The Egyptian economy is in trouble. As result of the Houthis targeting commercial shipping, Suez transits and takings have dropped dramatically, over 50%. Perhaps inevitably, in late July, Egypt’s SCA called for the issuing of reassuring messages to shipping and for insurers to review their premiums to encourage shipping to return to the Suez route.
There was unfortunately no basis for such messages when the Houthis had recently sunk two ships and indeed, continue to pose an active, real and obvious threat with their self-declared fourth phase of operations.
To focus on insurance premiums is also to miss the point – without the willingness of insurers to take on risk, there would be very few transits and Suez fee receipts, themselves multiples of insurance premiums, would diminish further.
Egypt’s navy is impressively ranked 6th in the world. Remarkably, despite suffering considerable financial loss, and being positioned literally in theatre, Egypt has not deployed any of its 255 patrol boats, frigates or corvettes to protect global shipping and its crews.
To understand why an obviously capable nation fears to protect its own economy, it is necessary to accept that Egypt is trying to avoid isolating itself from its neighbours, and trying to avert a regional war, but in the process is risking its own civil collapse. The question that then arises is why so many nations offer Egypt little to no help.
