From Responsible Statecraft, October 29:
Cairo buys an increasing amount of fuel from abroad, owes billions to foreign lenders, and depends on open Red Sea-Suez traffic, among other pressures.
Egypt's parliament has voted, after two postponements, to authorize President Abdel-Fattah el-Sisi to take “necessary measures” to help defend Saudi Arabia against the Houthis, the Iran-aligned group that controls much of Yemen and has spent weeks firing missiles and drones at the kingdom’s airports and fossil fuel infrastructure.
It took weeks of debate in the halls of power for the parliament to ultimately give Sisi the greenlight. This is unusual given that the chamber is largely pro-government and normally gives the president what he asks for.
A handful of members abstained over concerns that relevant details — such as the length of the mission, the cost, how many troops would be sent — were never disclosed. Their complaints reflect deep unease in Egypt about being dragged into a foreign war.
To understand why Sisi has pushed to provide military support to Saudi Arabia, despite institutional reluctance, one must follow the money.
Saudi Arabia keeps roughly $10.3 billion parked at Egypt’s central bank. These deposits count toward Egypt’s foreign-currency reserves. Add accounts owned by Kuwait and Qatar and the total is about $18 billion, close to one-third of Egypt’s $57 billion of reserves. Egypt relies heavily on these deposits because it is one of the world’s biggest wheat importers. It also buys an increasing amount of fuel from abroad and owes billions in interest to foreign lenders, all in dollars, which it does not, on its own, earn enough of.
There is no public indication that Riyadh tied those critical deposits to Egypt’s military support. But Cairo does not need to be asked. Its pound just hit a record low of 56 to the dollar. Debt service — interest plus repayments — takes about 64% of this year’s budget, and the interest payments alone cost more than the state spend on education, health, wages and subsidies put together. A government in this position cannot easily say “no” to one of its main financial backers.
Egypt has spent decades avoiding foreign entanglements, especially in Yemen. In 1962 then-President Gamal Abdel Nasser sent troops there to back the republicans in a civil war. The republicans ultimately won, but Egypt was bogged down for years and lost thousands of soldiers.
Yet staying out has proved much harder than Egypt hoped. When Iranian missiles hit the United Arab Emirates earlier this year, Abu Dhabi, which rescued Egypt’s economy in 2024 with a blockbuster $35 billion property deal on the Mediterranean coast, complained loudly that its Arab friends were doing nothing. Cairo then quietly sent a detachment of Rafale fighters, which only became public knowledge when Emirati state media showed Sisi inspecting the jets during a visit.
The lesson learned from that episode is that Gulf money comes with an expectation of visible loyalty....
....MUCH MORE
