Egypt and Saudi Arabia: Any good relationship needs work

It is a particularly exhausting time to be an Arab foreign minister.

On June 21, Saudi Foreign Minister Prince Faisal bin Farhan reiterated his country’s condemnation of the State of Israel’s “blatant aggression” against the Islamic Republic of Iran during the opening session of the 51st Council of Foreign Ministers of the Organization of Islamic Cooperation (OIC) in Istanbul. He called the attacks “a breach of international laws and norms” and said they risked escalating an already incendiary situation.

Later that day, his Egyptian counterpart, Badr Abdel Atty, laid out his country’s almost identical position. Abdel Atty also met with the Iranian foreign minister, Abbas Araghchi, and emphasized the need for de-escalation and the pursuit of all diplomatic avenues to tamp down the spiraling violence. When the Egyptian and Saudi foreign ministers met later on the sidelines of the conference, they appeared to present a largely unified stance. And two days later, when Iran struck Al-Udeid Airbase in Qatar — the United States’ largest military base in the Middle East and home to US Central Command’s forward headquarters — both countries again made nearly identical announcements, calling it an “unacceptable aggression” and condemning the “violation of Qatar’s sovereignty.” 

For two countries that have had to make efforts to deny creeping fissures in their relationship, it was a moment of rare, unadulterated unity. Both countries have found increasing common ground over the past year or so. Economics plays a significant part, although the nature of that particular relationship has changed. Saudi Arabia no longer assigns the bulk of its investment to shoring up Egypt’s reserves with deposits in the Central Bank. In 2023, Saudi Arabia’s finance minister signaled the end of the no-strings-attached policy, saying the kingdom would work with multilateral institutions in pushing for actual reforms. The change in policy was not directed exclusively at Egypt, but Cairo certainly got the message. Saudi Arabia was unlikely to allow Egypt to tumble into financial collapse — the stability of the region’s most populous and vitally geostrategic country was integral to the Gulf’s own stability and security — but there would be no more blank checks. If Egypt wanted anything other than the slimmest of insurance policies, it would have to plan on Saudi investment, not Saudi assistance. Egypt promptly shifted gears and in March of this year, Egypt’s parliament approved a bilateral Egypt-Saudi investment agreement to attract, and keep, Saudi investment. The two countries currently largely agree on foreign policy, are opposed to their citizens’ occasional bouts of political fervor, tend to worry about militant Islamism, and are keen on maintaining Western alliances while chafing at Western interference. The current détente notwithstanding, the Egyptian-Saudi relationship has been tested several times over the last decade.

The first gaps of daylight began to show in the years after the removal of former Egyptian President Mohamed Morsi of the Muslim Brotherhood in 2013 in a popular coup, following massive public demonstrations against him and the Brotherhood. The Gulf countries, for whom Egypt’s equilibrium has always been the bedrock of regional stability, provided the country, and its new President Abdel Fattah el-Sisi, with considerable political and financial support, helping to prop up an economy shaky from two uprisings in as many years. That support, and a shared history, however, did not prevent the start of a divergence on regional political stances. When Saudi Arabia and the United Arab Emirates led a coalition against the Houthis in Yemen two years later, Egypt was asked to join. The last time Egypt had fought in Yemen was in 1962-64, when it wound up committing over 70,000 men, about 10,000 of whom died. President Gamal Abdel Nasser later told the US ambassador to Cairo at the time that Yemen was “Egypt’s Vietnam.” President Sisi remembered history all too well and refused to repeat it.

It did not help that in 2015, an anti-Egypt Islamist group called Mekameleen released a tape that was allegedly a recording of Sisi and two senior members of his staff, made before he became president, discussing how to get the Gulf states to give them more money. The recording was subtitled and a person the group claimed was Sisi can be heard saying “they [the Gulf countries] have money like rice.” At that point, Saudi Arabia, the UAE, and Kuwait had poured $12 billion into Egypt’s coffers, including Central Bank deposits, aid, and fuel. Sisi had to scramble on damage control, calling each of the leaders in turn.

Even the most patient Gulf ally might have begun to feel that Egypt was taking their support for granted, and it is very possible that Egypt realized a grand gesture was in order. That gesture came in the form of two tiny, uninhabited Red Sea islands.

Small islands become big obstacle

The Gulf of Aqaba is a long, narrow inlet in the Red Sea, with Saudi Arabia to the east and the Sinai Peninsula to the west. At its southernmost tip, where it spills into the Red Sea, is the Strait of Tiran, which is of vital geopolitical importance since it controls access to the Jordanian Port of Aqaba and the Israeli Port of Eilat. There, between Egypt and Saudi Arabia, lie the islands of Tiran and Sanafir. While both are small, barren, and uninhabited, their unassuming stature belies their geostrategic importance.

The original sovereignty of the islands has been a matter of lengthy and complex legal wrangling. Saudi Arabia notes that in 1950, King Ibn Sa’ud asked Egypt to occupy the islands in an attempt to prevent Israeli occupation. Egypt’s position is that the islands of Tiran and Sanafir had constituted Egyptian territory since the delimitation of the frontier between Egypt and Palestine in 1906, 26 years before the founding of Saudi Arabia, and, indeed, that Egyptians had been occupying and navigating the Red Sea since the 15th century BCE.

In April 2016, Egypt appeared to settle the issue; Egyptian Prime Minister Sherif Ismail and Saudi Arabian Deputy Crown Prince and Defense Minister Mohamed bin Salman signed an agreement “returning” the islands to Saudi sovereignty during King Salman bin Abdel Aziz’s visit to Cairo.

In retrospect, the Egyptian government should have seen trouble coming. There was an immediate national uproar. A prominent group of lawyers (two of whom would later run for president) immediately filed a suit to challenge the agreement. The issue extended beyond mere nationalism. The vast majority of Egyptians were keenly aware of Saudi Arabia’s financial support. Indeed, many Egyptians had a love/hate relationship with Gulf Arabs in general; they loved their money but resented having to need it. That fed directly into their feelings about their own government. Egyptians were aware that this vulnerability to foreign financing was a direct result of their own government’s inability to rectify Egypt’s economic failings.

President Sisi had to come out and defend the move; he insisted that talks over the transfer had actually begun 26 years earlier, in 1990, and that Egypt had not “sold a grain of sand” but merely returned land “to its owners.” The Egyptian public remained unconvinced, particularly in light of promised Saudi investment in Egypt. Over the next two years, the case wound its way through the courts and parliament, finally grinding to a halt in the Supreme Court (SC) in March 2018. The SC threw out all challenges, clearing the way for the islands’ being ceded to Saudi Arabia.

Peace treaty terms get in the way

That was eight years ago. In the interim, the saga has taken even more complex twists and turns. While the deal might have had to contend with an outraged Egyptian public, its success was actually contingent on another player that had largely been flying under the radar: Israel.

When Egypt and Israel signed the Peace Treaty in 1979, Tiran and Sanafir were tucked away in the paperwork. According to the terms, the islands must be demilitarized and overseen by the Multinational Force and Observers (MFO), an international peacekeeping mission partially funded by the United States. Egypt might have given up the islands but the move was largely nominal unless Israel signed off. And Israel had no formal relationship with Saudi Arabia.

Enter the United States. In June 2022, Axios reported that the US, Saudi Arabia, Egypt, and Israel were all working on a complicated mélange of agreements that would enable the transfer to go through as long as everyone got what they wanted. Israel needed its security requirements guaranteed and agreed to the transfer in principle, on the condition that the islands remained demilitarized, that the MFO remained in place, and that access through the Strait of Tiran remained unimpeded. The US wanted a foreign policy win, preferably in time for President Joe Biden’s upcoming visit to the region, Egypt wanted to fulfill its promises, and Saudi Arabia wanted its islands. There was a lot at stake. If the deal was successfully ironed out, it would help gently thaw relations between Israel and Saudi Arabia, potentially moving it further along the path to Biden’s foreign policy holy grail: normalization between the two countries.

Like many of Biden’s foreign policy aims, however, it failed to deliver. Two details cropped up that seriously complicated matters. The first was that Saudi Arabia wanted the MFO off the islands. That took some wrangling but eventually, it was decided, with Egypt and Israel, that they would join the main body of the force on Egypt’s Sinai Peninsula and that cameras would be installed to monitor the islands and the Strait. This prompted Biden to announce, rather precipitously, as it turned out, that he was “optimistic” about the prospects for upcoming normalization.

The second obstacle was something of a knock-on effect of the first, and it has proved more difficult to overcome. In 2022 the Egyptians raised objections of a “mostly technical nature,” according to Israeli officials who spoke with Axios. Those officials also said they thought that the Egyptians raised the objections mostly due to Egypt-US bilateral relations, particularly dealing with US military financing to Egypt. Earlier that year, the Biden administration had frozen almost 10% of the $1.3 billion allocated to foreign military financing (FMF) for Egypt, citing human rights concerns.

According to a senior Egyptian official who spoke anonymously due to the sensitivity of the issue, this was not the case. “It had nothing to do with the financing,” they said. “It had to do with security. The cameras that Saudi Arabia wanted to use, in coordination with Israel, were, of course, more advanced than the old ones and they essentially expose all of Sinai. The security apparatus just couldn’t agree to it. So it’s back to the drawing board.”

No shortage of complications

It is very likely that the long wait for resolution of the status of the islands was a catalyst for a simmering tension in Egyptian-Saudi relations but it was not the only one. There has also been friction over the Red Sea Council, initially an Egyptian-led initiative that was presented in 2017 but was gradually taken over by Saudi Arabia a year later. Again, there was a divergence in outlook. Egypt had originally envisioned a forum for littoral states to discuss matters of mutual interest, like development or environmental sustainability and conflict prevention and resolution. Saudi Arabia wanted to focus on security, showed little interest in trade or the environment, and pressed for a body whose organization would mirror that of the Gulf Cooperation Council.

It all added up. Emad Eddin Adib, a well-known Egyptian-Saudi media personality who is extremely close to the Saudis, wrote a series of articles in 2022 criticizing Egypt’s economic policies, which were generally viewed as Saudi criticisms. The series got progressively more strident until an equal and opposite reaction was triggered among Egyptian columnists. The last straw was a blistering article in February 2023 by the editor-in-chief of Egyptian newspaper Al Gomhouriya, Abdel Razek Tawfik, that lambasted Saudi Arabia. At that point, the Egyptian administration apparently decided enough was enough and stepped in. The newspaper carried an apology the next day and the article disappeared from the website. Sisi personally stepped in to do damage control. He touted Egypt’s “excellent” relations with its neighbors, saying, “If we have nothing good to say, we should remain silent,” and adding, “We also must not forget the support our brothers have given us.”

Egypt has since been working hard to prevent fissures from becoming cracks, with apparent success. In February, the Saudi minister for energy, Prince Abdelaziz bin Salman, stressed that Egypt and Saudi Arabia were “one homeland.” Two months later there were new joint industrial and economic initiatives.

A solid Egyptian-Saudi relationship is in everyone’s interest — their sheer size and demographic heft help ensure regional stability. The region has always been on the fractious side, at best, and the last two years have been enormously turbulent. Regional relations are shifting and cannot be taken for granted. It has hardly escaped the attention of the Gulf countries that a few months after an apparently wildly successful visit by President Donald Trump, the US joined Israel in its attack on Iran, neatly opening them up to Iranian aggression. The conflict in Gaza has harpooned any chance of Israeli-Saudi normalization in the near future. In fact, it has more or less ensured that Saudi Arabia, which had been only nominally invested in pushing for a Palestinian state, now refuses to discuss normalizing without one. And the Israeli-US attacks on Iran have brought home the fact that it was an oversimplification to think of the current US administration as merely transactional. As far as the region is concerned, it is also highly unpredictable, and predictable relationships, even those causing occasional irritation, are highly prized.

The islands are still a fly in the relationship ointment, though. In May, Egyptian lawyers filed a new suit against transferring sovereignty of the islands. Regional diplomats have told Mada Masr that Washington and Tel Aviv would like to secure a permanent military presence for the US on the Red Sea, farther north from Camp Lemonnier, the US Naval Expeditionary Base in Djibouti. Saudi Arabia would like to be able offer the US a home for that base. That has direct implications for Egypt. A gently blossoming security relationship between Israel and Saudi Arabia is not high on Egypt’s wish list. In the immediate light of Israel’s current regional military spree, it is not an imminent possibility. But it remains a potential one, if regional matters calm down and if there is some sort of resolution to the Gaza conflict, one which would at least allow Saudi Arabia to tick a few boxes. The Abraham Accords and recent tensions over Gaza notwithstanding, Egypt’s security relationship with its neighbor remains a bedrock of regional stability. There is also the matter of the increased troop deployments in the Sinai that Israel agreed to while Egypt was battling Islamist insurgents — it would rather not have to relinquish them.

Another vital consideration is the financial aspect. A beefed-up US military and security presence in the Red Sea might make China and Russia jumpy, and Egypt is heavily reliant on them, particularly China, to boost investment and development in its Suez Canal axis. Additionally, both countries have extensive networks and relationships in the Horn of Africa, which Egypt sees as essential to its interests.

Prospects

Worried as Egypt might be about the security arrangements, and, more importantly, about possibly being edged out, it will eventually have to accede — it signed an agreement, and Egypt sets store by always abiding by its agreements. The question will be what to ask in return. If Egypt ever wants to get out of its cycle of rushing to secure financing to patch up holes in its economy, it will have to think outside the financial box and consider the long term. A solid Egypt-Saudi relationship helps secure regional stability, which ultimately should be desirable for everyone. In increasingly turbulent times, priorities need to be carefully calibrated.

 

Mirette F. Mabrouk is a Senior Fellow at the Midde East Institute.

Photo by USGS/NASA Landsat/Orbital Horizon/Gallo Images/Getty Images