War between Russia and Ukraine is having a significant impact on Egypt, both at the internal and external level, threatening to impact the stability of the overall region. The conflict is additionally pressuring the country’s economy, which was already suffering from an incomplete post-pandemic recovery. The economic aftermaths of the conflict hit the country in three crucial sectors: energy, food, and tourism. Growing oil prices have been reflected on the costs of imports and subsidized fuels, impacting the state’s budget. In addition, global food inflation is exacerbating the threat of food insecurity, in a context of high reliance on wheat from Russia and Ukraine. Finally, the reduction of tourist flows from the two conflicting countries risk to further affect one of Egypt’s main sources of income. The authorities have approved exchange rate, monetary, and fiscal measures to mitigate the impact of the crisis and undertaken discussions with international partners to support the country’s economy. At the international level, Egypt is struggling to balance its relations with Washington and Moscow, in a broader context of renewed ties with regional powers (in particular with Gulf countries and Turkey) and diplomatic activism in the main regional crisis, from Palestine to Libya.
What are the main economic and political repercussions of the Russia-Ukraine war on Egypt? What challenges and opportunities does the current situation open for the economy of the country? What would be the implications of such challenges and opportunities in terms of regional stability and geopolitics?
Matteo Colombo, Junior Researcher, Clingendael; Associate Research Fellow, Middle East and North Africa Centre, ISPI
Ha Hellyer, Senior Associate Fellow, Royal United Services Institute & Carnegie Endowment for International Peace
Mirette F. Mabrouk, Senior Fellow, Founding Director of the Egypt Studies program, Middle East Institute
Alessia Melcangi, Associate Research Fellow, Middle East and North Africa Centre, ISPI; Associate Professor, Sapienza University of Rome