Egypt faces numerous challenges in 2023, including a lack of hot money in the economy, water shortages, and food supply problems. The terms of the IMF loan agreement, which require a free float of the Egyptian pound and a reduction in government assets, pose additional challenges beyond those of inflation. Egypt is seeking financial support from Saudi Arabia, the Emirates and China, but concerns remain over the latter's investment due to COVID-19 and the economic war between Beijing and Washington. The country is also moving away from the Eastern Mediterranean pipeline project, favoring a pipeline linking Israeli and Egyptian fields. Human rights and democratic freedoms in Egypt are also of concern, given the absence of a meaningful opposition and the many political prisoners. Despite its strong military power and geopolitical position, Egypt has lost its leading role in the Middle East. The country's foreign policy focuses on relations with the US, Russia and China, its position in the Israel-Saudi Arabia-UAE axis and the dangers posed by Libya, the Gaza Strip and Ethiopia. However, a grand strategy to address these issues is lacking.

Dr. Sotiris Roussos

Senior Research Fellow