UAE Seeking Greater Cooperation With Egyptian Defense Sector

H.E. Mr. Abdel Fattah El-Sisi, President of the Arab Republic of Egypt emplanes for Egypt (State Visit of President of Egypt to India (January 24-26, 2023).

“…The United Arab Emirates has expressed great interest in investing in Egypt’s defense industry…”

In April 2023, UAE President Mohammed bin Zayed made a state visit to Egypt. Although the visit took place in the shadow of conflict in Sudan, where Egypt and the UAE support opposing factions, it was primarily focused on expanding economic cooperation in various sectors, according to the first accompanying excerpt from the Saudi daily al-Sharq al-Awsat. One sector where deeper cooperation would be highly consequential is military production. On paper, the Egyptian and Emirati defense industries are complementary. Egypt has a relatively strong industrial base and a history of military production but lacks funding and investment in new technologies.[i] The UAE, meanwhile, has invested heavily in new military technologies but lacks a large national industrial base or history of military production. According to the second accompanying article, from the Arabic-language Defense Arabia website, “the United Arab Emirates has expressed great interest in investing in Egypt’s defense.” The article highlights a Memorandum of Understanding on defense cooperation signed at the IDEX defense expo in February 2023 between Egypt’s Defense Ministry and the UAE’s Tawazun Council, a key Emirati defense industry government entity. In 2020, the Egyptian government launched an initiative to bolster weapons export production, with a view to making inroads in the African market and helping its moribund economy rebound.[ii] The initiative remains stalled in part due to financial constraints, but it could receive an important boost from Gulf countries seeking regional influence via economic investments.[iii] While Emirati entities have shown interest in investing in Egypt’s state-owned enterprises, they have also grown increasingly frustrated by the Egyptian government’s lack of transparency and market reforms. Thus, potential Emirati investment in Egypt’s defense sector remains a theoretical win-win scenario that is unlikely to move forward unless the Egyptian government is willing to accept at least some of its creditors’ conditions.

Sources:

“هل تعزز زيارة محمد بن زايد القاهرة الاستثمارات الإماراتية في مصر؟

Will Mohamed bin Zayed’s visit to Cairo strengthen Emirati investments in Egypt?” al-Sharq al-Awsat (influential Saudi daily), 13 April 2023. https://tinyurl.com/2p8nuwpm

Egyptian economist Dr. Rashad Abdo told Asharq Al-Awsat that “the Emirati president’s visit to Cairo and his talks with the Egyptian president are economic talks par excellence. Whatever the political files for discussion, the context in which the visit comes confirms that economic issues will prevail.” According to Abdo, “the talks contribute to strengthening and increasing Emirati investments in Egypt in various sectors, and it is likely that the meeting focused on consolidating economic cooperation mechanisms and discussing specific Egyptian proposals for investment opportunities.”

“الإمارات تستثمر في الصناعات العسكرية المصرية.. ماذا وراء تعزيز التعاون الدفاعي بين البلدين؟

The UAE is investing in Egyptian military industries.. What is behind the strengthening of defense cooperation between the two countries?” Defense Arabia (military news website), 29 April 2023. https://tinyurl.com/47yzpj82

The United Arab Emirates has expressed great interest in investing in Egypt’s defense industry, seeking to take advantage of the country’s strategic location and its growing defense sector…In an important step towards enhancing defense cooperation between the United Arab Emirates and Egypt, in February 2023 at IDEX the Tawazun Council signed a Memorandum of Understanding with the Egyptian Ministry of Defense. The memorandum aims to enhance cooperation in the defense and security industries and to strengthen the strategic partnership between the two countries.

Notes:

[i] “Mapping the Formal Military Economy Part 1: A ‘Citadel’ of Egyptian Industry,” Carnegie Middle East Center, 18 November 2019. https://carnegie-mec.org/2019/11/18/mapping-formal-military-economy-part-1-citadel-of-egyptian-industry-pub-80334

[ii] “Egypt boosts local weapons production,” al-Monitor, 2 March 2020. https://www.al-monitor.com/originals/2020/03/egypt-plan-local-weapons-industry-africa-export-army.html

[iii] Since 2013, Gulf countries—primarily Saudi Arabia and the UAE—have provided the government of Egyptian President Abdel Fattah Sisi with as much as $100 billion in assistance, often with no strings attached; it is believed, however, that they are no longer willing to do so without getting guaranteed returns on their capital. See: “Gulf Investment in Egypt: A Balance of Mutual Need,” Carnegie Middle East Center, 8 May 2023. https://carnegie-mec.org/2023/05/08/gulf-investment-in-egypt-balance-of-mutual-need-pub-89641

Image Information:

Image:  H.E. Mr. Abdel Fattah El-Sisi, President of the Arab Republic of Egypt emplanes for Egypt (State Visit of President of Egypt to India (January 24-26, 2023)
Source: India Ministry of Foreign Affairs, Flickr, https://www.flickr.com/photos/meaindia/52651633276  
Attribution: CC 2.0