Kuwait hopes to usher in a “new industrial era,” but the country will have to pay more attention to demand and regional competition to boost industrial output.
Relations between Egypt and Saudi Arabia – a key feature of the Middle Eastern political landscape and a pillar of Arab security – took another body blow on January 16 when Egypt’s Supreme Administrative Court rejected Cairo’s plan to transfer control over two uninhabited, but strategically located, Red Sea islands to Riyadh. The Egyptian-Saudi partnership brings together the Arab world’s most populous and wealthiest (as measured by national gross domestic product) countries, respectively. Since this long-standing alliance was restored following the rise of Egyptian President Abdel Fattah al-Sisi in 2014, it has been widely viewed among Sunni Arabs as an essential bulwark against a range of serious and mounting threats, including al-Qaeda and the Islamic State in Iraq and the Levant; the spreading influence of Iran; and political upheavals such as those during the “Arab Spring” that typically gave way to prolonged bouts of instability. However, a series of disagreements have strained relations between Cairo and Riyadh in a public and, especially for some of the Gulf Arab countries that are close to both, troubling manner. How much damage has been done? What’s the status of mediation efforts by the United Arab Emirates and others? And how are Egyptian-Saudi relations likely to evolve in the medium and long terms?
Each of the specific disputes, such as the islands issue, alone might not have been sufficient to create the present level of unease. But, taken together, and with an underlying core disagreement that informs most of the tension between Cairo and Riyadh, they amount to a significant problem for both countries, the Arab world at large, and the United States, which is a key ally of both. (For a detailed backgrounder on relations between Egypt and the Gulf Arab countries, including the ongoing issue over the Red Sea islands, see the December 12, 2016, AGSIW issue paper, “Egypt-GCC Partnership: Bedrock of Regional Security Despite Fissures.”)
At the heart of the differences between Cairo and Riyadh on a range of regional concerns lies the issue of religion and politics. The Egyptian government, like that of the UAE, categorically rejects all forms of politicized Islam, or the Islamization of politics, in the Arab world. Egypt and the UAE agree that there is a range within the Islamist movements and differences among groups. But they see them all as stemming from common origins, sharing key a priori assumptions that, strategic and tactical differences notwithstanding, lead to similar logical conclusions. They therefore view Islamists in general as operating along a continuum and ultimately reinforcing rather than countering each other in the broadest sense. They thus reject the idea that some “moderate” Islamists, such as the Muslim Brotherhood-affiliated parties, might be useful bulwarks against more extremist ones, such as Salafist-jihadist groups like al-Qaeda and ISIL. They are all viewed as aspects of a single, overriding threat. The most overt manifestation of this shared view has been Egyptian-Emirati cooperation in Libya, including joint military action against extremist groups there.
Saudi Arabia, by contrast, views some Islamist groups, particularly some Salafists, as allies in certain contexts. It has recently softened its stance against the Muslim Brotherhood somewhat, worked with Brotherhood-affiliated political figures in Yemen, and supported Islamist rebels in Syria and some other parts of the Arab world. The UAE’s relationship with Saudi Arabia is the cornerstone of its national security policy, and it is careful not to allow disagreements over its stance on Islamist groups to harm relations with Riyadh. The UAE takes care, generally, to tread lightly when it differs with Saudi Arabia. In Yemen, it operates somewhat differently than Saudi Arabia, but in different parts of the country, with UAE forces in the south primarily now combating ISIL and al-Qaeda while Saudi Arabia continues the battle against the Houthi rebels and their Yemeni allies in the north. In Syria, the UAE has sided with the U.S. and Jordanian approach, prioritizing the battle against ISIL, and has been active in the south of the country, coordinating with, and following the lead of, Washington and Amman. This divergence of emphasis has not led to any major problems with Saudi Arabia.
In comparison, Egypt’s position has increasingly run directly contrary to Saudi Arabia’s view of Syria. Cairo never showed much enthusiasm for the campaign to oust Syrian President Bashar al-Assad, which has been a central pillar of Saudi and Qatari foreign policy in recent years, and over the course of 2016 became more overt in its opposition to regime change in Damascus. Indeed, by November, Sisi bluntly expressed support for the victory of Assad’s army in the conflict. Egypt’s relations with Russia have warmed, and fundamental agreement over Syria has been a core component. In the U.N. Security Council, of which Egypt is currently a nonpermanent member, Cairo voted for both Russian and French-sponsored resolutions that reflected two very different perspectives on the current situation and, more importantly, the future of Syria. Cairo’s support for the Russian version caused significant anger in the Gulf, especially Saudi Arabia, and was apparently the proximate cause for Riyadh cutting off the delivery of oil supplies to Egypt despite the existence of a multiyear agreement for such discounted sales. There have even been reports that Egypt sent military personnel and other material support to help prop up the Assad regime in Damascus, although there is no evidence for this and most observers regard it as extremely improbable.
However, differences over Syria are the most dramatic manifestation of this broader divergence over religion and politics. And while the UAE has been careful not to allow its views on the subject, which are similar to the Egyptian government’s, to interfere with relations with Riyadh, Egypt has been less cautious, which has also been apparent regarding the conflict in Yemen. Both the UAE and Saudi Arabia had hoped that Egypt would contribute more militarily to the campaign in Yemen than it did. Egyptian naval and ground forces have been involved, but not in particularly large numbers. Riyadh was reportedly additionally annoyed by the visit of a delegation of Houthi representatives to Cairo in 2015.
The most contentious issue, and the one that has occupied most of the public bandwidth on strained relations between the Egypt and Saudi Arabia, is the dispute over the Red Sea islands of Tiran and Sanafir. While advocates for each country’s territorial claim have a case, the historical record tends to favor the mutual Saudi and Egyptian government narrative that the islands were temporarily transferred to Egyptian control to prevent Israel from seizing them in the early years of the Arab-Israeli conflict. But the Egyptian government mishandled the issue and did not prepare the political ground for the transfer plan, which was suddenly presented as a fait accompli and was perceived as a blow to Egyptian national pride. The ensuing public outcry has allowed those inside Egypt hostile to the present administration, and regional powers and media outlets sympathetic to the Muslim Brotherhood, to frame the agreement as a kind of Egyptian capitulation to Saudi financial clout and pressure, especially since the transfer was announced during King Salman bin Abdulaziz’s April 2016 visit to Cairo. Saudi Arabia also misread the political landscape in Egypt. Riyadh appeared to many Egyptians to be demanding and heavy-handed, and participated in a process that produced friction with a key ally and weakened the Sisi administration it had long worked to support. The organizations and lawyers pressing legal cases against the plan in Egypt are all ardent critics of the present government, although the Egyptian public across the political spectrum is largely against transferring control of the islands. The timing of the announcement allowed critics of the plan to cast it as a quid pro quo despite the complex history and strong arguments for the transfer of control. The Egyptian government has been even mischaracterized as having “sold” a part of Egypt’s patrimony to Saudi Arabia for financial gain.
Both governments see the transfer of control over the islands as fulfilling a decades-long pledge for Egypt to return control to Saudi Arabia once the Israeli threat had diminished, which both countries now believe to be the case, as well as facilitating a massive construction project that will be paid for almost entirely by the Saudis. All of this should have been explained to the Egyptian public in advance. Instead, the islands dispute has been allowed to emerge as a symbol of Egypt’s generalized decline, particularly its loss of regional clout and its perceived dependence on, and second rank to, Saudi Arabia and other wealthy Gulf Arab states. The controversy therefore serves as a proxy and an outlet for a broader sense of tarnished Egyptian national morale, and a convenient cudgel with which to castigate the Sisi administration as insufficiently patriotic.
The recent court ruling is by no means final. The government plans to appeal to another judicial body, and has also referred the matter to Parliament, which claims that it, alone, can make a final determination on the matter. Well-informed Egyptian sources agree that the controversy is likely to drag on for months, possibly not being resolved until at least the middle of the year, if not later. Egyptians are not alone in feeling peeved over the issue, though. While the Saudi government has maintained a careful and relatively quiet stance over the controversy in recent months, some Saudi commentators have expressed their own frustration, and several have suggested potentially taking the matter to international arbitration.
A further irritant between Cairo and Riyadh emerged on December 16, 2016 when a high-level Saudi delegation visited the Renaissance Dam project in Ethiopia, which Egypt believes threatens its all-important Nile River water supplies. The visit was seen in Cairo as possibly implying tacit Saudi support for the project, eliciting protests from well-placed Egyptians. The noted Saudi commentator Abdulrahman Al-Rashed replied that while Egypt is certainly more important to Saudi Arabia than Ethiopia, “If Egypt does not walk on the path of reform quickly it will lose historic opportunities in the Gulf and will not become a giant economic partner. Furthermore, it will continue to look for aid, and this is impossible to sustain.”
As noted, the UAE is particularly concerned about this rift between two of its most crucial allies. Saudi Arabia is essential to its national security strategy, while it aligns with Egypt on the key issue of Islamism. In November 2016, Crown Prince of Abu Dhabi Mohammed bin Zayed visited Egypt and then Saudi Arabia in rapid succession, in what was widely understood to be a high-level effort at mediation between the two key Arab powers. Interestingly, and perhaps ironically, these efforts were welcomed by the Syrian government, among others. But they did not appear to break any impasse, and tensions over Syria, the islands, and other issues persist. Emirati sources say the UAE has not given up on trying to bring the parties closer together, but is continuing with “conversations” rather than mediation and is trying to do things more quietly, given the unlikelihood of an immediate, short-term breakthrough.
In the long run, though, the UAE is likely to see its two major partners patch things up. Saudi Arabia and its Gulf Arab allies fundamentally remain committed to Egypt’s stability and, despite the tensions with Riyadh, view it as too important and, literally, too big to fail. Saudi Arabia alone has, in one form or another, contributed an estimated $25 billion into the Egyptian economy since 2013, with many billions more coming from other Gulf countries, most notably the UAE. Even as the disputes were gaining steam over the past summer, Saudi Arabia pledged $2 billion in direct aid to the Egyptian treasury, in part to help Egypt secure an all-important loan from the International Monetary Fund. And when Saudi Arabia cut off oil supplies following Cairo’s backing of the Russian-sponsored U.N. Security Council resolution on Syria (another Saudi move viewed by some Egyptians as coercive and overbearing), Riyadh’s Gulf Cooperation Council ally Kuwait stepped in with a discount deal to make up most of the shortfall. A separate agreement with Iraq has secured most of Egypt’s energy needs for the foreseeable future, although a resumption of energy supplies on favorable terms from Saudi Arabia would be a key indicator of a broader rapprochement between the two countries.
Observers on all sides expect such a rapprochement to eventually happen, because neither Egypt nor the Gulf Arab states, including Saudi Arabia, can afford to do without each other’s basic cooperation and support, particularly given the unprecedented series of domestic and regional security challenges facing the Arab world. Tensions over issues such as the war in Syria or conceptual divergences such as how to view differences between Islamist factions are highly unlikely to override the strategic imperatives that over the long run will prompt Cairo and Riyadh to seek to work together on many vital areas of mutual concern. The islands controversy is likely to play out very slowly in Egypt’s labyrinthine legal, administrative, and political system, insofar as it suits all sides in Cairo to drag the issue out indefinitely to avoid a complete confrontation with either domestic public opinion or Saudi Arabia. And, while the outcome of the islands issue is not predictable, even if the plan falls through and Egypt reneges on transferring control of them to Saudi Arabia, relations between the two countries will not collapse despite the frustration and annoyance that would inevitably ensue in Riyadh. Well-informed observers in Egypt, Saudi Arabia, and the UAE characterize the relationship as a “dysfunctional marriage” but one that will endure despite differences with no plausible prospect of any divorce.
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