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Sunday, 12 August 2012 04:43

Role of economy in Egypt's foreign policy

Having passed the heat of recent months, Egypt has gained a relative stability. Violence of the tumultuous days has very much given its place to tranquility in Egyptian cities. Mohammad Morsi has been elected as the first president after the overthrow of Hosni Mubarak. Morsi appointed Hesham Qandil as the new prime minister.

Many issues are ahead of the new president and premier of Egypt one of the most challenging ones being foreign policy. There is no doubt that the current circumstances of Egypt especially the country's economic conditions have a determining role in directing its foreign policy. Some experts considered the first aim of Muslim Brotherhood of introducing Khairat Al Shater, as the first presidential candidate, to be his familiarity with economy; since he is a skillful merchant.

Prior to Mubarak overthrow, Egypt's economy fell into trouble and the revolutionary conditions of the recent 1.5 years intensified the problems. Unemployment in Egypt is 14 percent and about 700 thousand people are added to the country's list of unemployment annually. Poverty has spread in Egypt and the rate of the poor population in the country has increased. The daily income of 40 percent of Egyptians is less than a dollar and out of the 84 million Egyptians about 50 percent live beneath the poverty line; that is, the income of half of Egypt's population is about 2 dollars per day. Generally, the life standards and human development indexes have decreased. Under present circumstances, Egypt has a 150 billion dollar debt. Budget deficit has reached 10 percent of gross domestic production.

In 2011, the entry of asset reduced by 90 percent. Tourism industry, as the main part of Egypt's income, has faced recession. The trading balance deficit ups to 30 billion dollars and the growth of national gross income has reduced from 8.3 percent to one percent.

This chaotic economic situation resulting from Mubarak regime policies and also the developments of the past one and a half years has seriously increased the need for absorbing foreign investment. Under current conditions, absorption of foreign investment is possible only through interaction with regional and trans-regional powers.

President Mohammad Morsi and Prime Minister Hesham Qandil are forced in the initial years of their coming to power not to create much change in Egypt's foreign policy. As for the regional policies of Egypt, they should move to interaction with the regional states. Morsi declared that he has placed cooperation with the Arab and African states in the priority of his foreign policies. He announced formation of a joint Arab market as the main element to the cooperation which indicates the importance of economy for pushing forward the new Egyptian foreign policy.

Despite all Saudi obstructionisms in the revolution of Egyptian people and explicit support of Al-Saud for Ahmad Shafiq in the presidential run-off election, Morsi’s first foreign trip as president was to Saudi Arabia. Since the time of Mubarak reign Saudi Arabia has had great influence in a large part of Egypt's economy. It is said that the Saudi companies have invested as much as about 30 billion dollars in Egypt.

It seems that the most important change in Egypt's regional policy is in respect with the Islamic Republic of Iran and the fabricated Zionist regime. Evidence shows that the relations between Egypt and the Islamic Republic of Iran will be gradually expanded despite overt and covert opposition of regional players like Saudi Arabia and most of trans-regional players. These relations can have considerable economic achievements for both countries in addition to significant political concessions. Regarding relations with the Zionist regime, it is predicted that the country's relations with the Zionist regime will be frosty; in other words, a sort of cold peace will encompass the relations between the two sides.

Like the time of Mubarak regime, the new Egypt is in need of foreign loans, investments and aids. The need prevents the Egyptian government from moving towards challenges with trans-regional powers. For this reason, despite the US obstructionism to prevent the victory of the revolution, once again Morsi became the host of US secretary of state Hillary Clinton in his presidential palace. This does not mean that the new Egypt like the time of Mubarak will be dependent on the west; but Morsi and the new government of Egypt will try to put independence and pragmatism instead of dependence and lethargy in foreign policy.

The important issue is that the new Egyptian government is in need of more time in most arenas including foreign policy. Change in foreign policy is a mid-term issue and should be carried out gradually to reduce the western states influence on Egypt's economy. In other words, the foreign policy of the new Egypt will move with a slow pace and although it will come across certain changes, the changes will be made cautiously.

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