The war (in Sudan) and terror (by ISIS and the Houthis) are Egypt's primary problems. The conflict between Israel and Hamas, on the other hand, is a silver lining: its continuation allows Cairo to maintain its status as a highly influential mediator.
Even in good times, Egypt is not a country with a bright future. Overpopulation, pollution of the Nile River, an inefficient agricultural sector, corruption, poverty, and terror all threaten the future of the world's most populated Arab country. However, if its future is generally not bright, it has become particularly bleak in the past year.
It is not the war in the Gaza Strip that is to blame for Egypt's problems but rather the civil war in Sudan. In Egypt's neighbor in the south, a civil war rages between two rival factions in the military junta. Because of the war, as of the end of 2023, approximately 370 thousand Sudanese refugees have been living in Egypt. Because there is no foreseeable resolution to the conflict, the number of refugees in Egypt will likely grow. Sudan is a populated country in its own right – nearly 47 million people live there. The civil war is tearing it apart and sending refugees throughout the region.
The war in Gaza threatened to exacerbate the refugee problem in Egypt. In the early stages of the war, Cairo warned against any attempt to uproot the Palestinians in Gaza and transfer them into its territory. It swiftly deployed military forces to the border with Rafah and reinforced the fences there. After Israel's War of Independence, Egypt concentrated all the Palestinian refugees in the Gaza Strip, and when Israel conquered it, Egypt was relieved of dealing with them. Cairo is not interested in becoming a refugee home again, certainly not for interminable refugees such as the Palestinians. So, Egyptian President Abdel Fattah El-Sisi hastened to threaten war and ensure that Israel does not transfer the Gaza Strip into Egypt.
Egypt's concern about the Palestinian refugees is not only driven by considerations of the cost of humanitarian aid or pressure on infrastructure in Egypt. In the Sinai Peninsula, there is still a local branch of ISIS operating. The Egyptians are undoubtedly concerned that the arrival of two million refugees, many of them terrorists, will strengthen ISIS in Sinai with new fighters. Preventing the entry of refugees is also intended to prevent the strengthening of the terrorist organization in the Sinai Peninsula.
The third issue is the attacks by the Houthis in the Red Sea, which have led to a decrease of around 50 percent in the country's revenue from transit fees on the Suez Canal route. Egypt is experiencing significant losses due to the Houthis' aggressiveness but apparently is not willing to act against them. This is partly because it does not want to be perceived as aiding Israel and because of its fear of being dragged into a long and senseless war in Yemen for the second time in modern history.
But not everything is bleak in Cairo. Because of the war in Gaza, Egypt finds itself once again at the center of the diplomatic stage as an intermediary between Hamas and Israel. Internationally, Egypt is perceived as a stabilizing force, attempting to reduce tensions in the region. It is reasonable to assume that the decision of the International Monetary Fund (IMF) to approve a loan to Egypt stems, among other things, from its important diplomatic role: the United States wields significant influence in the IMF, and it is conceivable that Cairo has been receiving economic assistance in exchange for its mediation efforts.
The issue of refugees also brings assistance to Egypt. The European Union fears that if Egypt cannot handle the Sudanese refugees, they may attempt to immigrate to Europe itself. Therefore, the European Union has decided to sign an agreement for strategic cooperation with Egypt and allocate USD 8 billion to help it cope with the Sudanese refugees. This is not the first time that Europe has collaborated with African countries to try to stop illegal immigration from their territories: even Niger, until the military coup last year, was a significant partner in Europe's efforts to prevent immigration from West Africa and its center.
Moving forward, Egypt would likely welcome it if Israel ended the war in the Gaza Strip, withdrew, and allowed Hamas to return to power. Egypt is not a friend of Hamas, the local branch of the Muslim Brotherhood, but it must not be mistaken as an enemy of the movement. Egypt has used and continues to use its ties with Hamas as leverage against Israel and as a way to increase its prestige. Ending the war without eliminating Hamas's rule would humiliate Israel and leave Egypt in a position of power as an intermediary between Gaza and Jerusalem.
