The conflict in Gaza, ignited by the Hamas attack on Israel in October 2023, has severely impacted Egypt, straining its economy and government resources while prompting diplomatic engagement. Though Egypt has played a key role in mediating between Israel and Hamas, significant economic setbacks, including a drop in Suez Canal revenue and rising inflation rates, have emerged as consequences of the ongoing hostilities.
The ongoing conflict in Gaza, particularly after the Hamas-led attack on Israel on October 7, 2023, has not only devastated the people of Gaza but has also placed significant strain on the neighboring nation of Egypt. The Egyptian government is actively engaged in managing the ramifications of this conflict, facing both economic pressures and diplomatic responsibilities. Egypt has found itself at the forefront of mediation efforts between Israel and Hamas, which have proven to be both successful and unsuccessful at various junctures. As stated by Said Sadek, a professor of peace studies and human rights at the Egypt-Japan University in Alexandria, “Politically, (the conflict) highlighted the Egyptian role in being a moderating force in the Middle East.” This mediation involves close consultations with various international stakeholders, including the United States and Qatar. Additionally, Abbas Kamel, the head of Egyptian intelligence, has been instrumental in facilitating dialogue between the conflicting parties. The American Secretary of State Antony Blinken and Qatari Foreign Minister Mohammed bin Abdulrahman bin Jassim al Thani have also taken part in these mediation discussions. Economically, the impacts of the Gaza conflict have been pronounced. While there are detrimental effects on Egypt’s economy, some opportunities have emerged. Middle East analyst Paul Sullivan noted that Egypt is experiencing financial support through avenues such as the Gulf Cooperation Council, the International Monetary Fund, and the World Bank. Despite these inflows, the fallout from the conflict has caused substantial economic disruption, including a decline in revenue from the Suez Canal, which has dropped significantly due to hindered maritime navigation. Sadek indicated that the drop in Suez Canal revenue has been drastic, stating, “The (Houthis) in Yemen blocked safe navigation across the Red Sea and that affected the Suez Canal that used to bring Egypt about $10 billion dollars. Now we are getting only $3 billion, so there is a big loss of 70%.” This revenue loss occurs in conjunction with rising domestic prices, as the Egyptian government has raised petroleum and natural gas prices multiple times, exacerbating inflation, which has surged to 25%. Furthermore, should Israel cease its gas exports to Egypt, the country could face a natural gas shortage, necessitating expensive imports. Travel warnings from Western nations have further exacerbated challenges for Egypt’s tourism sector, which is a critical component of its economy.
The backdrop of this article lies within the broader context of the Israel-Palestine conflict, particularly the events leading up to and following the October 7, 2023, Hamas attack on Israel. This assault prompted a vigorous military response from Israel, leading to widespread destruction in Gaza. The reverberations of this conflict extend beyond Gaza, affecting neighboring Egypt in various economic and diplomatic dimensions. Egypt’s historical role as a mediator in Middle Eastern conflicts makes it a significant player in the ongoing discourse surrounding the Israel-Hamas situation, inviting scrutiny of its internal economic conditions and international relations amidst regional turmoil.
In conclusion, the ramifications of the Gaza conflict are multifaceted, affecting not only the people of Gaza but also Egypt, which grapples with economic setbacks and diplomatic responsibilities stemming from its mediating position. The decline in revenue from the Suez Canal, rising inflation, and increased energy prices highlight the economic challenges Egypt faces as it endeavors to stabilize its economy while continuing to play a crucial role in regional diplomacy. As Egypt navigates these complexities, it remains essential to consider both the immediate and long-term impacts of the conflict on its national landscape.
Original Source: www.voanews.com
