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Thursday, 23 September 2021

Building understanding with the US

Initial communications with the new Biden administration have set the tone for stable working relations with Egypt and other US Arab allies

Dina Ezzat and Niveen Wahish, Thursday 4 Mar 2021
Building understanding with the US
Biden photo: Reuters
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Egypt and the US formally launched relations under the new US Biden administration this month, and the Egyptian Embassy in Washington launched a “charm offensive” with the US Congress in January, aiming to promote as much “understanding as possible” in the US for the new Egypt that is being built as a modern and stable state.

Later in the same month, President Abdel-Fattah Al-Sisi received Commander of US Central Command Kenneth F McKenzie a few days after the Biden administration approved a new package of arms to Egypt and a possible $197 million sale of missiles.

US Secretary of State Anthony Blinken called Egypt’s top diplomat Sameh Shoukri to discuss the future of bilateral relations between the two countries.

According to an informed diplomatic source, the position of the new US administration is that Egypt is a strategic partner of the US. “The issue of human rights is a key issue for this administration, but it is not going to hijack the entire relationship, which is important to both sides,” he said.

According to the diplomat, the topic of human rights in Egypt has been coming up at almost every meeting that a member of the Egyptian Embassy in Washington has conducted with the US Congress or elsewhere in the US capital. It was also referenced in the phone call that Blinken had with Shoukri.

“It is there in a clear way and sometimes in an assertive way, but it is never addressed out of the context of the overall character of the Egyptian-US relationship that has so many other elements that are crucial to both countries,” the diplomat said.

“It is always important to remember that the pursuit of regional peace and stability as launched by [late president Anwar] Al-Sadat has been the basis for this relationship since its re-launch in the 1970s. The issue of regional peace and stability has always been an issue of interest for both countries, and the two countries will continue to work together to address this issue,” he added.

According to the Egyptian narrative, Cairo knows that the issue of human rights will be more central to the new US administration than to the previous one. However, it also knows that this is not the first time that the human rights situation in Egypt has become important in bilateral relations.

It also happened under the second administration of former US president George W Bush. But it never muted cooperation on other fronts, including the political and military.

“It is important to remember that for the US the issue of human rights is a foreign policy tool. Today more than ever before, perhaps, Washington needs this tool to control the spread of Russian and Chinese influence across the south of the Mediterranean, East Africa, and the Gulf,” the diplomat argued.

“So, all the countries of the region will come under some sort of pressure from Washington in relation to the human rights situation. However, this will not mean that the US is planning to put sanctions on or sever relations with any country in the region whose human rights situation is not up to US standards,” he added.

This week, the US released a report on the killing of Saudi journalist Jamal Khashoggi in the Saudi Consulate in Istanbul in October 2018. However, according to a Washington-based diplomatic source, the release of the report came only after Biden had spoken with Saudi monarch Salman bin Abdel-Aziz.

“So, there will always be give-and-take. The new administration will be clearly pressing on the human rights issue with all its partners in the region, and this pressure will be accommodated, but only to an extent,” the diplomat said.

“Meanwhile, relations will continue on all other fronts almost uninterrupted,” he added.

For example, he said that the release of Saudi activist Loujain Al-Hathloul was a sign that Riyadh knows that with the Biden administration some high-profile cases will have to be “managed in a different way than they were under” the previous US administration of Donald Trump.

In Egypt, he said, “the lines are clear and cannot be blurred. Egypt is not going to compromise on any case of terrorism, either directly or indirectly,” he explained.

“The message that we will put across to the US administration is that we have a tough war against terrorism in Sinai and we have to continue to be vigilant. We will also explain that the battle against terrorism is not just about Egypt, a direct neighbour of Israel, but also about all of North and East Africa,” he said.

“The fact that the US administration decided to approve the recent missiles sale is a clear sign that Washington knows very well the kind of tough battle that Egypt is having with terrorism,” he argued. US President Joe Biden’s administration on Tuesday approved a nearly $200 million tactical missiles sale to Egypt. The weapons shipment to Egypt goes to strengthening Egypt’s maritime power in the Red Sea and Suez Canal, experts said.

Meanwhile, Egyptian and US businessmen and officials this week renewed their commitment to expanding trade and investment between the two countries.

“A change in the administration hardly ever affects business,” said one businessman who preferred to remain anonymous, clarifying that what guided the business sector was the attractiveness of domestic rules and regulations.

Acknowledging that the business environment in Egypt had “come a long way”, he said more was needed to facilitate trade and attract greater US and foreign investment. It all came down to bureaucracy and red tape, said the source, explaining that processes had improved but that more could be done. Another major issue, he said, were lengthy and slow litigation processes, as well as procedures to exit the market.

Egypt’s competitive edge in terms of location and a trained labour force would be better taken advantage of if these issues were tackled, he stressed. Other countries such as Morocco and Kenya could be attractive alternatives to investment, he pointed out.

The Egyptian government has said it is intent on tackling obstacles to investment. Addressing the American Chamber of Commerce (AmCham) in Egypt, Prime Minister Mostafa Madbouli said that the government continued to exert continuous efforts to improve the investment climate through economic, financial, and institutional reforms to attract capital and remove obstacles facing investors.

“Mobilising adequate private capital is necessary to achieve high and inclusive growth over the medium term and help us maintain and safeguard macroeconomic stability… through injecting new investment,” stressed Madbouli, adding that more active private-sector participation was necessary if Egypt were to regain its pre-pandemic economic growth levels and achieve its development plans.

Greater private sector inclusion in the economy is one of the main issues that Egypt needs to work on, according to experts and international financial institutions.

The intention to work on growing Egypt-US bilateral relations was also reflected by US Ambassador to Egypt Jonathan Cohen. Addressing AmCham a week earlier, Cohen reiterated the US commitment to strengthening the US-Egypt partnership.

Referring to Egypt’s reform efforts, Cohen said Egypt was the only country in the region whose economy actually grew over the past year despite the pandemic, translating into opportunities for US businesses.

“We’re seeing considerable optimism about Egypt’s economy and a great desire to tap into these opportunities,” Cohen said, outlining opportunities in everything from transport and infrastructure projects to ICT, education, healthcare, agriculture, and renewable energy.

Cohen stressed that a strong and empowered private sector was the best way to generate jobs and deliver economic growth, development, and prosperity.

“Every day, we advocate with the government of Egypt to remove or reduce specific barriers and improve the overall business environment,” Cohen said. He recognised that Egypt has undertaken a number of critical reforms in recent years, but important work remained. 

“We want to help reduce red tape and barriers to international trade and enhance trade facilitation,” he said, stressing the importance of intellectual property rights so that innovation can thrive. “America means business in Egypt,” Cohen said, adding that more US business will benefit the peoples of both countries.

Myron Brilliant, executive vice-president and head of international affairs at AmCham, speaking during the same webinar as Madbouli, said the US business community was encouraged by Egypt’s dedication to economic reform.

Pointing out that the pandemic has accelerated progress in areas such as healthcare, the digital economy, and finance with new products, services and technologies, Brilliant said intellectual property, data privacy, and data governance were “big issues to work through, and we want to work with you to make sure the right policies are in place to achieve the economic transformation you seek.”

Egypt imports around $5.5 billion worth of products from the US while exporting around $2.5 billion worth of goods. According to the Central Bank of Egypt (CBE), the US was the third-largest source of foreign direct investment (FDI) in Egypt during fiscal year 2018-19 behind the United Kingdom and Belgium.

The US invested $1.6 billion, accounting for 19 per cent of total FDI in the country.

AmCham Egypt runs an annual door knock mission to the US where it carries out meetings with US policy-makers and the business community. In 2020, there was no mission for the first time since 1984 as a result of the coronavirus pandemic. A number of meetings were held virtually, and the continued Covid-19 situation will mean more virtual meetings this year.

“The players who decide the mode of bilateral relations between Egypt and the US are not just officials — there is also a great role for the business community whose influence cannot be overlooked,” the Egyptian diplomat said. He added that while the initial phase might not be the easiest, “things will come round.”

*A version of this article appears in print in the 4 March, 2021 edition of Al-Ahram Weekly

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