Impact of the Year-Long Gaza Conflict on Egypt
The ongoing Gaza conflict has severely impacted Egypt, creating diplomatic challenges and economic strain while revealing its intermediary role. Although Egypt faces a substantial decrease in Suez Canal revenue and rising inflation, it also receives financial support from international bodies aimed at stabilizing its economy.
The ongoing conflict in Gaza, ignited by the Hamas-led assault on Israel on October 7, 2023, has profoundly affected not only the inhabitants of Gaza but has also significantly impacted neighboring Egypt. The Egyptian government faces multiple challenges, including heightened diplomatic engagement and strain on its economic stability, though certain positive aspects have emerged as well. The war has triggered extensive diplomatic initiatives, characterized by numerous visits from international envoys. Despite Egypt’s active role in mediating between Hamas and Israel, these efforts have yielded mixed outcomes. As noted by Said Sadek, a professor of peace studies and human rights at the Egypt-Japan University in Alexandria, Egypt’s involvement has been pivotal in facilitating dialogue. “Politically, the conflict highlighted the Egyptian role in being a moderating force in the Middle East,” he stated. Egypt’s intelligence chief, Abbas Kamel, alongside U.S. Secretary of State Antony Blinken and Qatar’s foreign minister, have dedicated substantial time to mediation within this complex landscape. Economically, the ramifications of the Gaza conflict have been noticeable, with both detrimental effects and unexpected benefits. Analyst Paul Sullivan highlighted that despite Egypt facing significant economic pressure, it has also experienced monetary influxes from entities such as the Gulf Cooperation Council (GCC), the International Monetary Fund (IMF), and the World Bank to assist in stabilizing its financial situation. Both Sadek and Sullivan pointed to significant economic drawbacks, particularly regarding revenue from the Suez Canal, Egypt’s primary income source, which has seen a considerable decline. “The (Houthis) in Yemen blocked safe navigation across the Red Sea and that affected the Suez Canal that used to bring Egypt about $10 billion dollars,” Sadek explained. With current earnings plummeting to roughly $3 billion, the loss amounts to approximately 70%. Furthermore, Sullivan cautioned that Egypt could face a natural gas shortage should Israel halt its gas exports to Egypt, compelling the Egyptian government to seek imports at elevated costs. Economic hardships are already manifesting, as the government has raised petroleum and natural gas prices up to 15% this year, resulting in an overall inflation rate reaching 25%. Analysts attribute this inflation surge predominantly to the Gaza conflict’s fallout. In addition, tourism revenues are in decline as advisories from Western countries warn their citizens against traveling to Egypt and other Middle Eastern destinations.
This article examines the repercussions of the recent Gaza conflict on neighboring Egypt since the hostilities reignited following a Hamas attack on Israel in early October 2023. With a focus on both the diplomatic and economic dimensions, it reflects on Egypt’s crucial role in mediation efforts and the broader socio-economic challenges faced due to the conflict. The information presented sheds light on the multifaceted impacts of prolonged regional instability on nations involved directly or indirectly in the conflict.
In summary, the Gaza conflict has exerted significant pressure on Egypt, demanding intensive diplomatic engagement while exposing vulnerabilities in its economy. While the country grapples with economic setbacks, including a drastic reduction in Suez Canal revenues and rising inflation, some positive financial support has been apparent. Despite these challenges, Egypt remains a critical mediator in the Middle East, navigating a complex political landscape with both difficulties and opportunities.
Original Source: www.voanews.com
