Egypt is particularly affected by Houthi attacks on merchant ships in the Red Sea: many vessels avoid the strait between the Arabian Peninsula and north-east Africa, hence not passing through the Suez Canal, which costs Egypt a lot of money.
Since the beginning of the year, revenues from fees for crossing the Suez Canal have fallen by 40 percent compared to this period in 2023, the head of the department that manages the canal announced. In the first ten days of this year, traffic has decreased by 30 percent. Egypt has already responded to the downturn by raising transit fees by between five and 15 percent.
Egypt’s economy is under pressure
The reduced use of the Suez Canal comes at a time when the country is already in a serious economic crisis. Declining natural gas exports, weaker tourism and falling remittances from foreign workers are taking a toll on Egypt’s economy.
Because of the Red Sea crisis, the country is facing a major economic challenge, says Egyptian economist Ahmed Zikr Allah. “Right now, more than half of Egyptians already live below the poverty line. So the drop in Suez Canal revenue is hitting the country even harder.”
Combined with the devaluation of the Egyptian lira, the country may find itself in a situation where it will no longer be able to pay its debts, suggests Ahmed Zikr Allah. “In this situation, a new loan from the International Monetary Fund will be needed.”
Aside from military action against the Houthis
However, Egypt did not take part in the military actions aimed at ensuring the safety of trade routes in the Red Sea. The country has its reasons for this, explains the Egyptologist Stefan Rohl from the Berlin Foundation “Science and Politics”. The government in Cairo is probably aware that the airstrikes that the US and Britain have undertaken are unlikely to improve the security of the route, which is important to Egypt in the long term. “The idea that with just a few airstrikes the Houthis can be deterred from attacking maritime traffic is naive. That’s probably what they think in Cairo too.”
Egyptian diplomacy has shown restraint on the matter. A Foreign Ministry statement expressed “deep concern” at the escalation in the Red Sea. “It is necessary to unite international and regional efforts to reduce tension and instability in the region, including for the safety of shipping in the Red Sea,” the statement added. There is no mention of military involvement or Egyptian involvement in the US initiative against the Houthis. The only Arab country to join the US-UK-led coalition remains Bahrain.
Domestic political issues
The authorities in Egypt are considering their next moves also in view of the domestic political situation, says Stefan Rohl. The fact that the Houthis are opposing the war that Israel is waging in Gaza with their attacks has also gained them popularity in Egypt. “If the government joins a military operation against the Houthis, it will certainly cause major protests in Egypt,” Rolle believes. “Furthermore, some senior security officials in Egypt are already very reserved about Israel.” It is true that these same people in Cairo do not consider the Houthis’ actions to be effective and a prerequisite for a change in Israel’s position. “But the hope is that it will put pressure on Israel and its partners. That’s another reason why the desire to intervene against the Houthis in these circles is not very high.”
Political scientist Mustafa Kamel al-Sayed of the American University in Cairo sees things in a similar way. He says the US-UK coalition aims to protect Israel from external pressure. Washington, for example, has not joined the widespread calls in the Arab world for a ceasefire in Gaza. That is why countries such as Egypt and Saudi Arabia did not join the coalition against the Houthis, according to al-Sayed. Given the current situation, this could be interpreted by other countries in the region as support for Israel.
Washington is aware of the situation in Egypt
Could Cairo’s reluctance to join the military operation against the Houthis lead to more serious problems with Washington? According to the Egyptian expert, this is unlikely. Many other countries, including Western countries, also refrained from participating in this coalition. So Egypt’s refusal is unlikely to weigh much.
Stefan Rohl is of the same opinion. “In Washington, they are most likely sympathetic to Cairo’s position. There, they also know how unpopular any step that could be read as support for Israel would be in Egypt, and what a risk it would be to the government.”
Authors: Kersten Kniep | Mahmoud Hossein
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2024-01-28 11:23:00
#Houthi #attacks #costing #Egypt #dear
