Sisi’s visit to Baghdad: What does Egypt want from the “new Levant” alliance?

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The visit of Egyptian President Abdel Fattah al-Sisi to Iraq, two days ago, reflected Cairo’s interest in the “New Levant Project”, which it is launching in cooperation with Baghdad and Amman that aims to create an economic/political alliance to confront existing regional alliances.

Through this project, Egypt seeks to realize its dream of becoming a regional energy center and to obtain a share of the reconstruction of Iraq that will take place in the next few years. It also aims to restore its Arab power, which has greatly diminished during the last two decades in favor of the rise of Saudi, Emirati, Iranian, Turkish, and Qatari influence.

What is the new Sham project?

The term “New Levant Project” was officially introduced for the first time in August 2020, by Iraqi Prime Minister Mustafa Al-Kazemi, who said in statements to the “Washington Post” newspaper that he intends to enter into an alliance bearing this name, explaining that it is an economic project on the European model that brings together Between Baghdad, Cairo, and Amman, it allows freer flows of capital and technology.

Egypt, Iraq, and Jordan held 4 presidential summits in order to strengthen this alliance, the first of which was held in March 2019 in Cairo, and the second was held in September 2019 in New York on the sidelines of the work of the United Nations General Assembly, and Amman hosted the third summit in August 2020, then the fourth summit took place in Baghdad despite serious security challenges.

There is no clear and explicit definition of what the new Levant project is, but the statements of officials in Egypt, Iraq, and Jordan indicate that it will be an economic – and to a lesser extent political – alliance between the three countries, with the main objective of developing cooperation in the fields of trade, infrastructure projects, energy transfer, and oil.

The project includes Baghdad supplying Cairo and Amman with oil, in return for Iraq providing them with electricity, and the participation of Egyptian and Jordanian companies in the process of rebuilding Iraq, in addition to Egypt benefiting from its surplus refining capabilities to refine Iraqi oil and export it to Europe.

Steps have already begun to implement this agreement, as Egypt and Iraq signed, last October, 15 memoranda of understanding in the fields of petroleum, mineral wealth, transport, housing, and investment. The three countries are urging the establishment of a new oil pipeline starting from the Basra fields in southern Iraq to the Jordanian city of Aqaba and from there to the Egyptian Sinai Peninsula, which would reduce $16 per barrel of oil that the three countries would benefit from. The three countries are seeking to operate a land transport line between them, starting from Cairo through Amman to Baghdad and back, in order to facilitate the transfer of Egyptian labor to these countries and the movement of students from them to Egypt.

Egyptian companies got the lion’s share of the reconstruction process in Iraq, where about 20 Egyptian companies participate in building housing complexes in 15 Iraqi governorates. Egyptian companies also won a large share in building hospitals, feed and fertilizer factories, railway tracks and solar power plants. Press reports indicate that the “Egyptian-Jordanian-Iraqi” electrical interconnection project is scheduled to enter the implementation phase within a period of about 18 months, following the completion of the technical studies currently underway in order to complete the export of electricity from Egypt to Amman and Baghdad, which will enable the two countries to finish The severe electricity crises they suffer from  and will enable Egypt to export its surplus electricity production, which ranges between 26 and 38,000 megawatts.

What does Egypt want from this alliance?

One of the goals of the New Levant Alliance is to confront Iranian influence in Iraq and return Baghdad to the Arab incubator by linking it to economic interests. This alliance enjoys great support from Washington, so do not forget that the official announcement of it was made during Al-Kazemi’s visit to the United States of America in August 2020, and through a press interview with an American newspaper.

The United States was the first country to comment on the tripartite Baghdad summit. The State Department welcomed the visit, describing it as “historic” and “an important step in strengthening regional economic and security relations between Egypt, Iraq and Jordan and advancing regional stability.” Despite this, we do not think that Egypt cares much about the American plan to confront Iranian influence in Iraq as much as what it will gain from this alliance, especially the economic gains.

This alliance will contribute to the operation of dozens of Egyptian companies in the Iraqi and Jordanian markets, which will lead to a reduction in unemployment rates in Egypt, and a revival of foreign income sources, as workers’ remittances are the largest source of hard currency in Egypt, reaching $29.6 billion during 2020. This alliance will also contribute to turning Egypt into an energy hub, as Sisi dreams. It will export electricity to Iraq and Jordan, import oil for domestic use first, and operate refineries for export abroad.

On the other hand, this alliance enhances Egypt’s regional position, restores some of its lost influence over the past two decades, and contributes to strengthening Egypt’s position with the United States, as it will become a pivotal country in the alliance, which Cairo needs in light of the tense relations with Washington due to the file Violation of human rights strongly criticized by the United States.