Atlantic Council

Pictures of Presidents Mahmoud Ahmadinejad and Mohamed Morsi warmly embracing in Cairo have reverberated around the world. For some, the pictures were cause for worry, for others, a cause for celebration. After the 2011 Egyptian uprising, there have been continued efforts on the diplomatic front for rapprochement between the countries who severed relations more than three decades ago. Is this a new dawn for Egypt-Iran relations? 

The historical root causes between the break in relations between Egypt are Iran are relatively well-known. There was no love lost between Mubarak and the Iranian regime. Mubarak's ouster was received very warmly in Teheran, where Ahmadinejad argued that the Egyptian uprising was an extension of Iran's Islamic revolution , even claiming credit for it and describing the Arab Spring as a ‘divine awakening’.  Over the past several months both leaders have exchanged historic visits, Morsi to Iran, and Ahmadinejad now to Egypt. As this rapprochement between old foes unfolds, we should not overstate it, as this relationship has several issues working against it in the short and medium term. 

It's the Economy, Stupid

Besides their elegantly trimmed matching beards, both leaders share something else in common: they preside over dysfunctional economies. The Iranian president had the audacity to offer Egypt a loan, but upon closer inspection, arguably a loan would be needed much closer to home. Over the past year, Iran’s inflation reached a staggering 27 % and its currency is at an all time low against the dollar losing 21% of its value, with the economy suffering from stifling sanctions. While these figures don't bode well for the Iranian economy in the short term, at least Iran has the third largest oil reserves in the world; Egypt doesn't.

The Egyptian economy continues to bleed. In the immediate aftermath of the 2011 uprising, the Egyptian economy shrank a record negative growth, from which it has partially recovered. Foreign reserves have more than halved to $13.6 billion with the Egyptian Minister of Planning recently stating that the reserves will only cover three months of imports. Tourism, a lifeline of the economy, continues to suffer due to security concerns. The official unemployment rate is at 12 %, meaning the unofficial one is likely much higher. Much like Iran, the Egyptian pound continues its losses against the dollar.  Subsidies continue to be a major issue; they eat up an average of 30% of the budget, two thirds of it  spent on fuel and energy, the rest going mainly to food subsidies, predominantly wheat. All these are indicators that Egypt will need its economic relations with the GCC, US and Europe more than ever, and this simply cannot come at the expense of deepening relations with Iran.

The US-Egyptian Context

This week Iran showcased its most ‘advanced’ fighter jet, the Qaher 3, which some aviation experts have described as ‘laughably fake’. In the same week, the Egyptian military received the first batch of a long awaited shipment of twenty F-16 fighter jets from the US. Due to its close relationship with the US, the Egyptian military has the luxury to purchase arms and service its current weapons systems from US and European suppliers, as Iran’s aging air force stagnates.

After the recent unrest in Cairo, outgoing US Defense Secretary Panetta (who went bowling with former Minister of Defense Field Marshal Tantawi last time he was in Egypt) called the current Egyptian defense chief to express concern, as well as to ‘express U.S commitment to the defense relationship.’ These are merely a few examples among many of how it is unthinkable for the Egyptian military establishment to sacrifice a decades old relationship with the US for rapprochement with Iran.

Syria

While Ahmadinejad received a warm welcome in Egypt, in true Arab fashion there was also a Syrian shoe-thrower on hand to welcome him in downtown Cairo. This is yet but another example of how Egypt and Iran sit on different sides of the fence. During Morsi’s historic visit to Teheran, his speech highlighted the plight of the everyday Syrian (and was naturally censored by his hosts on TV).  Iran, directly and through its proxy Hezbollah, continues to prop up the Syrian regime, with no end in sight to the violence.

The Good ol’ Sunni-Shi'ite Divide

Over the past two years, there has been growing alarm in Egyptian religious circles of an attempted ‘Shi'ite’ infiltration of Egypt. During the Fatimid era, Egypt itself was once Shi'ite, and Egyptians to this day continue to revere the family of the Prophet Mohammed, as exemplified by the visits to the Hussein Mosque and shrine. Nonetheless the ultra-orthodox Salafis, influenced by the Wahabi doctrine, have cried wolf against rapprochement with Iran on sectarian terms. Weeks before Ahmadinejad arrived, a conference was held by religious conservatives in Egypt calling to ‘save’ the Ahmadia Sunni minority in Iran. Even during his visit to Al Azhar, the bastion of Sunni learning, Ahmadinejad was directly exposed to this on camera, as an Azhar scholar berated the treatment of Sunnis in Iran, with Ahmadinejad and his translator standing right next to him. He later stormed out of the news conference.

Conclusion: Let’s Grandstand

This rapprochement has simple aims of grandstanding, and both leaders are trying to milk it. Morsi is keen to show to the Egyptian people that he has an ‘I am not Mubarak and I don't follow the US all the time’ foreign policy. The rapprochement with Iran can be used later as a card by Morsi in bargaining with the US and GCC countries.

On the Iranian side, Ahmadinejad is keen to shake off Iran’s pariah status globally and in the region, by showing that he is cultivating new friends. Another regional power, Turkey, sensed the winds of change caused by the Arab Spring early on, and now has deeper ties with Egypt, Tunisia and Libya. In a shifting strategic environment, Iran will not let itself slip behind in cultivating such ties, and Egypt is at the center of its ‘charm offensive’ into the Arab Spring.

In the meantime, both leaders will continue this mutual grandstanding waltz, however deep in their minds the limitations of this rapprochement, at least in the short term, should be pretty evident.  

Adel Abdel Ghafar is a doctoral researcher the Australian National University and a Visiting Fellow at the American University in Cairo. His research focuses on the economic roots of the 2011 Egyptian uprising and its impact on social movements. 

Photo: EPA