Egypt Wants to Do Business With Israel – Just Don’t Talk About It
Egypt Wants to Do Business With Israel – Just Don’t Talk About It
After 40 years of cold peace, Cairo is signaling that it wants more trade, investment and tourism with its neighbor. Are ordinary Egyptians ready?
It says a lot that six months of diplomatic relations with the United Arab Emirates has produced far more business and tourism than four decades of peace with Egypt.
Even before formal ties were established, Israeli and Emirati companies were already talking to each other, and since then deals have been coming fast and furious in banking, desalination, high-tech, energy and defense, to name a few. Kosher restaurants have sprung up in Dubai and even gyms that teach Krav Maga self-defense techniques. Before the window closed due to the coronavirus, some 130,000 Israelis had already visited the UAE.
Nothing like that has ever happened with Egypt. Last year, two-way trade was a mere $171 million, less than it was a decade ago. Israeli tourists visit adjacent Sinai in huge numbers for the beaches, but few visit the rest of Egypt.
On the other side of the coin, in 2019 – even before COVID-19 effectively put an end to travel – just 8,000 Egyptians visited Israel.
Egypt has traditionally had a different attitude toward peace with Israel than the UAE has. Cairo was willing to sign an agreement in 1979 because it was tired of war and wanted to get Sinai back. In return, it was willing to trade ambassadors and cooperate on security, but trade and tourism, much less cultural exchanges, was all but officially discouraged.
It was a stable peace, but a grudging one on the Egyptian side.
There are signs that things are starting to change. They have been detectable for some time in the energy sector, where Israel and Egypt have moved forward with multibillion-dollar deals to send Israeli natural gas to Egypt, both for the domestic market and, eventually, for reexport to Europe.
The extent of Egypt’s commitment to an energy partnership with Israel has extended to include forming a regional organization last year to promote energy development in the East Mediterranean. Last month, Cairo underscored its interest in an energy partnership when Energy Minister Tarek El Molla visited Israel to advance plans to build an undersea pipeline connecting Israel’s Leviathan field with two gas liquefaction plants in Egypt. It was the first such visit by an Egyptian minister in five years.
The signs are fainter, but nevertheless encouraging, that Egypt wants to expand economic ties beyond the energy sector.
One symbolic indication of Egypt’s traditional efforts to distance itself from Israel was the air link between Cairo and Tel Aviv. For decades, the route was flown by a one-plane airline called Air Sinai, rather than under the livery of flagship EgyptAir. Earlier this month, however, EgyptAir submitted a request to Israel to fly the route under its own name.
The previous week, Israeli Intelligence Affairs Minister Eli Cohen met with his Egyptian counterpart, Nasser Fahmi, in the Sinai resort of Sharm el-Sheikh. The agenda was the usual focus of bilateral ties, namely security. But both ministers came with delegations of businesspeople, 60 in all, in what was billed as the biggest such gathering in 20 years.
What could be spurring this new Egyptian readiness to do business with Israel? Part of the reason could be to show the Biden administration that Egypt is a better friend of Israel than ever, so maybe Washington should look the other way on Egyptian human rights violations.
But the deeper reason lies in the east, not the west.
Normalization with the UAE, Bahrain and Morocco has opened a new chapter in Israeli-Arab relations. These countries aren’t content with holding their nose while they engage in a cold peace with Israel; to one degree or another, they aspire to wider ties, especially in business and high-tech. Egypt and its cold peace risk being sidelined as Israel pursues deals with much more willing partners. If one day the Saudis decide to normalize relations with Israel, Egypt could find itself entirely marginalized.
Already, the budding Israel-UAE friendship is posing a threat to Egypt’s Suez Canal revenues by a prospective deal to ship Emirati oil products via an Israeli pipeline.
Egypt enters the competition for Israeli business with a big handicap. That was evident in the Cohen-Fahmi meeting last month: At Egypt’s behest, there was little media coverage of the event. The same happened during Molla’s visit – his office released an announcement about meeting with Israeli leaders that neglected to mention he was in Israel.
Egypt is sending a double message: one that it wants to do more business with Israel; and another that says it should be done quietly, subject to media censorship.
Cairo has a problem in that the Egyptian public, in particular its chattering class, remain vociferously anti-Israel. So far, it appears that President Abdel-Fattah al-Sissi isn’t prepared to oppose it, even though his regime quite happily engages in censorship when it wants to.
For energy deals, Egypt’s Janus-faced policy doesn’t present much of an obstacle. A few big energy companies sign agreements and build the infrastructure without the public needing to get involved. But for the kind of deep and multifaceted commercial ties Israel is developing with the UAE, everyone has to be on board: the business people negotiating deals; the government officials that approve them; the media that can alternately skewer or laud them; and the workers that will make them happen.
It’s impossible to imagine that happening in Egypt today.
