The Gaza Conflict and its Impact on Egypt: A Dual Challenge of Diplomacy and Economy

The war triggered by the October 7 Hamas attack on Israel has severely affected Egypt, straining its economy and demanding extensive diplomatic engagement. Although Egypt has played a crucial mediatory role, the conflict has led to significant revenue losses, particularly from the Suez Canal, while inflation has surged. Despite the challenges, financial aid from international organizations offers some economic stabilization.

The ongoing conflict ignited by the Hamas-led assault on Israel on October 7, 2023, has significantly impacted not only the residents of Gaza but also the neighboring nation of Egypt. The Egyptian government has been compelled to actively engage in diplomatic efforts to mitigate the crisis, which has simultaneously placed substantial strains on its economy while also facilitating some unexpected advantages. The conflict has resulted in an extensive amount of diplomatic endeavors, marked by numerous visits from representatives of various nations. Although mediation initiatives have not yielded successful resolutions, the diplomatic engagement has intensified, particularly with meetings spearheaded by the Cairo-based Arab League and consultations involving Egypt, Qatar, and the United States among others. Said Sadek, a distinguished professor specializing in peace studies and human rights at the Egypt-Japan University in Alexandria, emphasized Egypt’s pivotal role in mediating between Israel and Hamas. He articulated that the Egyptian involvement in such negotiations has occasionally been fruitful, yet unsuccessful at other times. “Politically (the conflict) highlighted the Egyptian role in being a moderating force in the Middle East,” he noted, reiterating that Egypt, alongside Qatar and the U.S., has consistently acted as an essential mediator in negotiations. Abbas Kamel, the head of Egyptian intelligence, has dedicated significant hours to mediation processes between the conflicting parties, as have U.S. Secretary of State Antony Blinken and Qatar’s Foreign Minister, Mohammed bin Abdulrahman bin Jassim al Thani. Economically, the Gaza conflict has inflicted severe damage on Egypt’s economy; however, it has also presented some advantages, according to Paul Sullivan, a Washington-based Middle East analyst. He remarked, “Egypt is being squeezed between many rocks and many hard places, with a few positive bits of light.” Such positive outcomes encompass increased financial support from the Gulf Cooperation Council (GCC), the International Monetary Fund (IMF), and the World Bank, aimed at stabilizing the Egyptian economy. It is essential to highlight that both Sadek and Sullivan concur that the Egyptian economy has encountered significant setbacks due to the ramifications of the Gaza conflict, particularly marked by a drastic decline in Suez Canal revenues, which constitute an essential income source for the government. “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. Now we are getting only $3 billion, so there is a big loss of 70%,” Sadek explained. Sullivan added further complications, noting that Egypt faces not only diminished revenue from the Suez Canal—attributable to ships rerouting around the Horn of Africa—but also a potential natural gas crisis should Israel decide to halt its gas exports to Egypt. Such a scenario would compel the Egyptian government to import natural gas at significantly escalated prices. The Egyptian populace is already feeling the pressure of these economic challenges. The government has increased the prices of petroleum and natural gas by approximately 15% on two occasions this year, contributing to an overall inflation rate that has reached an alarming 25%. Analysts attribute this surge primarily to the ongoing conflict in Gaza. Furthermore, tourism revenues have declined, exacerbated by warnings from various Western nations advising their citizens against traveling to Egypt and other Middle Eastern regions.

The Gaza conflict has persisted as a significant international issue, particularly following the recent attacks that occurred on October 7, 2023. The violence unleashed by the Hamas organization’s assault on Israel has not only affected the immediate region but has reverberated throughout neighboring states, particularly Egypt. Egypt is geographically and politically positioned to play a crucial role in mediating conflicts within the Middle East. The nation has historically engaged in such mediatory roles, supporting peace processes and fostering dialogue between conflicting parties. However, these diplomatic efforts are intertwined with the constant economic pressures and national stability challenges that Egypt faces, making the current situation particularly complex.

In conclusion, the recent Gaza conflict has had profound ramifications for both Gaza and Egypt, highlighting Egypt’s vital role in diplomatic mediation as well as the economic strains imposed by regional instability. While the Egyptian government is endeavoring to stabilize the economy amid decreasing revenues and rising inflation, its diplomatic efforts have been recognized internationally. The strife in Gaza stands as a critical point that not only challenges the affected regions but also reverberates beyond, influencing Egypt’s geopolitical and economic landscape.

Original Source: www.voanews.com