Israel-Egypt Analysis: The long-awaited thaw is still not forthcoming

Many Israelis had hoped that President Abdel Fattah al-Sisi would take ground-breaking steps toward normalization; It still has not happened.

By
December 4, 2016 02:55
Israel Egypt

Prime Minister Benjamin Netanyahu welcomes Egyptian Foreign Minister Sameh Shoukry in Israel on July 10. (photo credit: MARC ISRAEL SELLEM)

Nearly 40 years ago, president Sadat made history by coming to Jerusalem, and the peace agreement followed two years later. Much is made in Israel of the strong security cooperation between the two countries regarding the fight against Islamic terrorism in northern Sinai. Egypt is far more discreet on the subject.

The “cold peace,” a term coined during the Mubarak years to describe the relations between the two neighboring countries, shows no sign of thawing in spite of a few gestures of goodwill lately. There is once more an Egyptian ambassador in Israel after four years and the embassy of Israel has reopened in Cairo – albeit on the grounds of the residence of the ambassador. Foreign Minister Sameh Shoukry made a high profile visit to Israel; furthermore, speaking to high school’s students in Egypt, he stated that Israel’s fight to defend itself could not be construed as terrorism.

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But that’s as far as it went, even if Cairo took the unprecedented step of sending two helicopters to fight the fires raging in Israel.

Many Israelis had hoped that President Abdel Fattah al-Sisi, having saved his country from an Islamic dictatorship, would take ground-breaking steps toward normalization. It has not happened (yet?).
Egypt's Sisi offers mediating role in Israel-Palestinian peace talks

It is as if Sisi is totally focused on the economic development of his country. He showed himself ready to endanger his regime by accepting the harsh conditions of the International Monetary Fund in exchange for a much needed $12 billion loan: floating the Egyptian pound and introducing VAT for the first time as well as canceling subsidies on staple goods.

Rising prices caused a great deal of discontent, but the expected mass demonstrations did not materialize.

The people understood that there was no other way to drag the country out of the abyss.



The president did not hesitate to open another front when he turned to the scholars of Al-Azhar University, the most important institution of the Sunni world, demanding that they reform the teachings of Islam and do away with the more extreme trends. Still reeling from the demand, they are still discussing what to do.

Can the embattled president go one step further and clear the way to a normalization which would not only contribute to regional peace but benefit the economies of both countries? Trade figures remain low – $150 million to $250m. a year, with a $500m. spike in 2010-2012 due to Egyptian gas exports to Israel – and are mainly if not exclusively restricted to deals between governments.

They stem from the agreement on Qualified Industrial Zones (QIZ) reached in 2004, enabling Egyptian textiles to enjoy custom free access to the United States under the umbrella of the free trade agreements between Israel and America, provided that 10.5% of the finished product originates from Israel. Egyptian exports rose from $200m. a year to more than a billion, giving work to some 700 companies employing a total of 280,000 people.

There were great expectations concerning the energy market. Hosni Mubarak had given his blessings to a joint venture between Egyptian businessman Hussein Salem and Yossi Maiman from Israel in association with the Egyptian National Oil Company, leading to the construction of an oil refinery in Alexandria to develop Egyptian oil production. In a matter of years both businessmen sold their shares in the project and turned to the export of natural gas to Israel. This mutually profitable endeavor came to an end in 2012 after a succession of terrorist attacks on the pipeline. Not that it would have gone on much longer, since gas reserves were running low because Mubarak had not invested in the necessary research and development operations.

Now a new natural gas deal is on the table, but in the opposite direction: exports from the Israeli Leviathan gas field due to start in 2019 through an intricate mix of international companies.

There is no guarantee that it will come to fruition, since new fields have been discovered in Egypt.

For many years, tourism had flourished – though the flow was only from Israel to Egypt. Hundreds of thousands of Israel went to the Sinai Peninsula and to the mainland to see the pyramids and the other wonders of the country their forefathers had left some 2,300 years before. Optimistic forecasts saw a million visitors coming each year, bringing more than a billion dollars. At peak times, there were as many as five direct El Al flights to Cairo. Fruitful cooperation led to advantageous package deals combining Egypt and Israel and bringing tourists from America and from Russia. Worsening security conditions and the threat of terrorism put paid to these hopes. Now El Al is no longer flying the route; there is only a trickle of Israeli Arabs coming.

Agriculture had been another promising sector. In the first years of peace, Israel had put its experimental know-how in growing fruits and vegetables on light soils such as those of the desert at the disposal of Egypt.

Model farms were established near the Cairo-Alexandria desert road.

Israel also gave its neighbor the best varietal seeds for the project. Thousands of Egyptian farmers underwent specialized training at the Bror Hayil kibbutz near Sderot and were given tracks of land to implement it when they returned. Production soared.

Not only did Egypt became self-sufficient, it could now export quality produce such as strawberries to Europe. But that all important cooperation fell victim to Islamic incitement.

Israel was accused of “poisoning Egyptian soils” and agricultural cooperation came to an end with the fall of Mubarak.

What now? Could the Egyptian president, who has his hands full dealing with burning economic issues while fighting terrorism in the Sinai Peninsula and along the porous Libyan border and has also taken on the religious establishment, decide to promote normalization? On the one hand, he must be aware of what it could mean: renewed agricultural cooperation, transfers of technology in manufacturing and hi-tech, investments even, as well as sport and cultural exchanges.

On the other, there are some weighty stumbling blocks: the Palestinian issue – and the deep-seated antagonism toward the State of Israel of the old elites, be they Islamic or nationalistic. Yet there are a growing number of people in Egypt who think that their country has done more than its share to help the Palestinians and paid a heavy price for the wars and destruction it entailed.

They are also dissatisfied with the corruption of Palestinian leaders. And the old elites are getting older....

The writer, a fellow of The Jerusalem Center for Public Affairs, is a former ambassador to Romania, Egypt and Sweden.


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