Egypt & Asian Affairs| Economic Reforms

Egyptian diplomats and intelligence officials recently negotiated an end to the 11­-day conflict between Israel and Palestine.

The new Israeli government hopes that Egypt can manage the turbulent cauldron in Gaza. Political and economic changes are pushing Egypt to become a leader in West Asia.

Some of the important which need attention is:

• Re-­engagement Africa: After being ignored for a long period, Egypt is now actively reconnecting with its African neighbors by signing important defense and economic partnership agreements.
• Saudi Arabia and the United Arab Emirates failed their military interventions. In Syria, Yemen, and Libya, or the blockade of Qatar, opening up space for Egypt to regain its traditional influence in the Arab Council.
• Economic hard times: The economic reforms in 2015 finally provided US$40 billion in foreign exchange reserves in 2018, with a growth rate of 5.6% in 2019.
• New cooperative alliance: Egypt, Iraq, and Jordan announced the establishment of a new tripartite organization in June 2021, announcing the emergence of the New Levant al­ Sham al­ Jadid.
• Egypt is concerned that the project may restrict its access to the waters of the Nile, which is a source of 95% of its freshwater, and regards the project as an existential threat.
• Turkey: In the Eastern Mediterranean, it is Egypt that has jointly proposed requirements for offshore energy with other coastal partners. This conflicts with Turkey’s claims. Since both parties are unwilling to compromise, people are seriously worried that there will be a conflict.
• Domestic economic issues: Affected by the new crown pneumonia epidemic, the unemployment rate has increased, and the recovery slowed down. The proportion of workers with insufficient income has risen from 55% to nearly 75%. The poverty rate in Egypt is still 2% higher than in 2015 when the reforms began. Further deterioration of the economy may force Egypt to seek help from the Gulf countries, weakening its independent position on regional affairs. Although Egyptian diplomacy has put it at the forefront of regional affairs, it also faces severe challenges.