Egypt Is Paying for Its Saudi Pledge Before Sending One Soldier

The bill arrived in the currency market first. The dollar rose to 55.30 Egyptian pounds on 22 October, a 1.69 percent jump in one session, and the pound has lost 7.55 percent in a month, according to Trading Economics. Foreign and Arab investors sold a net $505 million of Egyptian treasury securities on Monday, about $245 million on Tuesday and $376.4 million on Wednesday, the Middle East Observer reported. In a single week, about $1.9 billion in hot money has left Egypt.

Egypt’s problem is not dollar income. Tourism, remittances from Egyptians abroad, a Suez Canal that has started to recover and exports of roughly $50 billion a year give the country real earnings. The pressure comes from debt interest, and Egypt has long covered the gap between supply and demand for dollars with hot money: foreign funds that buy Egyptian treasury bills or park deposits in Egyptian banks for a high return. That money is now running for three reasons.

First, oil prices are rising and the region is in turmoil. Second, Egypt announced that it would stand with Saudi Arabia. Through months of Gulf fighting the pound barely moved, a pound or two at a time. From the day Cairo declared its support, foreign investors decided Egypt was part of the war, and what happens to the Gulf now happens to Egypt too, even before any order is carried out. Investors are cowards, and that is not an insult: they are afraid for their money. Third, global hot money is heading for the United States, as protests spread across Europe from France to Spain and Germany.

Some critics claim Egypt offered its army for a Saudi deposit of $5 billion. The arithmetic runs the other way. Between capital flight, a weaker pound and a nervous stock market, Egypt is likely to lose about $5 billion before it sends anyone to defend Saudi Arabia.

The dollar could climb towards 60 pounds. When hot money leaves, a weaker pound penalises the funds that are exiting: an investor who converted dollars at 48 pounds and leaves at 60 takes the loss on the way out. Factories still need dollars for raw materials, and hundreds of thousands of Egyptians work in Gulf states that are now at war.

That last pressure is already visible. Kuwait’s education ministry issued termination notices to 7,019 public school teachers in September, most of them Egyptian, with contracts ending in December, Ahram Online reported. Egyptians are also being let go from Kuwait’s judiciary. A Kuwaiti newspaper has asked the government why it is pushing Egyptians out so quickly, warning that the pace is leaving gaps in schools and courts.

There is good news to set against the bill. Eni has separated water from two of the wells in the Zohr field, Egypt’s largest gas field, and plans to add 80 million cubic feet of gas a day by December, backed by an $80 million investment.

Some Saudi commentators have asked where the Saudi foreign ministry’s answer to Sisi is, insisting that Riyadh never requested Egyptian forces. The foreign ministry has not commented because there is nothing yet to comment on. Sending troops abroad on a combat mission requires two-thirds of Egypt’s House of Representatives under Article 152 of the constitution, and parliament has postponed its vote to 26 October after two closed sessions. Riyadh will not respond to a decision that has not been taken.

There was a request. Days before Sisi spoke, Foreign Minister Badr Abdelatty told Bloomberg Television on 13 October that “whatever is being asked by the Saudis, of course we will respond,” Ahram Online reported. American outlets reported that Cairo was answering a Saudi request. Saudi Arabia has a strong sense of pride and does not like to be seen asking, which deserves respect. But Egypt will not send forces until a formal request arrives, and a kingdom under daily attack would treasure every soldier who arrives.

The danger to Saudi Arabia is not abstract. A Houthi attack on Riyadh’s King Khalid International Airport on 10 October killed at least 12 people and wounded more than 300, the deadliest attack on Saudi soil in more than a decade, Al Jazeera reported. On 22 October Houthi spokesman Yahya Saree claimed strikes on the Defence Ministry in Riyadh, King Fahd International Airport in Dammam, an Aramco facility in Yanbu and Abha airport, Türkiye Today reported; the Saudi-led coalition said it intercepted drones over Riyadh and Medina. Saudi Arabia faces three fronts: the Houthis in Yemen, Shia militias in Iraq and Iran itself, which has circulated lists of Saudi targets it would hit if attacked, including airports and the Ghawar oil field and the Abqaiq and Khurais plants. On 21 October the State Department ordered non-emergency staff and families to leave the US embassy in Riyadh, CNN reported, citing Houthi attacks on civilian airports.

Critics ask why Egypt talks so much when France quietly sent soldiers and air defence systems to Saudi Arabia. France sent a small contingent. Egypt is talking about committing an army, and it has already paid a high price for a few sentences at a time when its economy is strained.

Sisi’s repeated clarifications are addressed to Egyptians and to investors, not to the Houthis or Iran. Since his first statement, media outlets, YouTubers and social media accounts have claimed that Egyptian jets would bomb Yemen. The Houthis celebrated his 21 October remarks as a sign of brotherhood with the Egyptian people. They misread him. Egypt’s mission has not changed and Sisi has not backed down. He is making clear that Egypt is going to defend, not to attack.

A defensive mission still carries risk. If a missile hits a site guarded by Egyptian soldiers and kills them, and Cairo learns where it was fired from, Egypt will have to answer. That is how a defensive deployment can drag a country into a war at any moment, and Egyptians should know it before the vote.

Egypt’s parliament is not really debating whether to go. It is waiting on three mediation efforts. The first runs through Oman: a Saudi deputy foreign minister told Tactical Report that Riyadh has opened contacts with the Houthis and that the Houthis are refusing to engage. The second is Washington’s courtship of Moscow. Russia backs Iran, and if Russia gets what it wants in Ukraine it could stop supporting Tehran and even help settle the Iran file. The third is Al-Azhar: on 18 October Grand Imam Ahmed el-Tayeb called for “an immediate and comprehensive halt to fighting and destruction” and offered to back a committee of Arab and Islamic figures. Our earlier analysis explained why parliament delayed the vote.

If the mediation succeeds, parliament will turn down Sisi’s request because it will no longer be needed. If it fails, parliament will approve it. There is no doubt about where Egyptians stand. Ask any Egyptian whether Egypt should support Saudi Arabia and the answer will be yes. Saudis are our brothers, and Egypt and Saudi Arabia have always been one.

On 23 October Turkey’s foreign minister, Hakan Fidan, hosts the R4 alongside the foreign ministers of Britain, France and Germany in Istanbul, the first meeting in that format, according to Pakistan’s Dawn. Its agenda covers Yemen, the Strait of Hormuz, the Israeli-Palestinian conflict and the war in Ukraine. The three European powers belong to NATO, the alliance that is fighting Russia indirectly in Ukraine. Now they are sitting down with the Mecca alliance over a war in the Gulf.

This is no longer a Saudi-Houthi war, or even an American-Iranian one. Russia and China support Iran, NATO’s leading European powers are moving to support Saudi Arabia, and the Americans are with the Gulf. The region is heading into a world war.

Douglas Macgregor, a retired US Army colonel and former Pentagon adviser, has warned where that leads. In his assessment, Israel ignited the region, started the war with Iran and persuaded Washington to strike it, and it will use the moment when Egypt and Türkiye are committed to Saudi Arabia to finish off the Palestinians while Arabs and Iranians fight each other.