Egypt is in the process of rebuilding its capabilities and its prestige. On October 18 and 19, 2015, it held the first round of its legislative elections, a process to be concluded on November 22-23, 2015, leading to the re-establishment of a new Parliament which will be co-equal with the Presidency — a Presidency with fixed terms of office — as a branch of government.
The Cold War was over when, in 1995, my book, the Defense & Foreign Affairs Handbook on Egypt, was published, noting in its introduction:
Egypt has always given the world insights into the lessons of history, should we care to learn from them, and the tools to move forward to secure a more positive future. It is not surprising as the world moves from the stable, superpower-dominated Cold War era to a more fluid, multipolar strategic environment, that Egypt should be the key to much of what will happen in terms of global security in the coming decades. The country is geopolitically placed at the nexus of trade routes, as well as the hub of several cultures and religions.
It has taken 20 years for that observation to become fully-formed and starkly real, and yet we still see that there is insufficient recognition of this geopolitical reality. Indeed, we are only now starting to see, in the post-post-Cold War world, a revival of geopolitics as a significant prism through which to view the world. We could equate the transformative process from Cold War to geopolitics to the move from the trench warfare in World War I to the open warfare which ended that Great War. From confined, stable, paralyzed or static conflict, to fluid, dynamic, and unpredictable opportunity. We have once again moved from static geostrategic competition to open, freeform geopolitics.
Egypt, on October 15, 2015, was elected, against heavy competition, to a vacant two-year seat on the United Nations Security Council. It was a measure of how far Egypt’s fortunes have revived; it received 179 out of 193 votes, on this, the fifth time Egypt has been elected to a non-permanent seat on the Se-curity Council. Its two-year tenure begins on January 1, 2016.
Every component of the Suez / Red Sea / Horn of Africa matrix of nation-states is a significant element in the overall framework, but Egypt has throughout history been the anchor of the region. This is not merely because, today, it owns the Suez Canal and the attendant geography which places it at the center of the Eurasian-Africa connection, but because of its historical civilization and traditional leadership role (which today contributes national identity and confidence, and tourism), as well as the depth of its edu-cational, manufacturing, and agricultural fabric. To that mix has now been added a highly-significant natu-ral gas sector.
But what is critical in re-evaluating Egypt’s role in what has been evolving as a new regional framework is to understand that Egypt’s context has changed. We saw a significant reduction in the relative strategic maneuverability of most of the region’s nation-states during the past couple of centuries, because of the overriding influence of major powers, from Britain, France, and Turkey, to the U.S. and the USSR. But what is critical today in looking at the relative weights of the players in the Mediterranean-to-Indian Ocean theater are the changes wrought by new economic factors and now, particularly, the reassertion of geog-raphy as a driver. Some of this also draws on the foundation of the normalization of relations with Israel, which Pres. Anwar as-Sadat also achieved in another interregnum between superpower engagement.
In the immediate perspective, Egypt’s economic growth rate has returned for fiscal 2015-16 to more than four percent per annum, after a decline during the period of the Government of Pres. Mohammed Morsi. Egypt is now poised, with the economic reforms underway, to grow at an even faster rate. The success-ful outcome of the March 2015 Egypt Economic Development Conference secured more than $60-billion worth of investments, loan agreements, and grants, and reinforced the Government’s commitment to continue the structural reforms and promote inclusive growth and restore investor confidence.
It is worth noting that Egypt’s GDP in 1993 was some $65.5-billion, which, adjusted for inflation to 2014 dollars, would be some $111-billion; and its population around 57-million. By 2014, the GDP was $286.54-billion, and its population was 88.4-million. In other words, its population has multiplied by 155 percent, and its GDP by 258 percent in that same period, a clear increase in per capita wellbeing.
The oil-dominated regional economy of the post-Cold War period had relegated Egypt to a lesser status; it had, to a great extent, become a precarious economy, and, in security terms, a client state of the Unit-ed States. The transformation of the global energy marketplace has now diminished the political power of the major oil producer states, therefore, in relative terms, raising Egypt’s standing. The series of re-gional missteps of the 21st Century by the major Western states, particularly the U.S., led to an increasing vacuum of external power in the region, which was concurrent with strong U.S., Turkish, and Qatari sup-port for the installation of a Muslim Brotherhood government in Egypt.
There is no need to dwell here on the process which led to the installation in mid-2012 and subsequent public rejection in mid-2013 of the Muslim Brotherhood’s Freedom and Justice Party (FJP) (Hizb al-Hurriya wa al-’Adala) Government of Mohammed Morsi, other than that the early refusal of the U.S. White House to accept the Egyptian rejection of the Muslim Brotherhood caused a watershed in U.S.-Egyptian relations. Moreover, the continued U.S., Turkish, and Qatari insistence of support for the now-exiled Mus-lim Brotherhood — which remains committed to an armed struggle against the Egyptian State — has made Cairo cautious about Washington, and hardened against Turkey. There is no doubt that the present Turkish Government under Pres. Reçep Tayyip Erdo?an remains committed to working against Egypt. This is a significant, but rarely discussed, factor in Egypt’s security framework, and may diminish if Tur-key’s November 1, 2015, elections remove Pres. Erdo?an’s AKP from control of the Parliament. But a new Turkish Government may still find itself struggling against the Presidency for control of strategic policy.
As a result of the process to this point, however, Egypt had begun, by 2014, to strategically distance itself somewhat from the United States and Washington, although many in Washington did not initially seem to even understand that the seismic shift has been made. Egypt had begun, in 2014, reviving eco-nomically and strategically, and promised to transform the Suez-Red Sea strategic maritime environment. Meanwhile, the U.S. White House still supports the opponents of Egypt — particularly Turkey, Qatar, and the Muslim Brotherhood — while now attempting to rebuild U.S.-Egyptian relations, particularly with the August 2, 2015, U.S.-Egypt Strategic Dialogue.
By mid-2015, the new strategic reality in the Middle East still did not appear to be grasped fully in Wash-ington: Egypt had broken its strategic dependence on the United States. And, once again, no-one in Washington noticed. Once again? Let us begin with the first episode.
It was on April 9, 1972, that I debriefed a source who had returned to the U.S. from Cairo with startling news from his meetings with senior Egyptian Defense Force commanders: The Egyptian Government of Anwar as-Sadat would terminate its strategic relationship with the Union of Soviet Socialist Republics (USSR) within six months, and all Soviet advisors would be asked to leave Egypt. And yet Egypt was, at that time, 100 percent dependent on Soviet military equipment, advice, and aid.
The source was impeccable; his access was unquestionably top-level (and his relationships in Cairo were on a personal level; he was not a U.S. Government official). The information was used in the second edi-tion of our weekly Defense Newsletter briefing, published on April 10, 1972. It was distributed to the yawning disinterest of some and the angry incredulity of others in Washington, DC: This could simply not be the case; Egypt was locked in to the Soviets and had no recourse or strategic maneuvering room. Egypt, for Washington, was irretrievably in the enemy camp.
Less than four months later, on July 18, 1972, Pres. Anwar as-Sadat did indeed evict the Soviets. The U.S. was, in any event, preoccupied and still failed to pick up the threads. U.S. Secretary of State Henry Kissinger was deeply engaged in negotiations with North Vietnamese officials, led by Le Duc Tho, in Par-is; the Vietnam War was winding down; the U.S. Administration of Richard Nixon was negotiating the Strategic Arms Limitation Treaty (SALT I).
Just over a year later, on October 6, 1973, Egypt launched its military offensive against Israel — with its existing Soviet equipment, but without Soviet support and without any supplies of spare parts or Soviet servicing for more than a year — to recover control of the Suez Canal and the Sinai. The war transformed Egypt. The U.S. — with the Camp David Accords signed on September 17, 1978, following Anwar as-Sadat’s peace offensive with Israel and his visit there in 1977 — began to pay attention to the reality that Egypt was not in “the enemy camp”.
What Pres. Sadat had successfully done was undertake a two-stage transformation of Egypt’s strategic position in such complete secrecy that, despite the massive, national-level nature of the preparations for each stage, had gone unnoticed by the Soviets, the U.S. and NATO, and by Israel. When he inherited the leadership of Egypt, with the death of Gamal Abdel Nasser in 1970, the nation was still in the grip of de-pression as a result of the humiliating Six Day War with Israel (June 5-10, 1967). Sadat inherited a military force in which just six percent of its officers had a university education.
By 1973, when the next war began, more than 60 percent of Egyptian officers had received, or begun, university education. The Egyptian military had gone from a system which had totally eschewed initiative at all levels to one which began to think.
Sadat transformed the global strategic framework by moving dominance over the Red Sea/Suez from Soviet influence and ensuring that the Suez could re-open; he transformed Egypt’s economic and military framework; and he achieved peace with Israel. And no major foreign power knew what he was planning until he executed his strategies.
Egypt’s current President, Abdul Fatah Saeed Hussein Khalil al-Sisi, has demonstrated that he has Sa-dat’s strategic grasp and courage. He moved on July 3, 2013, to terminate what had been a blatant dis-tortion of a democratic process which — with the strong insistence of the U.S. Barack Obama White House — had put in place a Muslim Brotherhood Government under Pres. Mohammed Morsi. In subse-quent elections, on May 26-27, 2014, former Gen. al-Sisi was overwhelmingly elected to the Presidency.
Pres. al-Sisi has transformed Egypt, while Washington, essentially, ignored him. Apart from significant economic initiatives to revive the country after a devastating year of collapse under Morsi, the Govern-ment of Pres. al-Sisi has begun to rebuild Egypt’s strategic posture and future, essentially operating on the premise that Washington would, or might, no longer be a supportive ally.
To begin with, a new strategic framework is emerging in the region, with a bloc consisting of Egypt, Isra-el, Jordan, Saudi Arabia, Kuwait, and the United Arab Emirates. Egypt and Israel have the capacity to call on Russia; Israel has increasingly close relations with Greece and Cyprus, and Egypt, too, is coop-erating with Israel, Cyprus, and Greece on the exploitation of hydrocarbon resources in the Eastern Medi-terranean.
In October 2014, the Government signed the initial contracts on the $8.4-billion project which was de-signed to, within less than one year, deepen and widen the Suez Canal. This included the construction of a 50km parallel section of the canal to allow ships to transit simultaneously in both directions, and widen-ing and deepening a number of existing sections to a depth of 24m. Despite economic and security concerns, the Government took the risk to deliver the finished, wider canal for use by August 2015. It was, as we now know, completed on schedule, and stands to significantly increase the income potential of the Canal, Egypt’s most significant earner of foreign exchange, by expanding the through shipping from 49 to 97 ships a day.
Once it became clear that the Obama White House was using its military supply relationship with Egypt to attempt to enforce a relaxation of the Government’s ban on the Muslim Brotherhood, the Sisi Govern-ment began to discuss the prospect of buying non-U.S. military systems.
U.S. officials, when told of this development in 2014, laughed off the suggestion that Egypt could so easily replace — or operate without support — its extensive U.S. inventory, including its 250 or so Lock-heed Martin F-16 combat aircraft variants, its almost 1,500 M-1A1 Abrams and M-60A1 main battle tanks, and other systems.
They forgot how easily Sadat had replaced the Soviets, and that he had been able to continue military operations without immediately finding a new supplier state. The significance of the Egyptian military industrial community, particularly centered around the Arab Organization for Industrialization (AOI), was critical for that process.
Discussions with Russia for combat fixed-wing aircraft in 2014 did not yield results, but the Sisi Govern-ment had by that time begun negotiations with France for major combat systems. Much of these negotia-tions were delayed by the complexities of financing arrangements and Egypt’s struggle to rebuild its economy. The governments of Saudi Arabia, Kuwait and the UAE had immediately pledged nearly $20-billion in financial aid when Gen. al-Sisi won the presidency, and $12-billion was reportedly made availa-ble almost immediately. The current market turmoil has created a once in a generation opportunity for savvy energy investors. Whilst the mainstream media prints scare stories of oil prices falling through the floor smart investors are setting up their next winning oil plays. U.S. aid to Egypt under the Camp David accords amounts to only $1.3-billion a year.
So, then, quietly, the Egyptian Navy in late October 2014 ordered four Gowind 2500-type corvettes from the French shipyard, DCNS, in a 600-million euro ($684-million) deal. These vessels, at 102m (335 ft.) length overall (LOA) more like light frigates than corvettes, represented the first French ship order by the Egyptian Navy. It was a major step forward for the Egyptian Navy, and demonstrated that the Sisi Gov-ernment was not waiting for U.S. civil or military aid to move forward. Moreover, by September 2015, the Egyptian Navy was negotiating to buy a further two Gowind 2500-type corvettes, presumably to be built in Egypt.
The Egyptian Government, on February 16, 2015, went a lot further: it confirmed an order for the rapid delivery of a new 6,000 tonne disp. FREMM frigate, plus an additional vessel of the same class rapidly thereafter, and 24 AMD Rafale combat aircraft, in an order worth 5.2-billion euros ($5.9-billion). The move culminated months of negotiations over payment terms, but allowed the Egyptian Navy to take delivery of the frigate in June 2015 from the French DCNS shipyard where it had been undergoing completion for the French Navy as the Normandie. The ship was undergoing sea trials at the time of the contract, and it was handed over to the Egyptian Navy in operational condition by August 5, 2015. At the same time, the Egyptian Air Force took delivery of the first three of the 24 Rafales, out of French Air Force stocks, to enable their participation in ceremonies for the opening of the expanded Suez Canal in August 2015.
The Sisi Government wished to utilize the unveiling of the massive increase in capacity of the Suez Canal — funded by Egyptian public subscription — as a major step forward for Egypt, similar to the opening of the original Suez Canal in November 1869. Isma’il Pasha, the Khedive (ruler) of Egypt and Sudan, uti-lized the Canal opening to portray Egypt as a transformed strategic entity. Giuseppi Verde’s opera, Aïda, was written to celebrate the Canal’s opening, and its opening performance was at the Khedivial Opera House in Cairo on December 24, 1871. The greatest yacht in the world — the Mahrousa (still in commis-sion and now known as the el-Horia) — was built in London so that the Khedive could transit the Canal for the opening ceremonies, which were, rightly, of paramount interest to the global maritime community. Significantly, el-Horia carried Pres. Sisi through the new section of the Suez Canal when it was opened in August this year.
But let us get back to the new fighter order from France. It was for 16 Dassault Rafale B two-seat vari-ants and eight Rafale C single-seaters. It was possible that a total of six Rafales could be delivered in 2015, taking them from the final assembly line in Mérignac, where they were originally intended for the French Air Force. It was understood that the order would also include some Black Shaheen cruise mis-siles (with their range shortened to comply with the Missile Technology Control Regime limitations). This would make Egypt the third country in the region (with Saudi Arabia and the UAE) to have the missile. It was unclear whether the Meteor beyond-visual-range air-to-air missile (BVR AAM) would be part of the deal.
France benefited further, in late September 2015, when the Egyptian Navy bought the two 21,300 ton displacement BPC-210 Mistral-class helicopter assault ships for around a billion euros. At the same time, the Egyptian Government indicated that it would buy 50 Russian Kamov Ka-52 Alligator attack helicop-ters, including the naval variant of the Ka-52 — the Ka-52K Katran — for the Mistral warships. It is possi-ble that the acquisition of the Katrans might minimize the need for modifications to the Mistrals, which had been built for the Russian Navy. Each ship can accommodate 15 Katran helicopters.
[It is not a coincidence that Saudi Arabia also remained cool to the U.S. and it, too, in October 2015, said that it would open talks to buy French reconnaissance and communications satellites, patrol boats, and the setting up of a naval research center and a working group to study future naval projects. That commitment from the Kingdom was reportedly to be worth some $2-billion, and be concluded by the end of 2015. It would also include the acquisition, worth some $600-million, of 30 French-built 30 meter patrol boats. Certainly, Saudi Arabia is continuing some U.S. defense buys; it was, in September 2015, negotiating the acquisition of two U.S .Lockheed Mar-tin Freedom-class Littoral Combat Ships (LCS) (with an option for a further two), for the Royal Saudi Navy’s Persian Gulf fleet. However, it was also negotiating to buy two French frigates for the Red Sea fleet. Saudi Arabia was also currently finalizing details of a deal worth $1.9-billion to buy 10 Sikorsky MH-60R Seahawk helicopters, for anti-submarine warfare and other maritime du-ties.]
Egypt will clearly go much further down the path of reasserting its strategic independence, and now has the education base, the commercial sector, and the energy production which was not available to Pres. Sadat. When it built its defense industrial base, with the help of other Middle Eastern states (particularly Saudi Arabia), it also developed the capacity to build armored vehicles and aircraft, as well as a range of guided weapons. Much of this capacity atrophied under the U.S.-Egyptian alliance which had included the license manufacture of the French Alphajet advanced jet trainer/strike aircraft.
AOI is only part of the Egyptian military industrial capacity within the Ministry of Defense Production, and today has a workforce on its own of 15,000. Joint-venture companies, such as Arab-British Dynamics and Arab American Vehicles, produced advanced missiles (such as Swingfire and Milan) and vehicles. Other companies manufactured complete aircraft, aero-engines, and so on. AOI has teamed in the past with CATIC, of the People’s Republic of China, and Embraer, of Brazil, to build aircraft. It would not be surprising to see Embraer’s new KC-390 tanker-transport aircraft come under consideration to replace the Egyptian Air Force’s Lockheed Martin C-130H Hercules in the foreseeable future.
AOI and the Ministry of Defense Production should be expected to be moving now back into full produc-tivity. The fact that Egyptian shipbuilding facilities are being re-developed with French technical assis-tance shows that this is already taking place. AOI facilities are almost certainly taking up the slack in supporting Egypt’s now active air combat operations against Islamic Caliphate operatives based in neighboring Libya and in the Sinai.
Egyptian Air Force (EAF) F-16s struck Islamic Caliphate bases and fighters in Derna, Libya (between To-bruk and Benghazi) on February 16, 2015, in response to the beheading by Caliphate militants of 21 Egyptian Coptic Christian workers. The Libyan Air Force also struck at the sites in Derna, in apparent co-operation with the EAF. Significantly, the U.S. has refused to support the Egyptian and Libyan actions, further exacerbating the Cairo-Washington rift, but reinforcing Washington’s ongoing support for the Muslim Brotherhood.
The White House rift with the Egyptian Government flew in the face of historical U.S. interest in maintain-ing a hand in freedom of navigation — the global maritime commons — by ensuring that the U.S. ability to have a hand in the Suez Canal/Red Sea SLOC was diminished. And the White House action seemed predicated on ideological and religious grounds, rather than U.S. strategic interests.
This opened the door not only, once again, to Moscow, but to European states, such as France, which, in the space of a few months, added more than $6-billion worth of orders in the defense sector alone. That was to rise by more than a further billion dollars before the end of 2015. So the U.S.-Egyptian rift which will cost U.S. manufacturers — such as Lockheed Martin, Pratt & Whitney (United Technologies), General Dynamics, and others — billions is also reinvigorating the European defense industrial sector, and simultaneously deepening the U.S.-European rift. Moreover, the gradual move by Saudi Arabia to French military purchases is also part of the rift which the Kingdom has with Washington.
But what is certain now is that the U.S. has ended its almost four decades of strategic influence in Egypt. This, with attendant reduction in influence in the Mediterranean-Suez-Red Sea-Indian Ocean SLOCs — may be the most decisive loss for the U.S. global posture in recent years.
It would be my personal estimate that the Egyptian Navy will now look to start expanding its submarine force, a long-overdue requirement to increase its fleet of two German HDW Type 209 submarines, which had been expected to be supplemented by two more of the same type. The PRC, which held joint naval maneuvers with the Egyptian Navy in September 2015, has offered the S-20 export variant of the Type 41 Yuan-class diesel-electric submarine, possibly equipped with Air Independent Propulsion (AIP). AIP may be a cost-prohibitive step too far for the Egyptian Navy at present, but the S-20 does feature advanced noise reduction techniques including anechoic tiles, passive/active noise reduction, and an asymmetrical seven-blade skewed propeller.
These are the same type of submarines which Beijing has under contract for the Pakistan Navy, which has ordered eight of the class. There is a pattern here: the PRC views Pakistan as a stable partner in pro-tecting its Suez-Red Sea-Indian Ocean maritime trade. It is axiomatic that the PRC has a clear interest in maintaining and supporting stability and security of its sea trade all the way to the Mediterranean, and a sale of S-20s on favorable terms to Egypt would be a significant step in this. The PRC did, decades ear-lier, provide the four Romeo- or Ming-class SSKs to the Egyptian Navy; the history has already begun.
What continues to be demonstrated, then, is that Cairo is making its strategic decisions well outside the basis of its recent relationship with the U.S. This relationship had dominated its military policy planning from the time of the Camp David Accords in 1978 until the Obama White House essentially sabotaged U.S.-Egyptian relations in 2013 by supporting the Muslim Brotherhood Government of Pres. Morsi. What is significant is that the Egyptian Government clearly seeks to retain a positive relationship with the U.S., so the latest break is not similar to Pres. Anwar as-Sadat’s break with the USSR in 1972. Even then, Pres. Sadat did not entirely break relations with Moscow in favor of the U.S. or the West.
The current polite break with the U.S. — triggered by the Obama Administration’s failure to read the polit-ical methodology of Egypt which had been clear since the fall of the Monarchy to the Free Officers’ Movement in 1952 — was inevitable, given the U.S. decision to withdraw from its earlier military-oriented dominant position in the Middle East. That was in large part the reflection of the exhaustion by the U.S. with the Iraq and Afghanistan wars. But Cairo was clearly ready for change, and, as well, the parting ges-ture by Washington to support an assumption of power by the Muslim Brotherhood was not something the U.S. was prepared to support unequivocally. So when the Egyptians rejected Morsi, and the U.S. was unable or unwilling to insist on his retention, the emerging Egyptian Government was on a path for a new life outside the constraints of a superpower guardian.
Where does Egypt go from here?
It has moved in an incredibly short period of time through the phase of being a component of the U.S. network in the region; through the economic and social disruption of the Morsi period; to a position of growing prestige, capability, and promise. It is, de facto, part of a network of economies which are ex-pected to work increasingly closely, to include Israel and Jordan, Saudi Arabia, and the UAE. Egypt has a strong stake in ensuring the continued stability of Saudi Arabia, and in restoring calm to Yemen.
The opportunity exists, through regional investment and careful negotiation, for Egypt and Sudan to see a significant growth in available water from both the Blue and White Niles over the coming decades, suf-ficient to increase the agricultural as well as the hydro-electrical base of the region. The construction of the “new Cairo” could also invigorate the Egyptian economy.
Underpinning all of this will be the ability of Egypt to act as part of a stabilizing bloc on the region, something which is happening, de facto. The bloc of mutual interests, as discussed, includes Egypt, Is-rael, Jordan, Saudi Arabia, the UAE, Kuwait, and — as will become increasingly apparent — Ethiopia. There are major security as well as human and economic challenges to overcome, particularly to assist Saudi Arabia in stabilizing the Yemen situation before it ruins both Saudi Arabia and Yemen for decades to come. In all of this, Egypt may be able to persuade Saudi Arabia that its present efforts in Syria may be less than productive, and that the best way to stabilize and protect against Iranian influence would be through the creation of a broad new economic zone of progress which Iran could either welcome or ig-nore at its own peril.
Clearly, Egypt cannot be a beneficiary if Saudi Arabia and Iran engage in a protracted struggle. Egypt needs Saudi Arabia to be a stable littoral state on the Red Sea to ensure the growth of the Suez traffic. It also needs Saudi Arabia’s investments in Egypt over the coming decade.
The tools which Egypt may well employ over the coming few years could well include a strengthening of ties with Pakistan, also strategically placed on the Arabian Sea, and also now free — in a slightly differ-ent way than Egypt — to seek new solutions to its future. As well, Egypt is a major power in the regional intelligence field, and can use this capability to work with its neighbors in different ways. Clearly, there is a mutuality of interest between Egypt, Israel, Jordan, Ethiopia, Tunisia, some of the Libyan tribal leader-ship, Algeria, and Morocco, in countering extremist subversion. Other regional players, such as Kuwait and Oman, have a stake in this, as well, as do sub-Saharan states — particularly Kenya and Nigeria — which now find themselves facing the same enemies as Egypt.
This is a significantly new world, already, and Egypt has the geography and resources to be central to it.