Egypt: International pressure to allow in Palestinian refugees

Over the past week, multiple reports in Israeli and international media suggested that Tel Aviv is active through diplomatic channels in pressuring Egypt to allow hundreds of thousands of Palestinian refugees from Gaza into the Sinai. In exchange, Israel is allegedly proposing to write off a significant portion of Egypt’s international debts through the World Bank. Egypt is currently going through a severe debt crisis, and it ranks among the countries most likely to default on debt payments. In fact, the state is giving away half of its revenue in interest payments and it relies on loans from the IMF and wealthy Gulf states, and this limits its ability to implement fully independent foreign policies. o Notably, debt forgiveness has previously been leveraged by the United States to bring Egypt in line with its foreign policy. In 1991, the US and its allies forgave half of Egypt’s debt in exchange for its involvement in the anti-Iraq coalition during the first Gulf War. Nevertheless, el-Sisi has staunchly pushed back against the idea of hosting Palestinian refugees. One of the key reasons is the fact that a large encampment of refugees could become a new base for Palestinian resistance operations, which could drag Egypt into a potential military confrontation with Israel. Crucially, Hamas is affiliated with the Muslim Brotherhood, a political and religious movement, which is widespread in Egypt but considered terrorist by the government. One is the status quo, a dire economic situation in which risks of social unrest are high. Additionally, following the Presidential elections in December of 2023, analysts anticipate harsh economic measures to improve public finances, which will inevitably impact the average Egyptian further deteriorating standards of living. The second scenario is the influx of refugees, which could alleviate economic hardship in the short term, due to debt forgiveness, but would create a whole other set of risks. Indeed, not only the security situation in the Sinai Peninsula would deteriorate further, but domestic ideological cleavages would grow deeper, increasing risks of politically motivated domestic unrest.