Forty years on from the signing of the Camp David Accords, Egyptian Foreign Minister Sameh Shoukry sheds light on the dynamics behind the evolving strategic partnership
between Egypt and the United States.
Egypt and the United States share a long history of mutual interests, with the strategic economic, political and security partnership between the two countries now stronger than ever.
Few bilateral relationships have deeper roots than those between Washington and Cairo. With spheres of interest across Africa, the Middle East and even beyond, Egypt has proved an indispensable partner for the U.S. in the Middle East, most notably in the global fight against terror and extremism, a fact which has not gone unrecognized by the Trump Administration. Just last September during the UN General Assembly, U.S. President Donald Trump described the role of President El-Sisi as “outstanding” in confronting the global menace, putting Egypt “at the forefront” in an ongoing battle.
This came shortly after U.S. Secretary of State Mike Pompeo authorized the release of military aid to Egypt to boost its defense and security capabilities in the region in order to bolster national and regional security, calling the U.S.-Egypt relationship “one of our deepest and broadest partnerships in the region.”
Sameh Shoukry, Egypt’s Foreign Minister, explains: “The conflicts that exist in Syria, Yemen, Libya and the threats and dangers of terrorism are all challenges that we deal with through coordination and cooperation with the United States. We share common interests when it comes to maintaining peace and security in the region.”
Egypt’s strength as a longstanding arbiter of peace in the Middle East and beyond has gained further credibility due to its achievements at home. It has been just over two years since the country signed a $12.4 billion deal with the International Monetary Fund (IMF), putting into place initiatives such as the liberalization of the currency, restructuring of energy subsidies and austerity measures to rebalance the budget and thus the economy.
While these reforms have caused hardships, they have been at the same time, regarded as necessary to the reform of the economy. “The stability of Egypt itself has been demonstrated by what it steadily endured and accomplished in the last few years, particularly in terms of regaining the competence of the institutions of government and their responsibility towards the Egyptian people,” says Minister Shoukry.
Just last January, IMF managing director Christine Lagarde heralded the country’s progress on the economic front, noting that “Egypt has made substantial progress as evident in the success achieved in macroeconomic stabilization. Its growth rate is now among the highest in the region, the budget deficit is on a declining trajectory, and inflation is on track to reach the Central Bank of Egypt’s target by the end of 2019. Unemployment has declined to around 10 percent, which is the lowest since 2011, and social protection measures have been expanded.”
Egypt remains a steadfast emerging market; its name is no longer synonymous with risk for U.S. and global investors. The annual Gallup Global Law and Order poll, published in June 2018, ranked the country 16th out of 135 countries in terms of safety, making it the safest country in Africa and even safer than the U.S., which ranked 35th.
“Our economic relationship with the U.S. is supported and enhanced by our strong political ties today, and the mutual desire is to continue cooperation in the economic sector at higher levels. It has been beneficial, to both Egypt and the United States, therefore they continue to explore advantageous avenues,” clarifies Minister Shoukry.
Indeed, even before the reforms, Egypt has long been a preferred destination in the region for U.S. commercial interests. American foreign direct investment (FDI) in the country stood at $22.2 billion as of the financial year 2016-17, equivalent to a staggering 38.6 percent of the U.S.’ total FDI in Africa. Meanwhile, in the Middle East, Egypt comes only second to the United Arab Emirates. Today, the government sees attracting as much as $11 billion in FDI in the current financial year – up from $7.9 billion last year and a clear sign of growing investor confidence in the recovering Egyptian economy.
“Major American companies are heavily invested in Egypt and have been here over the last 40 or 50 years, and in general, they have been rewarded quite handsomely by their operations in Egypt … President El-Sisi has also always shown a high degree of receptivity in meeting with interested American companies, and
in highlighting the opportunities that exist in Egypt; the investment opportunities,” Minister Shoukry explains, adding that “with the current discoveries of huge gas reserves [in the Zohr offshore field], Egypt can be an energy hub for the eastern Mediterranean, Europe and beyond.”
Commerce is tightly bound into Egypt’s DNA, with a trading history that spans over five millennia. For American investors, the country represents not only a 100-million strong domestic market, but also a hub through which they can access major markets without tariffs as a result of a number of preferential trade greements with the Arab countries, the EU, Turkey, and the COMESA, SADC, and the EAC blocks, which together comprise 26 African countries.
“The Suez Canal corridor provides for American companies a base to expand production lines and to take advantage of the free trade arrangements that Egypt has with the Arab world and also with Africa. The Continental Free Trade Area (CFTA) is another additional element that can be attractive to U.S. companies to be based in Egypt and expand into Africa. All components of a solid Egypt-U.S. relationship are on track to mutually benefit both sides,” notes Minister Shoukry.
This tight regional integration will come into sharper focus this year, as the country assumed the leadership of the African Union. In his keynote speech as he took the helm of the bloc, President El-Sisi underscored the need for greater regional integration, economic ties and investment within the continent, calling for the CFTA to be put to its full use.
Meanwhile, the Trump Administration recently unveiled its Africa strategy as yet another opportunity for Egypt to shine as both a trusted partner and a core economic and socio-political power hub. The strategy’s aims, which include enhancing U.S. trade and commercial ties with African nations through arrangements that benefit both sides, and countering the threat of terrorism, play to Egypt’s strengths, while U.S. companies, which already have a base in the country, will increasingly be able to use it as a springboard into the rest of the continent.
“We have very special things happening, our relationship has never been stronger, we are working with Egypt on many different fronts including military and trade,” President Trump recently said.