economy. The consequences were immediately felt through a sudden halt in tourism, which at the onset of the crisis accounted for about 12% of GDP, 10% of employment and 4% of GDP in foreign exchange earnings. Precautionary measures to contain the spread of the virus, including partial closures and capacity restrictions in public venues, led to a temporary decline in activity, while the government budget was affected by the economic slowdown with falling tax revenues.

Political, economic and social indicators 2021

President of the Republic of Egypt: Abdel-Fattah al-Sisi

Prime Minister: Mostafa Kamal Madbuli

Capital: Cairo

Independence: 1922 from British rule

Nature of the regime: Republic with 27 governorates based on the Constitution adopted by referendum in January 2014 and amended in 2019. Presidential regime 

Population: 104,258,327 inhab.

International organisations: UN, AU, IMF, OIC, WTO, COMESA, Unesco, Arab League, CEN-SAD

Next presidential elections: 2022

Next legislative elections. 2025

Executive branch: The President is the head of state and supreme commander of the armed forces. He is elected for a six-year term. The President is the head of the executive and appoints the Prime Minister, who must be approved by a vote of confidence in Parliament. The President also appoints the head of the Council of Ministers. He can dissolve the Assembly and rule by decree.

In February 2019, Parliament voted to remove the two-term limit for the president, whose term was extended from four to six years.

Ten years after the 2011 revolution - and after the brief hiatus of the democratic election of President Mohamed Morsi between July 2012 and July 2013 - Egypt is led by President Al-Sisi, who may remain in power until 2030. The political and security situation in Egypt is marked by persistent jihadist activism, especially in Sinai. But no large-scale terrorist attacks have occurred since 2019. Egypt requested financial assistance from the IMF and the World Bank in 2016 to finance the government budget and implement a parallel set of reforms to strengthen public debt management. Population growth was, along with terrorism among the top two national security threats identified by President Al-Sisi at the 4th National Youth Conference in Alexandria on 24 July 2017.

Egypt receives military and financial assistance from the US and the EU for its key role in regional stability. The country relies heavily on political and financial support from the Gulf petro-monarchies (UAE, Saudi Arabia). On the other hand, political instability in Libya represents a near-risk factor for the Egyptian regime, which has chosen to support Marshal Haftar. This choice has strained relations with Turkey, with which there are also tensions over gas exploitation in the eastern Mediterranean. Finally, another factor of tension is the relationship with Ethiopia over the management of the waters of the Nile.

After recovering from the internal political crisis and revolutionary uprising of 2011, the Egyptian economy has recently slowed down due to the COVID-19 pandemic. According to IMF estimates, GDP growth fell from 5.6 per cent in 2019 to 3.6 per cent in 2020. Despite this slowdown, Egypt was one of the few countries to record a positive growth rate in 2020. According to the IMF's April 2021 forecast, GDP growth is expected to fall further to 2.5 per cent in 2021 and return to 5.7 per cent in 2022, provided there is a post-pandemic global economic recovery.  

Egypt is very stable politically, due to President Abdel Fattah al-Sisi's firm grip on power. There is almost no contestation outside the institutional space from the left and Islamists, due to the harsh punishments meted out to anyone who challenges the government. The political situation is stable, and there is no viable alternative to the current regime, which is heavily dominated by the military. Occasionally, an unjust sentence against an activist or journalist makes international headlines, but overall Egypt's foreign relations remain good and geopolitically strategic (largely because it is a good customer for Western governments that sell arms to it and because of the regional security it represents).

For several years now, the Rais has been pursuing a strategy aimed at restoring Cairo's diplomatic standing. Since the Arab Spring, and due to its own internal upheavals, Cairo has seen its regional weight reduced to the benefit of other powers. Abdel Fattah al-Sisi wants to place Egypt on the regional international chessboard by strengthening its relations with Saudi Arabia and avoiding possible tensions with the new American administration. 

For several years now, the Rais has been pursuing a strategy aimed at restoring Cairo's diplomatic standing. Since the Arab Spring, and due to its own internal upheavals, Cairo has seen its regional weight reduced to the benefit of other powers. Abdel Fattah al-Sisi wants to place Egypt on the regional international chessboard by strengthening its relations with Saudi Arabia and avoiding possible tensions with the new American administration. 

Cairo does not rule out intervening in Libya and is looking for allies to counter the Ethiopian dam project at the source of the Nile. For the government, it is a matter of putting itself back at the centre of the regional chessboard and reaffirming its status as a power, damaged by the consequences of the 2011 revolution. Although he does not publicly regret the fall of former president Hosni Mubarak, Al-Sisi regularly recalls that the turmoil that followed, with the election in 2012 of Islamist candidate Mohamed Morsi to the presidency - ousted by the army a year later - interrupted a promising dynamic both economically and geopolitically.  It is true that six months before the revolution, the World Bank, deliberately ignoring the recurrent social conflicts in the Nile Delta companies and the high level of inequality, considered Egypt to be among the 'best reformers in the world' thanks to a liberal-inspired modernisation plan. Diplomatically, the country was proud to be chosen by Barack Obama to deliver his 'New Beginnings' speech, which was to recast relations between the US and the entire Muslim world, at Cairo University on 4 June 2009, less than six months after his arrival at the White House. Domestically, this quest for greatness includes the launch of the "Map of the Future", which envisages several infrastructure projects, including a new city east of Cairo, and ten airports, pharaonic projects that, incidentally, benefit companies dependent on the army. At the international level, the instructions given to diplomacy are clear: the aim is not to lag behind the countries of the region, be they the Gulf monarchies, Turkey, Iran or even Israel. In Cairo, it is not forgotten that Joseph Biden was the vice president of an administration that supported Mubarak's forced resignation and temporarily suspended financial aid in autumn 2013 after the coup against President Morsi. In 2016, the Cairo press applauded Trump's election, and intellectual circles widely aired the unofficial thesis that the 'Arab spring' was a manipulation by the Central Intelligence Agency (CIA) and the Democratic Party to install Islamists in power. Al-Sisi can nevertheless count on the support of French President Emmanuel Macron, who discreetly awarded him the Grand Cross of the Legion of Honour during his visit to Paris in December last year. For Egypt, France is a very accommodating supplier of military hardware, with Emmanuel Macron himself refusing to make the partnership between the two countries conditional on respect for human rights.
 

But the top priority is undoubtedly the existential threat posed by the Renaissance mega-dam project in the Benishangul-Gumuz region on the Blue Nile in Ethiopia. Cairo fears that if the 145-metre high, 74 billion cubic metre capacity dam is filled too quickly, its agriculture will die.  As a "gift from the Nile", Egypt depends on the river for 98 per cent of its water needs. Ethiopia intends to use the Renaissance Dam to electrify the entire country. In the 1990s, Mubarak threatened to use his military aircraft if an agreement was not reached before work began. Twenty years later, negotiations have stalled: Ethiopia wants to fill the dam in seven years; Egypt demands that it be done in 21 years, with a right of control over the operation of the infrastructure. However, without waiting for an agreement, Addis Ababa has already started filling the dam. France and China, which are involved in the project, are strongly opposed to a military option, while advocating a diplomatic agreement that would guarantee Cairo's interests.  

Egypt could become a gas hub in the Mediterranean, the country's hydrocarbon reserves are limited. But the discovery of the Zohr field in the Mediterranean in 2015 enabled Egypt to become self-sufficient in gas in 2018 and a net gas exporter in 2019. The country wants to take advantage of its geographical position to become a gas trading platform. Its proximity to European LNG consuming countries such as Italy and Spain, its access to Asian markets through the Suez Canal, and its existing transport infrastructure could allow it to commercialise the exploitation of gas fields discovered off Israel and Cyprus. These countries do not have sufficiently high domestic demand, nor the pre-existing gas transportation infrastructure to exploit these resources on their own. However, Egypt's position as an exporter is not assured. In the absence of major new discoveries and the commissioning of new fields, it is possible that after 2023 Egypt will become a net importer of natural gas.

- Egypt is a net importer of petroleum products.

- Higher oil prices would increase the trade deficit and raise the cost of government subsidies to the population to maintain access to energy at low prices. 

-The country's gas export revenues are volatile: Egypt's status as a gas exporter is not secure in the long term. As I noted, in the absence of significant new discoveries and new fields coming on stream, it is possible that after 2023 Egypt will revert to being a net importer of natural gas.
 

Finally, what would be the country's energy strategy?

- Reduce oil imports and maintain the country's status as a net gas exporter after 2023.To this end, several tenders have been opened and others are in the pipeline to attract major international oil companies and support exploration and production of new fields.

- Egypt signed an agreement with Russia's state-owned Rosatom to build its first nuclear power plant in El Dabaa in the north of the country. The plant is scheduled to come on stream in 2026 and Rosatom will supply nuclear fuel for the 60-year lifetime of the facility.

- Making Egypt a regional electricity exporter

Objective: to generate export revenues. Egypt's electricity generation capacity currently exceeds the country's needs. Several interconnection projects are under development, including the Euro-African interconnection project linking Greece, Cyprus and Egypt via a 2,000 MW submarine cable.
 

These last 68 years explain Egypt's trajectory through the actions of its leaders; here is a summary of their profile and their political, military and economic environment.

If you open a history textbook on the second half of the 20th century, you will probably find a picture of Nasser, which is to say that Nasser was a figure of his time. It is true that he turned his country's history upside down by organising the coup d'état on 23 July 1952 and abolishing the monarchy.  Nasser should be given his place in the history of the second half of the 20th century. Nasser is the mirror of the Egyptian people with whom he shared an extraordinary communion, but he was more than that, his figure represents the aspirations of peoples emerging from a period of colonialism. His entry onto the scene was preceded by confrontations between British troops and the Egyptian population. London was not prepared to abandon Egypt under any circumstances, especially with Winston Churchill re-elected prime minister at the age of 77 after being defeated at the polls in 1945. The 1936 treaty allowing British troops to remain in the Suez Canal area was unilaterally abolished in 1951 by the Egyptian Parliament, but this did not prevent the British from remaining in the country and they were not prepared to abandon their presence there. Between October 1951 and January 1952, there were regular clashes in the Suez Canal area, in which Nasser participated to a greater or lesser extent. The first challenge for the new government in 1952 was therefore to resolve the issue of the British military base on the banks of the Suez Canal by getting the forces stationed there to leave Egypt. It was even imperative, if it was to acquire any legitimacy, to achieve a result where the monarchy had failed.

At this time, the Free Officers benefited from the benevolent attention of the new American administration that had come to power in early 1953. In 1954, an agreement was reached providing for the evacuation of British troops within 20 months. On 13 June 1956, the last British soldier left Egypt; 74 years had passed since the bombing of Alexandria and the landing of General Wolseley's troops. In the streets of Cairo, banners invited the passer-by to "raise his head because the days of humiliation are over". On 26 July 1956, in front of an ecstatic crowd listening to him as he commemorated the fourth anniversary of the ousting of King Farouk, Nasser proclaimed the nationalisation of the Suez Canal and claimed the benefits it brought for Egypt: the French and British-run Canal Company thus lost all rights to the usufruct of the Suez Canal. Then came the Suez Crisis and the Sinai War....

The British and French continued their offensive and took Port Said and Port Fuad, thus advancing on the Suez Canal. However, just as they were on the verge of final victory in the Canal, Eisenhower, aware of his victory at the American polls, and in view of the possible Soviet involvement in the conflict, decided to intervene directly. His message to the British and French governments was veiled, but clear and direct. For his part, Nasser gained worldwide fame. He was treated in his own country almost as a martyr, and he had also managed to get his way and keep the Suez Canal in Egyptian hands. Nine years after Nasser's death, his successor Anwar el Sadat signed a peace treaty with Israel, the first between an Arab country and the Hebrew state. President Abdel Fatah al-Sisi, who called Nasser a 'patriot', declared in an interview in 2018 that Egypt could not remain at war with Israel forever.

In common memory, he remains the man of peace. He was the first Arab head of state to visit Israel and the signatory of the famous Camp David Accords in 1978, after thirty years of conflict and four wars (1948, 1956, 1967, 1973) in which the Tsahal and the troops of its Arab neighbours, including the Egyptians, clashed. A character with many facets. Hawk turned dove, hero and then traitor for many Arabs, international pacifist, dictator in his own country? One of the most outstanding personalities of the 20th century, whose life was neither lacking in grandeur nor ambiguity. Nasser died of a heart attack in 1970. Anwar Sadat succeeded him as President of the Republic, for lack of a better candidate. All observers saw him as a man of transition. As is often the case, the observers were wrong. Against all odds, the man of the state apparatus became a warlord first. In October 1973, in agreement with his ally in Damascus, he took advantage of the fact that most of the Israeli soldiers, on leave, were celebrating Kippur with their families to attack the Jewish state from the west, while the Syrian army launched the assault from the north. Seeing its end, Israel pulled itself together and launched a counteroffensive that seemed like a miracle. The war stopped fairly quickly, only because the two great powers, the USSR and the United States, unwilling to end up in a global conflict because of a conflagration in the Middle East, dictated the end. The fact is that for the Arabs this Yom Kippur war is a victory that washes away the shame of 1967 and, thanks to it, Sadat "the bluff" becomes Sadat "the hero". He was now placed on an ideal pedestal to take on a new great role that no one had expected. In 1977, in front of a stunned Egyptian Parliament, and to the astonishment of the whole world, the man who, four years earlier, had launched his tanks towards the Sinai announced that he was ready to go to Israel to discuss peace. Israel signs its first peace treaty with an Arab neighbour in 1979. Egypt, in return, gets back the Sinai desert, with its precious deposits, including iron and oil. It also pockets, importantly, substantial annual US aid (which still lasts) to arm and equip its powerful army. For all Westerners, Sadat deserved this Nobel Peace Prize won in the wake of Camp David in duet with Begin. He is the brave man who broke the infernal cycle of wars with the tiny Hebrew state. But to the Arab world, he has become the traitor who abandoned the Palestinian cause - absent, in fact, from the signed treaty - and broke the precious Arab unity so celebrated and magnified in the Nasser era. The Islamists made him the man to kill. On 6 October 1981, during the traditional parade in Cairo commemorating the start of the Yom Kippur War, four soldiers belonging to a nebulous Muslim Brotherhood jump out of a truck and throw grenades in the direction of the official platform. Their leader, a young lieutenant, climbs into the truck and empties a magazine at the president, shouting: "I have killed the Pharaoh! A few hours later, the hospital where Sadat was rushed announces his death.

Hosni Mubarak had made it a priority to maintain and secure this peace at all costs with his Israeli neighbour, and this is probably one of the keys to his longevity in power.

He won the unwavering support of successive US administrations, which granted him an unexpected annual financial hand, making Egypt the second largest recipient of US foreign aid after Israel. For three decades, Hosni Mubarak will have spared the Arab world's largest country from war and disaster in a Middle East in permanent turmoil. But at home, political, social and economic stagnation plunged Egypt and its people into underdevelopment and poverty that grew by leaps and bounds. Egypt and its people suffered from corruption, oppression, and poor education. The protesters in Tahrir Square spoke with one voice about the government's corruption, its inability to provide public services, and the lack of opportunity in their country. Despite billions in US aid, unemployment and poverty increased as corruption plagued the country dominated by a class of new businessmen close to power. In the name of stability, Mubarak allowed his security services to systematically muzzle the opposition, persecuting the Muslim Brotherhood and suppressing any dissenting voices. At first, Mubarak built bridges, roads, a Cairo Metro. A sign was put up in the capital: "The Metro, a gift from Mubarak to his people". It was all there: a blissful paternalism, satisfying some and infuriating others. All this in a difficult socio-economic context. Every year 800,000 babies were born, how to cope? But the worst was elsewhere. In sclerosis, immobility, and lethargy. And the rise to power of a business clique demanding and obtaining a liberalisation of the economy. Egyptians are not fooled and shy away from the ballot box, which everyone knows is rigged, as in any dictatorship worthy of the name. The disconnection with the population is increasingly evident. An abyss. But perhaps this is not what precipitated the fall of 2011. Hosni Mubarak had abandoned the army in favour of businessmen. And the army did not forgive him. So, when part of the population rose up in January 2011, the army decided to do away with Mubarak, the opportunity was too good. 

The military's promises of democratisation to the protesters were unfounded, as subsequent events would show. The important thing was to get rid of a man, Hosni Mubarak, who was no longer loyal to them. Stability, security: this was Hosni Mubarak's mantra, like that of most dictators in the region, of whom he was certainly one of the "least bad". For all his faults, the Rais was far from having the viciousness of Hafez al-Asad, the cruelty of Saddam Hussein or the megalomania of Muammar Gaddafi. However, his attitude of grandeur should not obscure the fact that he established a permanent state of emergency in his country, using it to subdue both liberal and Islamist opposition.

The military establishment has long propagated (Nasser-El Sadat-Mubarak and now al-Sisi) a narrative to legitimise its role as the only institution capable of guaranteeing stability and order, placing itself above other state institutions as the guardian of the constitution and political stability. Al-Sisi justified the 2013 military coup by arguing that the constitution gives the military the authority to remove President Morsi and prosecute the Muslim Brotherhood because they threatened political stability and constitutional order.

Al-Sisi and the military like Mubarak before him have expanded control over the Egyptian economy, with vast business ownership across the country. The Egyptian military is at the head of the country's largest economic empire. Like other regimes in the Arab world or the Pasdaran in Iran, the military institution has enjoyed a broad economic base since the end of World War II, making it the country's largest employer.  The Egyptian military's economic power is a product of its history: it has been both the armed wing of the Nasserist project and a bulwark against the Israeli threat. Despite the lack of data and the secrecy surrounding this issue, for many researchers’ investment in civilian and military structures has become the cornerstone of the army's action since the Camp David Accords.

1. The Nile (Arabic: النيل, alnayl) is the largest river in Africa, flowing north through ten countries - Burundi, Rwanda, Tanzania, Uganda, Kenya, Democratic Republic of Congo, South Sudan, Sudan, Sudan, Egypt and Ethiopia - until it empties into the southeast corner of the Mediterranean, forming the great Nile Delta, on which the cities of Cairo and Alexandria are located. It is 6650 km long, the second longest river in the world after the Amazon.
2. https://www.africanews.com/2021/08/29/tourists-return-to-egypt-s-resorts-after-months-of-restrictions/
3. Egypt's high public debt and large gross financing needs - the amount of money the government needs to issue each year, both to roll over maturing loans and to finance new debt - make it vulnerable to external shocks, such as rising global borrowing costs.
4.  https://databank.worldbank.org/views/reports/reportwidget.aspx?Report_Name=CountryProfile&Id=b450fd57&tbar=y&dd=y&inf=n&zm=n&country=EGY
5.   It is worth recalling in this period the figure of Marshal Mohamed Tantawi who prevented a bloodbath in Egypt during the night of 10-11 February 2011, convincing President Hosni Mubarak of the need to step down. The complications came from his delay in calling elections and the resulting tendency culminated in a massacre in Tahir on 22nd November 2011 which left 33 dead (see obituary in ABC of 24th September 2021 by José Mª BALLESTER Esquivias).
6.   Read Habib Ayeb, " Qui captera les eaux du Nil ? ", Le Monde diplomatique, juillet 2013.
7.  Egypt and Sudan have signalled their readiness to resume talks with Ethiopia over their disputed Nile dam, after the UN Security Council urged the three governments to reach a binding agreement quickly. The Grand Ethiopian Renaissance Dam (GERD), which will be Africa's largest hydropower project when completed, has sparked a nearly decade-long diplomatic standoff between Ethiopia and downstream countries Egypt and Sudan. It is the largest hydroelectric structure ever built in Africa, ahead of Egypt's Aswan Dam. Recently, the UN Security Council adopted a statement encouraging the three countries to resume negotiations under the auspices of the African Union to rapidly conclude a binding agreement.
8.  The Egyptian Revolution of 1952 (Arabic: ثورة 23 يوليو 1952), also known as the 23 July Revolution, took place on 23 July 1952 and was carried out by the Free Officers Movement, a group of army officers led by Muhammad Naguib and Gamal Abdel Nasser. Initially set up to overthrow King Farouq, the movement had greater political ambitions, and soon implemented more far-reaching measures: it abolished the constitutional monarchy and aristocracy of Egypt and Sudan, proclaimed a republic, ended the British occupation of the country and declared the independence of Sudan (hitherto ruled as an Anglo-Egyptian condominium).
9.  The Free Officers Movement is the name given to the Egyptian military underground organisation founded by Gamal Abdel Nasser with Anwar el-Sadat and other officers after Egypt's defeat in the 1948 war with Israel and whose aim was to save the honour of the army and overthrow King Farouk I, whose rule was based on the support of the UK. In 1949 Nasser was appointed coordinator of the Movement, and in 1950 General Muhammad Naguib was chosen as the person who would become President of the Republic after the coup d'état, which actually took place on 23 July 1952.
10. The Israel Defence Forces (Hebrew: Tzava Hahagana LeYisrael, named by its acronym, Tzahal), is the generic name for the Israeli armed forces.
11.   Anthony Samrani, " Hosni Moubarak : le raïs jugé par son peuple ", L'Orient-Le Jour (Liban), 26 février 2020.
12.  Since its origin as an ideologically driven militia, the Army of the Guardians of the Islamic Revolution has played a major role in almost every aspect of Iranian society. Its expanded social, political, military and economic role under the administration of President Mahmoud Ahmadinejad, especially during the 2009 presidential elections, and the suppression of post-election protests have led many Western analysts to argue that its political power has surpassed even that of the country's Shiite clerical establishment.
13.  L'institution militaire égyptienne, l'entreprise la plus puissante du pays : https://nemrod-ecds.com/?p=1262