Sisi Seeks Investments With Bin Salman at Suhoor on the Tiran and Sanafir Table

During a surprise visit to Jeddah city, the President of the Egyptian regime, Abdel Fattah el-Sisi, met with the Saudi Crown Prince, Mohammed bin Salman, for a pre-dawn suhoor meal on April 2, 2023. This meeting followed weeks of heated exchanges between their respective media outlets and online troll armies.

The meeting came after a sharp crisis and a cooling of relations, as the kingdom refused to provide new grants without any reciprocal benefits to financially struggling President Sisi. The kingdom instead imposed conditions for providing aid, as explained by its Finance Minister, Mohammed al-Jadaan, according to Reuters on January 18, 2023.

All media reports from both countries indicate that Sisi and bin Salman had general discussions, such as “prospects for joint cooperation and ways to enhance and develop it in various fields,” according to the Saudi Press Agency, without revealing further details.

The Egyptian government and private newspapers agreed that the meeting’s aim was to “dispel rumors of strained bilateral relations and refute the lies of troublemakers, showcasing the depth of the relationship and common coordination.”

The Egyptian presidency stated that the meeting’s goal was to “praise the close and distinguished historical relations between the two sister countries and continue coordination and consultation on regional and international developments,” without providing further details.

According to Egyptian media, Sisi has visited Saudi Arabia 14 times since taking office in June 2014, and his latest visit on April 2, 2023, marks his 15th.

 

Tiran and Sanafir

However, Egyptian diplomatic sources said that the purpose of the visit was to resolve the crisis that caused the recent media battles, which was the delay of Egypt in handing over the islands of Tiran and Sanafir to Saudi Arabia, as they were linked to a large aid package that would help Egypt overcome its economic difficulties.

The sources explained to Al-Estiklal that the presence of the head of the intelligence service, Abbas Kamel, with Sisi, and the attendance of the Saudi National Security Advisor, Musaad bin Mohammed al-Aiban, at the meeting, was to finalize the last details and security arrangements for the islands’ handover.

However, the Saudi support is not innocent and may be an investment rather than an aid package that would benefit Egypt by allowing it to purchase Egyptian assets worth billions of dollars that it needs before the next review of Egypt’s economic plans by the International Monetary Fund.

On the other hand, Reuters reported on April 3, 2023, that Sisi visited Saudi Arabia because he is under financial pressures and regional alliances.

The report stated that this visit comes as Cairo seeks to get billions of dollars of foreign direct investments from Riyadh.

It also noted that the kingdom has always provided financial support to the Sisi regime to help it confront the Muslim Brotherhood, but Saudi Arabia no longer offers such support without conditions, which has caused a rare media clash between the two countries.

The report suggested that Sisi visited the kingdom to benefit from Saudi Arabia’s new policy related to moves to ease tensions with Syria, Iran, and Turkiye, which is the same policy that Egypt is pursuing to tackle its severe economic crisis.

Days before the visit, political expert Dr. Khalil al-Anani said that the underlying reasons behind Sisi’s reluctance to transfer Tiran and Sanafir extend beyond technical issues.

In a study published on the Arab Center Washington DC website on March 29, 2023, al-Anani explained that the essence of the dispute lies in the package of financial and economic support that Sisi expected from Mohammed bin Salman in exchange for the two islands.

He emphasized that the Sisi regime is exploiting the issue of Tiran and Sanafir to achieve political and economic gains, and it is likely that the regime will proceed with the transfer of the islands to Saudi Arabia in the coming months after securing these gains.

Al-Anani noted that this support was expected by Sisi to deal with the severe economic crisis that Egypt is currently facing with unprecedented levels of inflation, external debt, and poverty, but senior Saudi officials set conditions for such assistance.

When Sisi announced the transfer of the islands to Saudi Arabia in 2016, it was accompanied by huge financial and economic agreements signed between the two countries in April 2016.

These agreements included nearly $22 billion in economic, financial, and oil aid, which led Egyptian analysts and commentators to speculate that the transfer of the islands was one of the components of the financial package, according to al-Anani.

However, Sisi’s heavy reliance on external financial and economic aid raised concerns among Saudi officials about the long-term sustainability of the Egyptian economy.

They saw that Sisi’s reliance on external debt and foreign financial aid had a detrimental effect on the Egyptian economy, which suffers from significant structural problems, particularly given the unprecedented level of external debt and the lack of foreign investment.

Therefore, the Saudi government began to reassess its financial aid to Egypt, changing it from grants and deposits to investments in government companies and institutions, and this policy shift led to tensions between the two countries in recent months, according to al-Anani.

 

No Blank Checks

In October 2022, Sisi had confirmed in previous statements that Gulf aid had stopped completely. Sisi sent an implicit message of blame to Gulf countries during the Egypt 2022 economic conference, saying: “Brothers and friends have the impression that the Egyptian state is unable to stand again,” so they decided to stop aid.

In December 2022, Egypt signed a $3 billion rescue plan with the International Monetary Fund, targeting direct foreign investments worth $9.7 billion in the fiscal year ending in June 2023, but it did not materialize. According to reports, Gulf countries have provided Egypt with $92 billion since Sisi’s coup in 2013 against elected President Mohammed Morsi.

The numbers published on the Saudi government aid platform show that the kingdom has provided more than $64 billion in the form of aid to about 167 countries around the world, the majority of which was in the form of developmental aid. Egypt ranked first in total aid amounts with about $13.7 billion, followed by Yemen with about $10 billion and Pakistan with $7 billion.

Hours before Sisi’s trip to Saudi Arabia, The New York Times shed light on Egyptian–Saudi relations, confirming that there are no more Saudi blank checks.

On April 2, 2023, it said that Saudi Arabia used to send money to countries like Egypt with few conditions, as a regional ally that was seen as important and could not be neglected.

However, a significant shift occurred as Egypt slipped deeper into its crisis, with Saudis sending a strong message: no more blank checks, and the kingdom began to tighten the noose on aid to Cairo and others despite Egypt’s deep economic crisis.

According to the American newspaper, bin Salman is placing increasing conditions on such aid, insisting that Egypt carry out economic reforms such as reducing subsidies and privatizing state-owned companies. Experts have been quoted as saying that Saudi Arabia used to see Egypt as too big to fail, but it now appears that the kingdom is no longer willing to give Egypt unconditional aid.

 

A Cluster of Crises

A study by Al-Masar Studies, published on February 10, 2023, sheds light on the motivations and contexts behind the Saudi–Egyptian dispute, referring to what it called Riyadh’s discomfort with the policies of the Egyptian regime managing the country’s economy.

According to the study, while the July 3 regime in Egypt is calling on Saudi Arabia and the Gulf states in general to help it with its ongoing economic crisis, these countries, led by Saudi Arabia, are not responding to Sisi’s government as he wishes and has been accustomed to since 2013.

The study pointed to several reasons for this tension, including the diversion of some Saudi investments to Turkiye and Saudi Arabia’s preference for investing in Turkiye over Egypt.

Another issue is the clash or differences in the economic projects of both Saudi Arabia and Egypt, where Saudi Arabia is competing with the Egyptian–Israeli project to provide gas to Europe by developing the Marjan and Berri fields to produce 550,000 barrels of oil per day.

The project also includes the establishment of a gas liquefaction plant with a capacity of 2.5 billion standard cubic feet of natural gas, which includes the production of 360,000 barrels of gas liquids rich in ethane and heavier components, with investments of $18 billion; this poses a challenge to the Egyptian–Israeli gas axis.

Another controversial issue is securing the Red Sea and who has the upper hand there, given that the United States has entrusted the leadership of the Joint Maritime Force 153 to the Egyptian armed forces, not Saudi Arabia, as part of their competition.

The delay in delivering the islands of Tiran and Sanafir, a part of the ongoing crisis between Cairo and Riyadh, is also a point of dispute.

In the past few months, there have been signs of dissatisfaction or frustration from Gulf supporters of Sisi, due to his poor management of grants and gifts and his constant need for new grants, while they want Egypt to rely on itself and stop asking for assistance from them.

The important question, according to a previous report by Al-Estiklal, is to what extent can the Gulf states maintain their support for Sisi in light of indications of the deteriorating situation in Egypt and the rising public anger?

Are they willing to risk exposing the current Egyptian regime to political shocks that may sweep it away and possibly bring revolutionary forces back to power, while their original intervention to support Sisi was aimed at preventing this scenario that emerged after the 2011 revolution?

Egyptian researcher Khalil al-Anani answered this by affirming in an article on the Middle East Eye on January 19, 2023, that the Gulf will not abandon Sisi in order to help them seize Egypt’s assets.

He stated that the Gulf is considering Sisi as a reliable partner in maintaining regional stability, which is particularly important for Saudi Arabia and the UAE.

He explained that the relationship between the Gulf states and the Sisi regime may be tense, but it is unlikely to end completely, because it is still seen as a preferred option because it allows for the greatest benefit to those countries’ interests.