Mirette F. Mabrouk
What happens in Libya has always been almost as interesting to the Egyptian government as its own domestic affairs. That interest stems from several reasons, chief among them security, regional influence, and the economy.
On security, Egypt and Libya share about 1700 km of extremely porous border, across which people and arms tend to travel with relative ease. Egypt has already pinpointed extremists in Northern Sinai who had direct links to Libyan groups and training camps, and therefore has continuously monitored Libyan political and security developments.
As for regional influence, various countries have used Libya as an all-in wrestling ring over the past decade in a contest for power and influence. Egypt has kept a particularly close eye on Turkey and that jockeying for power led to some nerve-racking chest-thumping last year.
However, the economic front has seen Egypt put in serious and ceaseless efforts. The biggest prize, of course, is Libyan reconstruction and a resumption of the work contracts that had previously ensured employment for approximately 1 million Egyptians – the major source of migrant labor in Libya.
The crisis in Libya meant that Egypt suddenly had to deal with an estimate 800,000 returnees flooding its labor market and the loss of billions of dollars in public and private contracts.
Those diplomatic efforts seem to be bearing fruit. Last week, Libyan Prime Minister Abdelhamid Dabaiba visited Egypt for high-level committee meetings being held for the first time in 12 years. Shortly after his visit, the Libyan government announced that civil aviation authorities in both countries had agreed to resume flights between Cairo International Airport and three Libyan ones: Baninah, Mitiga, and Misrata.
The week before, Libyan Minister of Economy Salama el-Ghwell had told the Egyptian newspaper Amwal El-Ghad that 13 memoranda of understanding had been inked, to the tune of billions of dollars. He also noted that Egyptian banks would be leading the financing efforts for the reconstruction and that Egyptian companies would be doing the heavy lifting, among them Elsewedy Electric, which alone accounted for a whopping 30% of the total figure.
Even more significantly for Egypt, which has been struggling with unemployment, Al-Watan reported that Libyan reconstruction would be a phased effort, and while housing, telecommunications, and education were all on the list, the first phase would concentrate on infrastructure work, which would sop up a vitally important 1 million Egyptian workers.
Bilateral trade between the two countries has already picked up, increasing by 43% during the first quarter of 2021 compared to Q1 2020.
While Libyan reconstruction is good news all around, it’s vital for Egypt, which has struggled with both foreign direct investment and domestic growth.
Employment had largely been bolstered by national projects and government spending but, despite some admirable mitigation efforts, the grim effects of the pandemic have meant that those figures have dropped and that the government is unlikely to be able to spend similar amounts for the foreseeable future.
And while the money represents a financial lifeline for the government, it also helps bolster the regional influence that has always been part of Egypt’s Libya calculations.
Mirette F. Mabrouk
Senior Fellow, Director of the Egypt program