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Riveting geo-economic changes
Published in Al-Ahram Weekly on 18 - 04 - 2019

The opening of the Suez Canal in 1869 announced astounding changes in the East Mediterranean. At the time, it seemed to simply facilitate navigation and connectivity (there were no airplanes back then). This feat was enough to create a deep rivalry among world powers over Egypt and the Near East, which carried a heavy price tag later, to the extent that Egyptian schoolchildren ask in geography lessons whether digging the canal was a “blessing” or a “curse” for Egypt, which as a result was shocked by British occupation.
There was another remarkable development in the 20th century, namely the internal combustion engine which needed a constant supply of oil as a source of energy. This led to the discovery of the first oil field in the region at Ras Ghareb on Egypt's Red Sea coast, and since then the Arab region and oil have been synonymous.
The Suez Canal, with all its capacity for crossing vessels, became the gateway for Arab oil going to European and North American markets. During the height of Arab cooperation at the end of the 1990s, Al-Sumed pipeline — in cooperation between Egypt, Saudi Arabia, the UAE, Qatar and Kuwait — transferred Arab oil from vessels coming into the Port of Ain Sokhna on the Gulf of Suez to vessels waiting on the Mediterranean coast. Fortunately, this type of Arab cooperation survived political disputes, periodic Arab crises and even wars without obstructing the benefits of the Suez Canal and the pipeline transporting fuel. When Egypt decided to expand and deepen the Suez Canal recently by digging another branch to allow simultaneous crossing in both directions, Arab countries — especially the UAE — stepped up to assist accomplishment of the project in record time.
Although the second decade of the 21st century was not merciful to the Arab nation, in the past few years there has been a remarkable geo-economic and geopolitical development in the region, namely the demarcation of nautical boundaries between Egypt and Saudi Arabia, and Egypt and Cyprus. This step opened the floodgates for many interesting developments in the entire region. First, there was the discovery of vast gas reserves east of the Mediterranean Sea off Egyptian, Palestinian, Cypriot, Israeli and Lebanese shores. Second, the Red Sea became a prime target of economic reform policies in Saudi Arabia and Egypt. While this primarily meant diversifying sources of revenue from oil to other non-oil sources, such as tourism, trade and transportation, it also meant a historical transition from the River Nile to the coast of the Red Sea which has extended Egypt's economic prospects to the middle of the sea, and revived the economies of Halayeb and Shalateen, Marsa Alam, Al-Qoseir, Safaga, Hurghada, Zaafarana and Ain Sokhna, right up to Suez.
While near-sighted Egyptians viewed the demarcation agreement with Saudi Arabia as an issue about two islands, the agreement gave Egypt the ability to benefit economically from nearly 81 other islands. Demarcation of boundaries gave the Saudis the same, as well as the construction of a smart and tourism-friendly cross-border city, Neom. Gradually, the Red Sea is no longer merely a water body connecting the Indian Ocean and the Mediterranean Sea. It has become a promising economic zone that could make the maritime mid-point between Egypt and Saudi Arabia a metaphorical and physical bridge between the two countries. Perhaps this geo-economic development is the reason for creating a political and security association among countries on the coast, so they can hold periodic meetings to coordinate among Saudi Arabia, Egypt, Jordan, Somalia, Sudan, Djibouti and Yemen.
Similar developments have occurred in the eastern Mediterranean. Demarcation of maritime boundaries between Egypt and Cyprus triggered fierce competition along global oil and gas companies to prospect in the region, which resulted in key discoveries or announcements of previous ones. It created great opportunities for cooperation, including the creation of the East Mediterranean Forum which includes Egypt, Palestine, Jordan, Israel, Cyprus, Greece and Italy, where ministers of petroleum and oil can cooperate and coordinate on many issues regarding the transportation, liquefication and export of gas.
Egypt is prominent in this forum not only because its territories and seas have large reserves of gas, but also because it is a major market of fuel consumption with a population of more than 100 million. It is also home to high-energy consuming industries such as fertilisers, aluminium, cement, iron, steel and others. Third, it has two centres for the liquefication of gas, in Damietta and Edko, as well as ports capable of exporting not only Egyptian gas but also gas from other countries. Fourth, Egypt owns a gas pipeline company transporting gas to Jordan and Israel, with the possibility of extending delivery to Lebanon and Syria when circumstances allow. These developments, along with courageous economic decisions that eliminated subsidies on energy, have ended Egypt's economic crisis which began at the beginning of the decade through subsequent Egyptian revolutions, and predicts a promising future.
The question now is whether we can invest these outstanding geo-economic developments in the Red and Mediterranean seas, especially since they are linked to significant political reform changes in Saudi Arabia and Egypt. What is certain is that the vision of both Egypt and Saudi Arabia until 2030 is a factor at play. Saudi Arabia believes the kingdom is a Mediterranean state and a key pillar of Egypt's vision is to move from “the river to the sea”. The strategic outlooks and visions of the two countries make this a feasible idea and not just a pipedream.
There is a good grasp of the obstacles on the path of such a project, most notably the Palestinian-Israeli conflict and its recent serious complications. There is also Turkey's urge to threaten Cyprus and some areas in Syria, while instability continues in Syria and Lebanon. Nonetheless, all these riveting geographic and political developments took some time to occur, and the results so far have done more good than harm. This is an invitation for politicians and intellectuals to think deeper about the matter.
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The writer is chairman of the board, CEO and director of the Regional Centre for Strategic Studies.


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