Egypt is facing a multifaceted crisis that has serious implications for the country’s economy and international standing. The conflict known as “Iron Swords” is an unusual war that affects multiple countries, including Egypt, which is particularly vulnerable to its effects.
The crisis in the Red Sea following Houthi attacks resulted in a 64% drop in traffic in the Suez Canal in the first two weeks of the year compared to the previous year. This drop had significant financial implications for Egypt, resulting in a 47% decrease in revenue compared to the previous year. The damage to the Suez Canal began to mount when the Houthis began targeting nearly all shipping giants with their attacks.
Egypt’s debt crisis has been growing steadily over recent years, reaching more than 160 billion dollars. The credit rating companies have downgraded Egypt’s credit image due to this crisis and other economic factors. In response, Egypt is holding discussions with the International Monetary Fund (IMF) to release additional aid funds. However, these discussions have been difficult after last year’s aid package was stopped because Egypt did not carry out necessary reform measures.
To mitigate some of these challenges, Egypt’s president Abdel Fattah Al-Sisi has asked the Houthis to focus only on attacks against Israel instead of targeting shipping giants and other countries directly involved in the conflict. Despite this request, however, it remains unclear how effective this strategy will be in reducing tensions and resolving the crisis.
Overall, Egypt faces significant challenges due to conflicts both within its borders and beyond them. As such, it remains crucial for world leaders and organizations like the IMF to work together with Egypt’s government and people to find solutions that address these challenges and promote stability and prosperity for all involved parties.