Egypt and the Gaza – Hamas War
Why Egypt probably turned a blind eye to increased weapons smuggling to Gaza, and how this war may benefit its economy.
American Incompetence
Egypt’s relationship with the United States started fraying in the days of President George W Bush and President Hosni Mubarak. The US, for ideological reasons and in response to the attacks of 11 September 2001, wanted Egypt to become more democratic. So, Egypt permitted fairer than usual elections in 2005. Those elections those demonstrated that the Muslim Brotherhood – Hamas’ parent organisation – would win any truly fair elections. The US did not relent. Under President Barack Obama, the US supported the 2011 uprising against Mubarak, leading to his overthrow and the Muslim Brotherhood’s takeover of the state. In the end, the Egyptian Army stepped in during 2013 and removed the Muslim Brotherhood. The US under Obama, and the American Congress, criticised Egypt, suspended some aid and then accepted the new regime. President Sisi, who led the overthrow of the Muslim Brotherhood, was embraced by President Trump, much to American media’s chagrin. These episodes demonstrated to the Egyptian leadership that the US could not be relied on. The US supported a Muslim Brotherhood takeover of Egypt, which could have led to the purging of the Egyptian military due to its cooperation with Israel, and even to a war with Israel, which could have wrecked the Egyptian army. For Egypt’s military leadership, the US showed itself to be capricious and reckless.
Economic Hubris
Since then, Egypt has been unhappy about American, Emirati and Israeli plans to ship oil via a pipeline from Ashkelon to Eilat, bypassing the Suez Canal, and establishing an economic corridor linking Europe to India via Israel, Saudi Arabia and the UAE, again bypassing the Suez. Egypt had been investing heavily in developing the Suez Canal’s environs as an economic zone that would boost Foreign Direct Investment in Egypt and create jobs. Therefore, the plans backed by Israel and the US went directly against its interests. Suez Canal revenues are Egypt’s second or third source of foreign currency, after tourism and energy exports, and, unlike the other two, they are far more predictable and reliable.
Egypt and Gaza
Egypt has no interest in the situation in Gaza being resolved. It does not want Israel to be victorious, for two reasons. First, it does not want to host another two million resentful and angry Palestinians who may destabilise it politically. Second, it does not want to have its role as an interlocuter between the US, Israel and militant factions undermined, as that would mean it has less influence over US policy. This is doubly so given how much disregard Israel and the US are showing to core Egyptian national security interests, as discussed above. As such, Egypt is pushing for humanitarian aid to enter Gaza, refusing the entry of Palestinian refugees into its territories, and coordinating with other Arab countries to place pressure on Israel to end this campaign. This pressure will intensify as the humanitarian costs of Israel’s campaign on Gaza becomes more evident.
The Tunnels
More important in analysing this war, and the dramatic increase in Hamas’ capabilities, is what Egypt did before the war. Egypt controls the trade that goes into Gaza. This includes legal trade via recognised crossings, and illegal trade, over which Egyptian intelligence officers have a large influence. Egypt had previously demolished most houses in Rafah that were too close to the Egyptian border with Gaza, as they typically hosted illegal tunnels through which goods and people were smuggled. This had the side effect of requiring Gazans to use longer and more professional tunnels, which, incidentally, would be easier to control by the Egyptian intelligence as they would be smaller in number. With that in mind, it is unlikely that Egyptian intelligence did not know about the increased flow of weapons or weapon components to Hamas. Did they alert the Israelis to this? Probably not. They most likely allowed it to happen, to highlight to the US and Israel the cost of ignoring Egyptian interests.
Sowing the Wind
Egypt is in dire need of foreign currency, and so, it may seek a one-off payment, in the form of debt forgiveness or an IMF package. It is worth recalling that large-scale debt forgiveness helped secure Egypt’s support for the 1991 Gulf War against Iraq. However, a one-off payment is not as valuable as having a card that can be constantly used to milk the West for further payments. That can only be obtained by keeping the Gaza issue alive, and, with it, the revenues that go to senior Egyptian officers from allowing goods to be smuggled into the Gaza Strip. Therefore, as Israel gets bogged down in Gaza, it will probably seek Egyptian help and mediation. In turn, Egypt will seek additional US economic aid, perhaps a new and more friendly IMF package, and, as an ancillary demand, a closure of the issue of Senator Menendez’ suspected receipt of bribes from Egypt. Egypt will have the upper hand in any such talks, as it will still to decide the extent to which Hamas’ tunnels keep operating, what goes through them, and therefore how quickly Hamas rebuilds its capabilities. That said, Egypt would never want Hamas to actually come out victorious, nor would it want Hamas to grow too strong. It merely wants to show the US and Israel the price of getting too close to other Arab countries and ignoring Egyptian interests. With Israel chastised by the war, it is likely that Egypt can get political support to receive additional IMF support, and therefore that it will face less pressure to devalue its currency, probably resulting in a smaller devaluation than would otherwise have been the case. Finally, it is worth recalling that, with Israel attempting to push Gazans into Egypt, and the US having shown that it is unreliable, Egypt will likely continue to destabilise Israel by covertly working with Hamas, while avoiding both excessively antagonising the United States, and allowing Hamas to grow too strong. The question is, how long can Egypt keep up such a balancing act?