Introdution
India taking more than seven decades to host the leader of the most populous Arab country as the chief guest of the Republic Day celebrations signals the current state of bilateral relations.
However, this should not have been the case, especially given the bonhomie of the 1950s.
As Egyptian writer Mohamed Hassanein Heikal once reminded, between February 1953 and July 1955 alone, Prime Minister Jawaharlal Nehru and President Gamal Abdel Nasser met as many as eight times. Due to logistical and political reasons, Cairo was Nehru’s transit point for his visits to Europe and the Americas and this partly contributed to the frequency.
Decline of Egypt
The June War of 1967, which ended with the Arab defeat, marked Egypt’s decline in Middle Eastern politics and this was formalised following the oil crisis of 1973 that cemented the ascendance of Saudi influence.
The energy-driven approach to the region spurred by economic reforms of the 1990s further pushed Egypt out of India’s priorities.
Thus, as it was coming to terms with the post-Cold War international order, India shifted its attention to Israel, with whom it normalised relations in January 1992.
On the other hand, Egypt’s dwindling regional influence, the emergence of new players like Türkiye and Qatar, the power aspirations of Iran, and its reach beyond its immediate neighbourhood meant that India gave lesser importance to Egypt.
Moreover, the great power aspirations in the early 21st century pushed India to prioritise G20 over non-alignment. Thus, meeting Saudi leaders at G20 summits became common 2014.
Rekindling the Old flame
There were attempts to resurrect the old flames of Indo-Egyptian relations. Previous presidents Hosni Mubarak (November 2008) and Mohammed Morsi (March 2013) did visit India and not to be left behind, Abdel Fattah El-Sisi also came twice in October 2015 and September 2016.
But no Indian PM had visited Egypt since Manmohan Singh, who attended the Sharm el-Sheikh NAM summit in July 2009. Despite invites, PM Modi, who travelled to several Middle Eastern countries, has not visited Egypt. However, he met Sisi in multilateral forums such as the UN, BRICS and SCO.
China Angel
As has been the pattern in recent decades, India’s decision to host Sisi at this juncture has a China angle. China’s footprints in Sisi’s mega infrastructure projects are visible and growing.
Between 2013 and 2019 alone, China invested $28.5 billion in Egypt, with more than half of them going to industrial projects. In sync with its Belt and Road Initiative, China is active in the second Suez Canal project and the new Central Business District being developed in Cairo.
For Sisi, China offers an opportunity to lessen his dependence on the US, which is driven by human rights concerns under the Biden administration. Since assuming office in 2014, Sisi has visited China as many as seven times.
Egyptian Situation
The economic situation in Egypt is also challenging. The conditions that catapulted the masses to rise against Mubarak as well as Morsi have not fundamentally changed. The situation continues to be precarious.
More than a quarter of the 110 million population is below the poverty line. There is double-digit inflation, and unemployment is close to 10 per cent.
The national debt is expected to touch $500 billion by 2027.
In addition, the Russia-Ukraine War has accentuated the food security problems of Egypt. Nearly two-thirds of the population, or 60 million people, rely on food subsidies, and the growing import grain prices are widening Egypt’s trade deficit.
The second Suez Canal, developed at over $8 billion, is not without its problems. Due to open in July this year, it faces an unexpected challenge: Israel.
Plans are underway to build pipelines between the Israeli ports of Eilat on the Gulf of Aqaba and Ashkelon on the Mediterranean for exporting Gulf oil, especially from the UAE to Europe.
When materialised, this would considerably undermine the Suez Canal tanker traffic. However, due to its geostrategic location and strategic positioning, Egypt is trying to capitalise on its multiple identities.
Despite losing its erstwhile preponderance, Egypt is still an important Arab country, wielding considerable influence in the 22-member Arab League. With over 80 per cent of its population following Islam, Egypt adheres to moderation.
Pushing the country towards religious extremism was one reason that led to President Morsi’s downfall.
Since the 1950s, its leaders have viewed Muslim Brotherhood as a threat to Egyptian identity and social fabric, and in December 2013, the Brotherhood, the mother of several religious groups in the Middle East and beyond, was proscribed as a terrorist organisation.
The Constitution, adopted through a popular referendum in January 2014, is one of the most inclusive in the world. Despite declaring Islam as the state religion, it recognises and hails the historical legacy of Moses, Jesus Christ and Prophet Mohammed in making Egypt “the cradle of religions.”
In the socio-political realm, Egypt uses its identity as an African and Francophone country in its diplomatic outreach and is a major player in both groups.
Conclusion
Above all, Egypt is a pivot in several mediating efforts in the Middle East, especially in the Arab-Israeli conflict. The peace treaty with Israel and its diplomatic engagements enabled Egypt to lower periodic tensions and conflict.
For example, even the financial clout of Qatar could not match Cairo’s diplomatic acumen in ending the 50-day Gaza conflict in 2014.
The Abraham Accords offered an additional avenue for Egypt to leverage its advantages. Convergence of interests with the US on several regional issues and geographic proximity enabled Sisi to host several meetings between Israel and Arab countries.
Even on I2U2, where India is a key member, Sisi is an indirect player by actively courting Israel and the UAE.
Thus, Egypt’s multiple identities—Arab, Islamic, African, Francophone, peace mediator and inclusive country—could be shored up to expand India’s footprints in the Middle East.
The joint statement issued during Sisi’s visit speaks of upgrading the bilateral relations “to the level of ‘Strategic Partnership’ covering political, security, defence, energy and economic areas.” However, walking the talk will be easier said than done, especially in light of both countries’ prolonged neglect and indifference.
Credit : New Indian Express, P R Kumaraswamy
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Steve Ovett, the famous British middle-distance athlete, won the 800-metres gold medal at the Moscow Olympics of 1980. Just a few days later, he was about to win a 5,000-metres race at London’s Crystal Palace. Known for his burst of acceleration on the home stretch, he had supreme confidence in his ability to out-sprint rivals. With the final 100 metres remaining,
[wptelegram-join-channel link=”https://t.me/s/upsctree” text=”Join @upsctree on Telegram”]Ovett waved to the crowd and raised a hand in triumph. But he had celebrated a bit too early. At the finishing line, Ireland’s John Treacy edged past Ovett. For those few moments, Ovett had lost his sense of reality and ignored the possibility of a negative event.
This analogy works well for the India story and our policy failures , including during the ongoing covid pandemic. While we have never been as well prepared or had significant successes in terms of growth stability as Ovett did in his illustrious running career, we tend to celebrate too early. Indeed, we have done so many times before.
It is as if we’re convinced that India is destined for greater heights, come what may, and so we never run through the finish line. Do we and our policymakers suffer from a collective optimism bias, which, as the Nobel Prize winner Daniel Kahneman once wrote, “may well be the most significant of the cognitive biases”? The optimism bias arises from mistaken beliefs which form expectations that are better than the reality. It makes us underestimate chances of a negative outcome and ignore warnings repeatedly.
The Indian economy had a dream run for five years from 2003-04 to 2007-08, with an average annual growth rate of around 9%. Many believed that India was on its way to clocking consistent double-digit growth and comparisons with China were rife. It was conveniently overlooked that this output expansion had come mainly came from a few sectors: automobiles, telecom and business services.
Indians were made to believe that we could sprint without high-quality education, healthcare, infrastructure or banking sectors, which form the backbone of any stable economy. The plan was to build them as we went along, but then in the euphoria of short-term success, it got lost.
India’s exports of goods grew from $20 billion in 1990-91 to over $310 billion in 2019-20. Looking at these absolute figures it would seem as if India has arrived on the world stage. However, India’s share of global trade has moved up only marginally. Even now, the country accounts for less than 2% of the world’s goods exports.
More importantly, hidden behind this performance was the role played by one sector that should have never made it to India’s list of exports—refined petroleum. The share of refined petroleum exports in India’s goods exports increased from 1.4% in 1996-97 to over 18% in 2011-12.
An import-intensive sector with low labour intensity, exports of refined petroleum zoomed because of the then policy regime of a retail price ceiling on petroleum products in the domestic market. While we have done well in the export of services, our share is still less than 4% of world exports.
India seemed to emerge from the 2008 global financial crisis relatively unscathed. But, a temporary demand push had played a role in the revival—the incomes of many households, both rural and urban, had shot up. Fiscal stimulus to the rural economy and implementation of the Sixth Pay Commission scales had led to the salaries of around 20% of organized-sector employees jumping up. We celebrated, but once again, neither did we resolve the crisis brewing elsewhere in India’s banking sector, nor did we improve our capacity for healthcare or quality education.
Employment saw little economy-wide growth in our boom years. Manufacturing jobs, if anything, shrank. But we continued to celebrate. Youth flocked to low-productivity service-sector jobs, such as those in hotels and restaurants, security and other services. The dependence on such jobs on one hand and high-skilled services on the other was bound to make Indian society more unequal.
And then, there is agriculture, an elephant in the room. If and when farm-sector reforms get implemented, celebrations would once again be premature. The vast majority of India’s farmers have small plots of land, and though these farms are at least as productive as larger ones, net absolute incomes from small plots can only be meagre.
A further rise in farm productivity and consequent increase in supply, if not matched by a demand rise, especially with access to export markets, would result in downward pressure on market prices for farm produce and a further decline in the net incomes of small farmers.
We should learn from what John Treacy did right. He didn’t give up, and pushed for the finish line like it was his only chance at winning. Treacy had years of long-distance practice. The same goes for our economy. A long grind is required to build up its base before we can win and celebrate. And Ovett did not blame anyone for his loss. We play the blame game. Everyone else, right from China and the US to ‘greedy corporates’, seems to be responsible for our failures.
We have lowered absolute poverty levels and had technology-based successes like Aadhaar and digital access to public services. But there are no short cuts to good quality and adequate healthcare and education services. We must remain optimistic but stay firmly away from the optimism bias.
In the end, it is not about how we start, but how we finish. The disastrous second wave of covid and our inability to manage it is a ghastly reminder of this fact.