Egypt renews focus on stable growth, regional security

The current government has adopted an expansive foreign policy in the last two years. While the country’s dealings with the international community are often rooted in the region’s current problems, Cairo is also pursuing an agenda that supports growth at home.

Us Relations

The year 2016 saw a significant reboot in the bilateral relationship between Egypt and the US under the presidency of Barack Obama, under which the US re-launched military aid to Egypt, which had been put on hold since political instability engulfed the country in October 2013. As such, what had been briefly a strained relationship during the latter months of the previous administration of Mohamed Morsi and the initial months of President Abdel Fattah El Sisi’s administration has been put on a steadier footing. The US has long supported Egypt as a key ally in the Middle East, with the US government providing Cairo with $1.3bn worth of foreign aid each year between 1987 and 2015, according to a February 2016 report from the US Congressional Research Service.

Foreign Policy Rationale

Such a move will not only bring material benefit to Egypt’s domestic and foreign goals, it will also send a message about its key strategic position in the region. In December 2015 Sameh Shoukry, the minister of foreign affairs, told local Arabic-language media that the reboot in relations was the result of Egyptian efforts to communicate the country’s current situation and its importance to the region. President El Sisi had also focused on trying to re-emphasise this message in the last few months of 2016, and has taken the opportunity provided by the arrival of a new US president to further improve relations between the two countries.

The Egyptian head of state was the first international leader to call and congratulate President Donald Trump after his election victory in November 2016. Following the call, the Egyptian presidency released a statement saying, “Egypt hopes the presidency of Donald Trump will inject new life in Egyptian-American relations.”

This certainly appears to be the case thus far. In January 2017 Reuters reported that in a telephone call the two leaders discussed Egypt’s fight against terrorism and extremism and the US’ commitment to bilateral relations. According to the White House, Trump and El Sisi also discussed ways in which the US could support the economic reforms undertaken by Egypt. Given the difficulties blighting the wider region, Egypt is positioning itself as a reliable partner to the US in the region. Egypt’s position as a regional power broker can also be seen in its election to the UN Security Council in October 2015. It will hold its position as a non-permanent member of the council for two years, which started in 2016. As part of this proactive foreign policy, Egypt has also been strengthening its relationship with other global powers.

Russian Ties

Egypt has also been pursuing closer ties with Russia. For example, in August 2015 President El Sisi took his third presidential visit to Moscow. Local media reported that during talks with President Vladimir Putin, El Sisi discussed the possibility of establishing a free trade zone between Egypt and the Eurasian Economic Union – a bloc that includes Russia, Armenia, Belarus, Kazakhstan and Kyrgyzstan. Later, in November 2015, the two countries announced a nuclear deal, under which Russia will loan Egypt $25bn for the construction of a nuclear power plant at Dabaa, on the country’s north coast. The state-owned Russian firm Rosatom will construct the facility.

China

Cairo has also been tightening relations with China on the basis of closer economic cooperation. In late 2014 the two countries signed a comprehensive strategic partnership agreement that will lead to closer economic and technical cooperation. This includes working together on renewable energy and space technology. China has a growing interest and presence in Egypt. Trade between the two countries is estimated at $12bn per year. Furthermore, about 1220 Chinese companies, with investments totalling $500m, operate in Egypt. Much of this investment is focused in the China-Egypt Suez Economic and Trade Cooperation Zone. President Xi Jinping’s visit to Cairo in January 2016 deepened the relationship between the two nations further. The visit led to the signing of $10bn worth of bilateral deals. The 21 agreements included a $784m deal under which the State Grid Corporation of China will bolster power supply in the Nile Delta region for the Egyptian Ministry of Electricity and Renewable Energy. During the visit, China also agreed to provide $2.7bn for the construction of Egypt’s new capital, as well as an additional $1bn loan.

India

In keeping with a foreign policy approach based on economic interest and security requirements, ties between Egypt and India have strengthened under the El Sisi administration. The Egyptian president has visited India twice since 2015. The closer dialogue between the two nations has been accompanied by a substantial jump in bilateral trade. In the five years to 2016 trade between the two countries increased by 60%. On his second visit in September 2016, President El Sisi told Indian media, “Egypt is particularly interested in benefitting from India’s experience in developing the [small and medium-sized enterprise] SME and IT sectors. These are two important and attractive sectors, which we are looking to further expand and promote.”

However, it is not simply in the economic field where the interests of the two powers are aligning. In January 2017 Sanjay Bhattacharya, the Indian ambassador to Egypt, told the Press Trust of India that he expected engagement on defence cooperation to be increased over the coming year. The two governments have already established strong strategic cooperation on security issue, including working groups on both cybersecurity and counter-terrorism, in addition to a joint defence committee. The two countries have also carried out joint military manoeuvres.

Eu Agreements

Such deals are an essential part of Egypt’s foreign and diplomatic strategy, which is based both on security considerations and economic development. As such, relations with Europe, Egypt’s largest trading partner, remain of paramount importance. In 2014 James Moran, the EU ambassador to Egypt, announced that the prospect of a Deep and Comprehensive Free Trade Agreement was still on offer. Egypt currently has an Association Agreement, signed in 2004, and an agricultural and fisheries products agreement, signed in 2010, with the trading bloc.

Nonetheless, the El Sisi administration continues to build relations and sign deals with EU partners on a bilateral basis. Deals with Germany’s Siemens and with Italy’s Eni in the field of energy illustrate the continuing value of Europe to Egypt. Indeed, Egypt’s foreign policy is based on a willingness to deal with all parties in its efforts to meet its basic goals of security and economic development. As such, the country’s diplomatic forays are likely to widen further over the coming year in a bid to boost trade, economic development and stability.