There is and will continue to be an edge of rivalry in Egypt’s relations with the dominant Gulf Arab powers. This paper will focus primarily on the Egypt–Gulf relationship during the Sisi era.
Modern historical context: Sadat, Mubarak and Morsi
The modern template was set after the October 1973 Arab–Israeli war, when Egypt was in dire need of financial support and the Gulf Arab states were enjoying the fruits of the surge in oil prices in the wake of their embargo. There was a hiatus after President Anwar el-Sadat’s historic visit to Jerusalem in 1977, which triggered an Arab political and economic boycott of Egypt and prompted Egypt to turn to the US and other Western states for financial support.
Sadat’s successor, Hosni Mubarak, set about restoring ties with the Gulf, and was helped in this task by the emergence of the Islamic Republic of Iran as a perceived threat to regional security. Mubarak later established his credentials through the Egyptian army leading the Arab contribution to the Desert Storm campaign to drive Iraqi forces out of Kuwait in 1991, and this resulted in significant financial rewards through the cancellation or rescheduling of Egyptian debts owed to the Gulf Arab states (as well as to the US and other Western governments). During the final two decades of Mubarak’s rule, relations between Egypt and the Gulf remained in a relatively stable balance: Egypt’s need for financial assistance became less acute, but Mubarak made little effort to dominate the regional agenda; Saudi Arabia was constrained during the 1990s in particular by weak oil prices, while Qatar and Dubai emerged as ambitious new players in the Gulf. Both Egypt and the Gulf Arab states sought to avoid becoming embroiled in the Iraqi conflict in the wake of the US-led invasion of 2003.
The popular uprising in January 2011 that led, within 18 days, to Mubarak leaving office came as a profound shock to the Gulf Arab leaders. They had assumed that Mubarak would be protected through the close strategic relationship that Egypt had established with the US over the previous three decades. The willingness of President Barack Obama to let matters take their course, and in effect to recommend that Mubarak should step aside, prompted a reassessment by Gulf Arab rulers of their own previous assumptions about supposed security guarantees from the US. Among other impacts, the uprisings in Egypt and elsewhere in the Arab world presented distinct challenges and opportunities for the most assertive and ambitious of the Gulf Arab states. Within the Arabian peninsula, Saudi Arabia and the UAE moved quickly to suppress the protest movement in Bahrain, and the GCC lent support to the ill-fated efforts to chart a political transition in Yemen after the fall of President Ali Abdullah Saleh.
More broadly in the region, there was a sharp distinction between the approaches of Qatar, on one side, and Saudi Arabia and the UAE, on the other. Qatar saw an opportunity to capitalize on its strategy of supporting the Muslim Brotherhood and related groups as models for the integration of political Islam with representative democracy. Doha became a magnet for Islamist groups seeking finance and, in the cases of Syria and Libya, military support. Saudi Arabia’s main focus during the initial Arab Spring period was Syria, where it sought to cultivate opposition elements operating outside the scope of the Muslim Brotherhood, including both Salafists and groups that did not define themselves in Islamist terms. The UAE’s leadership, in particular Abu Dhabi’s crown prince, Mohammed bin Zayed, had a deep aversion to political Islam in all its forms. The UAE took an uncompromising position towards the Muslim Brotherhood in most of the post-Arab Spring arenas, in particular Egypt, Yemen and Libya. It largely avoided any embroilment in Syria, although Dubai afforded a safe haven for members of President Bashar al-Assad’s family and business entourage. Following the mid-2017 sanctions imposed on Qatar by the UAE, Saudi Arabia, Bahrain and Egypt, the Emirati minister of state for foreign affairs, Anwar Gargash, remarked that the UAE had convinced Saudi Arabian leaders to stiffen their position with regard to political Islam.1
During the first post-Mubarak phase in Egypt, the Gulf Arab states kept a low profile, as the three main domestic political forces – the army, the Muslim Brotherhood and the popular movement that had been responsible for the uprising – sought to establish their respective positions. Within two months of Mubarak’s departure on 11 February 2011, the army had established a large degree of control over the political process by pushing through a constitutional referendum that set out a sequence of parliamentary and presidential elections, culminating in the drafting of a new constitution. The Muslim Brotherhood supported this plan, which played to its strengths, given its extensive grassroots organization. The revolutionary movement was opposed, but lacked the organizational coherence to support its argument that deep constitutional reform should take precedence.2 The Gulf Arab states had no obvious influence on these deliberations, and were conspicuous by their absence from a G8 conference in the French resort of Deauville in May. Western governments used the conference to pledge financial support for Egypt, whose interim prime minister, Essam Sharaf, was among the guests. (Also present was the Tunisian prime minster, Beji Caid Essebsi, who went on to become president of Tunisia in 2014, serving until his death in July 2019.) Sharaf’s government had identified a financing gap of $12.5 billion, and held preliminary talks with the International Monetary Fund (IMF) about a loan programme to help cover this, but the Supreme Council of the Armed Forces (SCAF), which had assumed sovereign powers, decided against pursuing this option.
Within two months of Mubarak’s departure on 11 February 2011, the army had established a large degree of control over the political process by pushing through a constitutional referendum that set out a sequence of parliamentary and presidential elections, culminating in the drafting of a new constitution.
The first clear instance of Gulf involvement in post-Mubarak Egyptian politics came with the surge in support for Hizb al-Nour, a Salafist party, during 2011. Salafist groups in Egypt had for some time benefited from financial flows from officially sanctioned charities in Saudi Arabia, as well as from donors in other Gulf states, notably Kuwait. These funds had been mainly directed towards charities and media outlets, but with the launch of the party in June 2011, the Gulf-based donors played an important part in enabling Hizb al-Nour to mount a powerful electoral challenge to the supremacy of the Muslim Brotherhood. In elections for the lower house of parliament between November 2011 and January 2012, the Islamist bloc led by Hizb al-Nour won 24 per cent of the seats, while the Muslim Brotherhood-dominated Democratic Alliance won 46 per cent. However, there is little evidence that the strong electoral performance of Hizb al-Nour and its subsequent positions – notably in support of Sisi’s removal of Mohammed Morsi as president in 2013 – were part of a centrally driven strategy orchestrated by Saudi Arabia.3
The activist Gulf players – Qatar, Saudi Arabia and the UAE – did not play a conspicuous role in the 2012 presidential election, which culminated in a second-round victory for Morsi, the Muslim Brotherhood’s candidate, on 24 June. Morsi secured 51.7 per cent of the vote, compared with 48.3 per cent for Ahmed Shafiq, who was widely viewed as the candidate of the former regime establishment and enjoyed the backing of the army. The success of the Muslim Brotherhood’s campaign was attributable to the depth of its national organization, including finance mobilized by prominent business figures in its leadership, and to the strong aversion to Shafiq among supporters of the revolutionary movement. Morsi’s victory was also clearly a boon to Qatar, and of deep concern to the leaders of the UAE and Saudi Arabia, but these Gulf actors lacked the local networks and contacts to have a significant influence on the outcome. As the result was awaited, the Muslim Brotherhood made clear that there would be dire consequences were Morsi to be denied the victory that its members were convinced he had won. The Egyptian military and intelligence establishment resisted the temptation to intervene in favour of Shafiq. This may have been based on judgment that to do so would be too risky, and that opportunities would arise in the future to co-opt or remove the Muslim Brotherhood administration. It has also been suggested that the Obama administration, along with other Western governments, exerted pressure to ensure there should be no tampering with the result.4
By the time Morsi assumed office, Egypt’s need for external financial assistance had become acute. Foreign exchange reserves (excluding gold) had dwindled to $10 billion, from $32.5 billion at the end of 2010. Qatar stepped in by providing Egypt with a total of $7 billion in short-term deposits and medium-term notes, while Saudi Arabia and Libya placed deposits with the Central Bank of Egypt amounting to $1 billion and $2 billion respectively; Saudi Arabia also issued a $500 million bond to support Egypt.5 Morsi sanctioned the reopening of talks with the IMF, which yielded a staff-level stand-by credit agreement of $4.8 billion in November 2012 – although his administration ultimately decided against proceeding with this agreement, and a scheduled meeting of the IMF’s executive board to approve the facility on 19 December was cancelled at the request of the Egyptian government.6
Yet the cash infusions from Qatar, Saudi Arabia and Libya proved insufficient to stop the further erosion of Egypt’s foreign exchange reserves. The economic crisis faced by the Morsi administration was an important factor in the plans hatched by military and intelligence commanders in the early months of 2013 to force him from office. These plans garnered crucial political and financial support from the UAE and Saudi Arabia, and to a lesser extent from Kuwait, and ushered in the current phase of Egypt–Gulf relations.
1 Royal Institute of International Affairs (2017), ‘The UAE View of the GCC Crisis: What Happened and What Happens Next?’, members’ event, 17 July 2017, https://www.chathamhouse.org/file/uae-view-gcc-crisis-what-happened-and-what-happens-next (accessed 13 Mar. 2020).
2 Hellyer, H. A. (2016), A Revolution Undone: Egypt’s Road Beyond Revolt, London: Hurst & Company. See pp. 43–54 for a detailed account of the constitutional referendum and the respective positions of the military, the Muslim Brotherhood and the revolutionary movement.
3 Stéphane Lacroix, an authority on Islamist movements in Saudi Arabia and Egypt, has cast doubt on theories suggesting that, because Hizb al-Nour received funds from sources in Saudi Arabia, it followed instructions from the Saudi authorities. See Lacroix, S. (2016), Egypt’s Pragmatic Salafis: The Politics of Hizb al-Nour, Washington, DC: Carnegie Endowment for International Peace, https://carnegieendowment.org/2016/11/01/egypt-s-pragmatic-salafis-politics-of-hizb-al-nour-pub-64902 (accessed 16 Mar. 2020).
4 Hellyer (2016), A Revolution Undone, p. 62.
5 For information on these facilities, see Central Bank of Egypt (2013), Quarterly Report Volume 42: External Position of the Egyptian Economy, Cairo: Central Bank of Egypt, https://www.cbe.org.eg/en/EconomicResearch/Publications/Pages/ExternalPosition.aspx?p=3 (accessed 16 Mar. 2020).
6 Confidential communication to the author. This period is covered in more detail in Butter, D. (2013), Egypt in Search of Economic Direction, Briefing, London: Royal Institute of International Affairs, https://www.chathamhouse.org/publications/papers/view/195724 (accessed 14 Mar. 2020).