The Gaza conflict, initiated by Israel’s actions following a Hamas-led attack, has significant repercussions for Egypt, impacting its economy and necessitating extensive diplomatic efforts. Egypt has played a critical role in mediation while grappling with economic challenges, including revenue loss from the Suez Canal and declining tourism. Despite receiving financial assistance from various international organizations, the situation poses ongoing economic strain on the country.
The ongoing conflict in Gaza, exacerbated by Israel’s military response following the Hamas-led attack on October 7, 2023, has had significant repercussions not only for the people of Gaza but also for neighboring Egypt. The situation has strained Egypt’s economy while necessitating extensive diplomatic engagement on the part of its government officials. Egypt has assumed a pivotal role in mediation efforts between Hamas and Israel, characterized by a flurry of diplomatic activities and numerous visits by international envoys. Despite these efforts yielding mixed results, Egyptian officials, including the head of intelligence, Abbas Kamel, have dedicated substantial time to mediating discussions. Collaborating partners in these negotiations have included United States Secretary of State Antony Blinken and Qatar’s foreign minister, Mohammed bin Abdulrahman bin Jassim al Thani. Professor Said Sadek, an expert in peace studies and human rights at the Egypt-Japan University in Alexandria, remarked on Egypt’s continued involvement in the negotiations, stating that the conflict underscores its role as a moderating force in Middle Eastern politics. He emphasized, “In all the negotiations that took place later on between Hamas and Israel, they always needed a mediator, and it was Egypt and Qatar and the United States. And they all played a role in that and sometimes they succeeded and sometimes they failed.” Economically, the ramifications of the Gaza conflict have been multifaceted. While it has inflicted serious damage on the Egyptian economy, analysts such as Paul Sullivan highlight potential benefits that have emerged. According to Sullivan, “Egypt is being squeezed between many rocks and many hard places, with a few positive bits of light.” These positive aspects include financial support from the Gulf Cooperation Council (GCC), the International Monetary Fund (IMF), and the World Bank, aimed at stabilizing Egypt’s economy in turbulent times. However, the conflict has also led to significant revenue losses, particularly from the Suez Canal, a crucial revenue source for Egypt. Professor Sadek pointed out that navigation through the Red Sea has been hindered by external conflicts, leading to a drastic decline in canal revenue, plummeting from approximately $10 billion to merely $3 billion—a staggering 70% drop. Moreover, Sullivan cautioned that a disruption in natural gas exports from Israel could exacerbate Egypt’s economic strain by forcing the country to seek more costly imports. Continued inflation in Egypt, reaching 25%, has largely been attributed to the instability caused by the Gaza conflict, necessitating the government’s decision to increase petroleum and natural gas prices by up to 15% on two occasions this year. Additionally, tourism has suffered as Western nations have issued travel advisories against visiting Egypt and other Middle Eastern regions due to the ongoing conflict, further impacting Egypt’s economic stability.
The Gaza conflict has been a long-standing geopolitical issue with significant humanitarian and political implications. Following the declaration of war by Israel after a Hamas-led attack, tensions have escalated in the region, prompting extensive diplomatic efforts by neighboring countries, particularly Egypt. Given its geographical proximity and historical role as a mediator in regional conflicts, Egypt’s involvement is crucial in attempts to restore peace. However, the conflict has had adverse effects on Egypt’s economy, which is heavily reliant on revenue from the Suez Canal, tourism, and energy sectors.
The Gaza conflict has profoundly affected both the people of Gaza and neighboring Egypt. While it has generated ongoing diplomatic efforts led by Egypt, the economic consequences for Egypt cannot be overlooked. The nation faces significant losses in revenue while also grappling with rising inflation and a faltering tourism industry. Despite some financial support from international entities, the situation remains precarious as Egypt navigates the complexities of regional diplomacy and its own economic challenges.
Original Source: www.voanews.com
