James M. Dorsey

Palestine is a double-edged sword for Egyptian President Al-Sisi

Credit: Tamar

There’s a silver lining for Egypt in the Gaza war.

Egyptian general-turned-president Abdel Fattah Al-Sisi, much like his predecessors, would like the Israeli-Palestinian conflict to be a lightning rod that distracts from mounting frustration and anger at his regime.

To be sure, Mr. Al-Sisi has to tread carefully. Allowing differences with Israel to escalate to shore up his domestic standing could risk US aid, a US$8-billion International Monetary Fund (IMF) loan, and a similar-sized European aid package.

So would suspending Egypt’s deeply unpopular peace agreement with Israel, escalating the dispute over Israel’s takeover of the Rafah Crossing by demanding arbitration under the Camp David Accords, or taking the issue to the United Nations Security Council.

Unlike Jordan, Mr. Al-Sisi has also refrained from withdrawing his ambassador to Israel because that would jeopardise Egypt’s role in stalled Gaza ceasefire negotiations.

Egyptian intelligence chief General Abbas Kamel reportedly spoke by phone this weekend with  Hamas political leader Ismail Haniyeh as part of a US-Egyptian-Qatari effort to get the talks back on track.

For Mr. Al-Sisi it’s a balancing act. He would like to keep public anger at Israel bubbling at the surface while ensuring that it does not generate the kind of popular pressure to escalate differences with Israel that would force him to take steps he has so far evaded or threaten his regime.

That hasn’t stopped Mr. Al-Sisi from cautiously reviving the Palestinian lightning rod that Egypt and other Arab states discarded in the wake of the 2011 popular Arab revolts. It’s a risky move.

On the one hand, the government has banned anti-Israel demonstrations after state-sanctioned protests spun out of control in October when protesters took the government to task for its faltering economic policy.

Since then, authorities arrested at least 125 people, 95 of whom are being held in pre-trial detention on charges including membership of a banned group or spreading false news.

Several more students were detained in May for promoting pro-Palestinian boycotts and solidarity campaigns.

On the other hand, Mr. Al-Sisi has an advantage over other Arab states, like Algeria, whose leaders have also mismanaged the economy, failed to deliver public service and goods, and fight corruption.

Mr. Al-Sisi can credibly blame the Israeli boogeyman for some of his country’s woes. He can do so because of Egypt’s geographic proximity to Israel and economic ties to the Jewish state, particularly in energy.

This week, Prime Minister Mostafa Madbouly, apologising for repeated power outages that last in urban centers up to four hours and in rural areas up to 12 hours a day, blamed the interruptions on a halt in the gas flow from a “neighboring state,” a reference to Israel.

Egypt has suffered outages for the past year, blaming them on heatwaves and the need to prioritise exports to remedy a dollar crunch that has afflicted the economy since 2022.

“We were forced to stop the operation of a few power stations, otherwise they would have been destroyed one by one,” Mr. Madbouly said.

Egypt imports 800 million cubic feet of gas per day from Israel’s offshore Tamar gas field, some of which is liquified in Egypt and exported to Europe as LNG.

Mr. Madbouly was correct in his assertion. Tamar’s production was interrupted twice last October and suffered a 10-day outage between 27 May and 5 June, which hit Egypt hard.

That didn’t make laying the blame at Israel’s doorstep any less convenient politically as Egypt struggles economically.

In March, the government devalued the Egyptian pound and allowed market forces to set its exchange rate. This was the Egyptian pound’s fifth devaluation in two years. The devaluation lowered inflation from 31 per cent in March to 28.10 per cent in May.

The floating of the pound secured an expansion from US$3 billion to US$8 billion of Egypt’s International Monetary Fund bailout loan, making the North African country one of the IMF’s highest borrowers.

It also persuaded the European Union to help Egypt tackle its staggering shortage of foreign currency with a US$8 billion package over the next three years. This weekend, senior officials, Including Mr. Al-Sisi and European Commission President Ursula von der Leyen, discussed the implementation of the package at an investment conference in Cairo.

Hard hit by the wars in Gaza and Ukraine, Egypt has suffered from a loss of tourism, significantly reduced Suez Canal shipping revenues because of Yemeni Houthi attacks on commercial vessels in the Red Sea, rising wheat prices in the wake of the Ukraine war, and economic mismanagement, including investment in megaprojects such as a US$58 billion new desert capital, and granting military-owned enterprises preferential treatment and an oversized stake in the economy.

Egypt’s economic woes and Mr. Madbouly’s apology did little to counter harsh criticism on social media.

Seemingly addressing the government on X, formerly Twitter, Nasser Amin, an international criminal lawyer and activist, thundered, “You are failures and criminals. This issue of cutting off electricity is the theft of people’s money, the destruction of homes, the destruction of the national product, and a waste of the economy. If you were respectable, admit that you have ruined the country.”

In a letter to Mr. Madbouly posted on X, popular journalist Lamis El-Hadidi didn’t mince her words.

“Don’t say that all the money went to pay off debts! Because we didn’t pay off all the debts of foreign oil companies, this is one of the reasons for the gas shortage. Where did the money go? We want an answer. This is our right. Why didn’t you have any plan for the gas shortage in the first place? And stop with the story of the sudden heat wave because you cut off the electricity in the heat and cold,” Ms. El-Hadidi said.

Prominent Egyptian journalist, photographer, activist, and author of a weekly newsletter Hossam el-Hamalawy suggested that Mr. Al-Sisi may be fighting an uphill battle in exploiting anti-Israeli sentiment to his advantage and preventing it from becoming a stick with which to attack him.

“The Palestinian cause has always been a politicizing factor for Egyptian youth across generations… The more this war (in Gaza) drags on, the more likely it is that something might happen,” Mr. El-Hamalawy said.

About the Author
Dr. James M. Dorsey is an award-winning journalist and scholar and an Adjunct Senior Fellow at Singapore's S. Rajaratnam School of International Studies. He is the author of The Turbulent World of Middle East Soccer.
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