A Central Mediator and Global Energy Player: Egypt Returns to the Forefront
Egypt’s Role in Promoting Peace and Stability
In a recent series of interviews, Egyptian Foreign Minister Sameh Shoukry has highlighted Egypt’s pivotal role in advancing peace and stability in the Middle East. Beyond efforts to secure a cease-fire and facilitate humanitarian aid to the Gaza Strip, Shoukry outlined President Abdel Fattah El-Sisi’s vision for a comprehensive arrangement addressing governance, security, and civilian reconstruction issues in Gaza. This aligns with Egypt’s “Vision 2030” for economic development and regional stability.
Strategic Importance of Egypt
Egypt is perceived as a key player in the Palestinian arena due to its strategic location, proximity to Israel, and significant standing in the Arab and Muslim worlds. Hosting international conferences, such as the recent Sharm El Sheikh summit, enhances Egypt’s role as a strategic partner for the United States and a reliable diplomatic mediator. Egypt’s extended involvement in the Israeli-Palestinian conflict and efforts in combating Hamas, as well as its participation in negotiations and reconstruction processes, represent a strategic opportunity to strengthen its geopolitical position.
Economic Prospects and Reconstruction Initiatives
Despite significant domestic and external pressures, the reconstruction process in Gaza is expected to improve Egypt’s image and influence in the Muslim world, particularly in the Middle East and North Africa (MENA) region. This involvement is anticipated to bolster national security, expand its influence in the Palestinian context, and yield substantial strategic dividends-politically, militarily, and economically-to help address its pressing socioeconomic challenges.
Egypt, being the second-largest economy in Africa with a GDP of $347.34 billion and an expected growth rate of 4.5% in 2025, serves as a strategic entry point to Africa and the Middle East. Its engagement in the reconstruction effort is set to generate considerable financial gains and diverse economic opportunities both in the short and long term. Stabilization efforts, maintenance of cease-fires, and cessation of hostilities in the Red Sea area could facilitate a renewed opening of shipping routes through the Suez Canal, enhance security along the Sinai border, and boost the Egyptian economy.
According to World Bank and UN estimates, the cost of reconstruction over the coming decade could reach $53 billion, driving demand for servstarts, goods, and infrastructure development-a potential boon for Egyptian, Israeli, and various regional business entities.
Regional and International Collaborations
To further accelerate growth, Egypt’s recent $35 billion gas deal with Israel represents a significant economic and energy anchor. Additional projects in construction, energy, water, and communication are expected to employ Egyptian companies and attract foreign investment into the local economy.
Enhancing diplomatic and economic partnerships with the U.S., European nations, the United Nations, and the World Bank, in addition to Gulf states like the UAE, Saudi Arabia, and Qatar, is likely to result in billions of dollars pouring into critical infrastructure projects. Such investments will contribute to higher employment rates and stimulate economic growth. Furthermore, Chinese and Asian firms in the energy, finance, and infrastructure sectors are expected to play significant roles in the reconstruction, particularly as Egypt joins the Belt and Road Initiative and BRICS forum.
Challenges Ahead
Despite the promising outlook, Egypt faces a substantial external debt of around $152 billion resulting from a 60% decline in Suez Canal revenues since 2023. Its financial stability heavily relies on loans from the World Bank and IMF, alongside foreign aid-primarily from Gulf nations, totaling over $60 billion since 2024. Annual U.S. aid amounts to approximately $2.1 billion, of which $1.3 billion is military assistance.
Successfully rehabilitating Gaza could elevate Egypt as an attractive destination for international investments and regional partnerships, as exemplified by the “New Levant” initiative aimed at enhancing trade ties with Iraq and Jordan. This move is expected to fortify Egypt’s economic power and uplift its international standing.
U.S. Strategic Interests
Rapid developments in the Middle East signal a significant shift in the U.S. approach to Egypt. Deepened economic involvement between Washington and Cairo carries substantial geo-strategic weight. In 2024, bilateral trade reached $12.4 billion, underlining Egypt’s importance at the crossroads between the Mediterranean and Red Sea, particularly concerning green energy, infrastructure, and technological collaborations.
From the American perspective, Egypt’s involvement in mediation efforts in Gaza and conflicts in Libya and Sudan, along with its fight against terrorism, reinforces its geopolitical and leadership role as a stabilizing force in the region. Major American companies like Chevron and Apache are supporting Egypt’s oil sector, enhancing technological efficiencies, and establishing new infrastructure projects, thereby bolstering Egypt’s strategic importance.
Regional Energy Dynamics
Egypt’s emerging energy capabilities present challenges and opportunities for Israel. The strengthening energy sector in Egypt may diminish Israel’s relative advantage in the regional gas market and potentially compromise its long-term energy independence amid ongoing regional instability. Conversely, energy agreements highlight the importance of economic cooperation between the two nations despite longstanding political tensions, generating significant revenues for Israel while reinforcing Egypt’s dependence on it as an economic partner.
Efforts to strengthen bilateral and regional ties while maintaining security stability and reconstructing Gaza will likely lead to increased Israeli exports, reduced security costs, and enhanced confidence from foreign investors in Israel. Thus, Israel’s success hinges on leveraging its strategic location, energy resources, and advanced technological capabilities while fostering strategic dialogue with Egypt and other regional partners. These actions may lay the groundwork for mutual stability and prosperity in the post-war era, ensuring Israel’s security and economic standing as a key player shaping the future of the Middle East.