Egypt's Diminishing Strategic Leverage

Abstract

Egypt's Diminishing Strategic Leverage Gawdat Bahgat (bio) Egyptian civilization is one of the greatest and oldest in the world. The nation has maintained its geographical configuration for thousands of years and enjoys a strong national identity. The county is mentioned in the holy books of the three Abrahamic religions (i.e., Judaism, Christianity, and Islam). Its strategic location connects Africa, Asia, and Europe. Its population has always been the largest in the Arab world. Traditionally, its soft power has dominated the Arab world and indeed most of the Middle East. For generations, Egyptian culture (i.e., music, TV, movies, art, sport, education) has shaped Arab society. Given all these characteristics, Cairo has always been at the center of Arab/Middle Eastern affairs. With good justification, the Egyptians see themselves and are widely seen by their neighbors as the regional leaders. The Egyptian army is the largest in the Arab world. Not surprisingly, military and political analysts seek to understand where Cairo stands on any and all regional conflicts (e.g., Libya, Syria, Iraq, Yemen, war on terrorism). The Egyptian army fought Israel four times (1948, 1956, 1967, and 1973), and former President Anwar El-Sadat was the first Arab leader to make peace and sign a peace treaty with the Jewish state. Despite these impressive credentials, Egypt's strategic leverage has been diminishing in the last few decades. The country's hard power and soft power have been challenged by neighboring states. Despite political and military intervention, Cairo has not been able to bring the civil war in neighboring Libya to a successful conclusion. Turkey, Qatar, the United Arab Emirates (UAE), Russia, France, and Italy compete with Egypt over [End Page 1] influence in Libya. Within this rivalry, it is not clear who has the upper hand. Similarly in both Syria and Iraq, other regional and global powers have played a more decisive role than Egypt. For good reasons, President Abdel Fattah El-Sisi decided not to play an active role in the war in Yemen. Saudi Arabia, UAE, and Iran support opposing factions and accordingly, Cairo has little, if any, say in any future political settlement. Finally, Egyptian cultural dominance is being questioned. Egyptian movies and soap operas face strong competition from those produced in Lebanon, Turkey, and other Middle Eastern countries. This article argues that Egypt's strategic leverage (i.e., political, military, and cultural influence) has been waning mainly due to declining economic power and the growing gap between financial resources and political and leadership aspirations. Unlike oil and gas producing countries in the Persian Gulf, Egypt holds limited economic resources. Money does not make a regional power, but power cannot be projected without sufficient financial resources. The country does not hold massive oil and gas reserves. It has never been a major hydrocarbon exporter. Furthermore, the combination of limited natural resources and population explosion has made a bad situation worse. Egypt is not a large country, but its population has exceeded one hundred million people. Meeting the economic, food, and water needs of this large and growing population is a daunting challenge. Egypt produces only about one-third of the food it consumes and is the world's largest wheat importer. Like other countries, Egypt suffers from corruption and a lack of transparency. The limited economic and financial resources have been wasted on "white elephant" projects. Egypt ranks 117 out of 179 in the Corruption Perception Index.1 This article will examine the dire conditions of the Egyptian economy based on recent analyses from the World Bank, International Monetary Fund (IMF), and other national, regional and international institutions. More than almost all other Middle Eastern countries, Egyptian authorities have been able to avoid the huge economic setbacks inflicted by COVID-19. Indeed, both the World Bank and IMF have praised Cairo's economic performance. However, this relative success obscures major structural and deep-rooted challenges. [End Page 2] Egyptian Economy: An Overview Egypt's underlying economic potential stems from its young and growing population, its low-cost labor forces, a large domestic market, a particularly advantageous location at the confluence of three continents and global shipping routes, and untapped investment opportunities. Realizing this potential will...