New York City, perched on the eastern seaboard of the United States, holds powerful symbolic weight not only economically, as the home of Wall Street, but also for its unique social fabric and outsize influence on the country’s political and cultural life.

With 3.1 million immigrants among its 8 million residents, roughly 70% of whom are people of color, New York is a global capital of art, media, diplomacy, and human rights. It mirrors the nation’s progressive ambitions and often acts as a bellwether for American public sentiment, both domestically and abroad.

Today, however, New York’s most globally significant distinction may be that it hosts the second-largest urban Jewish population in the world, after Israel. Around 1.3 million Jews live across the city’s boroughs, alongside an estimated one million Muslims. This interfaith coexistence, long complex, has grown increasingly tense since October 7, 2023.

In this volatile atmosphere, some 33% of the city’s Jewish voters cast their ballots for Zohran Mamdani, a Muslim candidate openly critical of Israel. The outcome stunned many. It pointed to a deepening rupture within a community often portrayed by pro-Israel lobby groups as a unified political force one wielding the wealth, cohesion, and influence to set a pro-Israel agenda across American political institutions.

So what is Mamdani’s relationship with New York’s Jewish community? What does his election signify in a city where Jewish identity and Israeli politics have long been intertwined? Does this vote signal a lasting rift among Jews catalyzed by the events of October 7, or is it merely a fleeting convergence of political interests? This article seeks to answer those questions.

Breaking with Voting Traditions

Zohran Mamdani, the 34-year-old socialist, ran a fiery campaign rooted in the Democratic Socialists of America (DSA) agenda. He took aim at the city’s capitalist elite, called for defunding the police, and proposed sharp tax increases. Yet perhaps his most formidable hurdle was the Jewish electorate, divided between concerns over his outspoken anti-Israel views and apprehensions about his Muslim identity.

Their anxieties were amplified by a vast media campaign led by mainstream Zionist institutions in the US.

Jewish voters in New York representing approximately 15% of the electorate traditionally fall into ideological camps: secular, unaffiliated, Reform, Conservative, and Orthodox. According to Jewish News Syndicate (JNS), 47% are secular or unaffiliated, 20% Reform, 15% Conservative, and 19% Orthodox. The ultra-Orthodox, concentrated in Brooklyn, lean heavily Republican, while moderate Orthodox Jews tend to swing based on the candidate.

These patterns, however, offered little guidance in the 2025 Democratic primary. For the first time, a Muslim, pro-Palestinian candidate was not only viable but victorious. Mamdani defeated Independent candidate Andrew Cuomo in a decisive primary win, despite early polling suggesting Jewish voters would gravitate toward the staunchly pro-Israel former governor.

Observers argue that Mamdani did not so much create a new fracture in the Jewish community as expose one already in place. Age and ideology emerged as the defining divides. Jewish voters known for their “liberal Zionism” appeared particularly conflicted.

Samuel Abrahams of the American Enterprise Institute notes that Mamdani’s victory revealed a profound moral split within a community long mythologized as monolithic. In neighborhoods like Park Slope, Prospect Heights, and Clinton Hill, 90% of Jewish voters supported Mamdani. These voters skew young, highly educated, and left-leaning. Social media plays a central role in shaping their worldviews, and they tend to distance themselves from Orthodox institutions and establishment Zionism.

Meanwhile, across the East River in Boro Park, Crown Heights, and Manhattan’s Upper East Side, support for Cuomo reached 80%. These communities are wealthier, more conservative, highly religious, and deeply connected to Israel. Their political and communal identities are shaped by traditional Jewish institutions.

Generational divides are also crucial. A 2024 Pew Research Center survey found that only 45% of American Jews under 35 view Israel positively, compared to 64% of those over 50. A Washington Post poll reported that just 38% of Jews aged 18 to 34 feel connected to Israel, far below the national average of 56%.

Religious affiliation plays a key role, too. In Pew’s 2021 study, 82% of Orthodox Jews expressed strong ties to Israel, compared to less than 60% of Reform and unaffiliated Jews. Yet, even among those who feel a connection, Israel is rarely a top priority.

A 2024 Democratic Jewish Polling survey found that only 9% of American Jews named Israel among their top two political concerns. Issues like democracy (44%) and abortion rights (28%) ranked far higher.

Fearmongering and Pushback

In the run-up to the election, pro-Israel rabbis and media outlets launched a fear-based campaign against Mamdani. Rabbi Elliot Cosgrove of Park East Synagogue led the charge, supported by over a thousand Zionist rabbis nationwide. Mainstream outlets including The Wall Street Journal, The New York Times, and The Washington Post amplified the alarmist rhetoric.

The campaign conflated criticism of Israeli policies occupation, apartheid, and the war on Gaza with antisemitism. Cosgrove urged Jewish voters to prioritize religious and Zionist identity over everyday concerns that might lead them to back Mamdani.

Andrew Cuomo, eager to exploit the tension, pledged allegiance to Israel and labeled Mamdani a “terror sympathizer.” His inflammatory rhetoric was echoed by figures like Donald Trump, Republican Rep. Elise Stefanik, and Democratic Rep. Laura Gillen, who branded Mamdani a “jihadist” and Hamas supporter. Cuomo ultimately secured 63% of the Jewish vote, while Mamdani captured 33%.

Yet progressive Jews fought back. Groups like Bend the Arc: Jewish Action and Jewish Voice for Peace endorsed Mamdani as a defender of pluralism and justice. Thousands of rabbis signed letters supporting him, condemning Zionist fear tactics, and asserting that real Jewish values align with compassion and equity not Israeli nationalism.

Even within the insular Hasidic Satmar community, two factions chose not to endorse any candidate. One circulated a letter highlighting Mamdani’s pledges to protect religious schools, subsidize childcare, and ensure affordable housing. This ambiguity led to widespread abstention among the 80,000-strong Haredi voting bloc.

Bridge-Building Amid Hostility

Despite fierce opposition, Mamdani continued outreach to Jewish communities. He attended holiday services at major synagogues, met with Hasidic leaders in Williamsburg, addressed congregants at Beth Elohim, and published an op-ed in Hasidic Yiddish outlining his anti-hate initiatives.

He also met publicly and privately with establishment Zionist rabbis including Rabbi Cosgrove, Rabbi Emil Hirsch of Stephen Wise Free Synagogue, and Rabbi Joseph Potasnik, head of the New York Board of Rabbis.

Mamdani assured them of his commitment to combating antisemitism and increasing police protection for synagogues, while maintaining his support for Palestinian rights and the Boycott, Divestment, Sanctions (BDS) movement.

With measured language, Mamdani pledged to avoid slogans like “Death to the IDF” and “Globalize the Intifada,” which Jewish leaders might interpret as incitement. He retained Police Commissioner Jessica Tisch as a gesture of continuity and trust.

Charismatic and tactful, Mamdani forged rare alliances across Jewish factions from progressive activists to liberal Zionists. He earned backing from prominent figures like former Manhattan Borough President Ruth Messinger and City Comptroller Brad Lander. Even Rep. Jerry Nadler endorsed him, while Senate Majority Leader Chuck Schumer remained neutral, signaling the tensions between political loyalty and religious ideology.

An Old Fracture Reopened

Felicia Wisdem of the Jewish New York Agenda argues that Israel’s war on Gaza and the collapse of the two-state solution forced New York’s Jews to confront a painful contradiction. For many, voting for Mamdani would once have been unthinkable. Now, even some anti-Netanyahu Zionists backed him.

In a tongue-in-cheek CNN op-ed titled “I Hate My Options: How Mamdani’s Run Split New York Jews,” voters described their inner turmoil: Should they focus on city policy or fear retribution from a pro-BDS mayor? Most chose Cuomo—the “lesser evil”—despite acknowledging their dislike for him.

The pro-Israel stance remains dominant among New York Jews, but its foundations are beginning to shift. Many who voted for Cuomo kept their preferences private, wary of the cognitive dissonance between a faltering Zionist dream and a city increasingly critical of Israel.

Among the broader Jewish population, the rift is more visible. The image of a “unified Jewish vote” is dissolving. Following Mamdani’s victory, progressive synagogues issued a public letter invoking the Prophet Jeremiah’s call to “seek the peace of the city,” urging cooperation with the new mayor.

Bend the Arc framed the post-election moment as a chance to rebuild fractured communal ties. It called for a new coalition that transcends generational and ideological divides and redefines what it means to be Jewish in New York today.

The notion of a single, monolithic Jewish voting bloc that once crowned kings and toppled opponents is now a thing of the past.

Zoran Mamdani’s election as mayor of New York City last November sent ripples far beyond the city itself. The son of Ugandan-Indian Muslim immigrants, a practicing Muslim, and an avowed socialist, Mamdani embodies multiple identities that challenge the traditional political narrative. His win, backed by a largely progressive base, says as much about the man as it does about the state of the Democratic Party in one of America’s most influential cities.

Mamdani’s victory, as a progressive leftist Democrat, speaks volumes about the Democratic Party’s ongoing internal struggle a battle that has intensified since October 7, 2023. While centrist and conservative Democrats view this shift with apprehension, liberals and progressives see it as a necessary evolution, a historical inevitability that the party must embrace to remain relevant in an era of sweeping global change. Otherwise, the Democrats risk losing their identity, uniqueness, and electoral base.

So, what does Mamdani’s win signify for the Democratic Party? Is the party undergoing a painful transformation toward a more progressive, globally attuned future? Or will conservative forces prevail, pulling it closer to Republican philosophies?

Are these shifts tied to Israel’s war on Gaza? Or are they rooted in economic stagnation and rampant inflation? Does Mamdani’s election mark the beginning of a lasting realignment? Or is the party merely bending to the storm, waiting to revert once the winds die down? This article explores these pressing questions.

Is This the Socialist Moment?

As a member of the Democratic Socialists of America (DSA), Mamdani championed a bold socialist agenda in a city strangled by racial capitalism. His platform calling for rent freezes, free public buses, state-run grocery stores, a higher minimum wage, and free childcare struck a powerful chord with urban voters.

These are people squeezed out of the housing market and labor force, with working-class and low-income families barely surviving in a city increasingly hostile to their existence.

In a tweet following the election, the DSA said Mamdani’s win accelerated the spread of its principles, reigniting hope for meaningful working-class political engagement. His youthful volunteer army, operating without significant backing from the Democratic establishment or centralized funding, pulled off an electoral upset: Mamdani secured over 2 million votes (50.4%), compared to 41.6% for independent Andrew Cuomo and 7.1% for Republican Curtis Sliwa.

The DSA, now boasting 80,000 active members across college campuses and workplaces nationwide, distances itself from the authoritarian socialist regimes of the Cold War era and from watered-down social democracy. It advocates for democratic planning that is both humane and economically pragmatic, rejecting both corporate domination and unrealistic idealism.

While refusing the “radical” label, the DSA believes incremental reforms aren’t enough. They understand that capitalism, deeply entrenched in the global economy, won’t collapse overnight. Their aim is not a revolution, but a shift in power from corporations to workers through realistic strategies.

The DSA has already scored major victories. Alexandria Ocasio-Cortez’s 2018 upset win over Joe Crowley and Mamdani’s own election to the New York State Assembly in 2021 are testaments to its grassroots strength. Figures like Bernie Sanders, though not a member, remain central to its ideological orbit, as does Rep. Rashida Tlaib of Michigan.

Yet Mamdani’s campaign was pragmatic. He distanced himself from some of the DSA’s more polarizing stances, particularly its call to defund the police. Once a vocal critic of law enforcement, Mamdani softened his stance during the campaign, offering instead a cooperative approach aimed at reform rather than abolition.

Even so, Mamdani’s win doesn’t necessarily signal a socialist surge nationwide. New York’s unique demographics a city of immigrants and working-class majorities—favor his brand of politics. In more conservative locales like Minneapolis, DSA-backed candidates have struggled. But in America’s major cities, Mamdani’s success is a harbinger of a larger shift.

A Party at War with Itself

Cuomo, the moderate Democrat Mamdani defeated, called the party’s internal tensions a “civil war” – a stark divide between centrists and the progressive wing. While the Democratic establishment has previously co-opted social democrats like former NYC Mayor Bill de Blasio, Mamdani’s unapologetically socialist message is far more jarring.

Many prominent Democrats, including Senate Minority Leader Chuck Schumer, remained silent during Mamdani’s campaign, worried that his anti-Israel and socialist leanings could damage the party ahead of the 2026 midterms. Others, like Rep. Tom Suozzi, openly criticized Mamdani as a well-meaning but misguided radical whose policies would drive the wealthy and businesses out of New York.

From Suozzi’s perspective, taxing the rich to fund social programs would push capital elsewhere. His solution? Strengthen unions, raise wages modestly, and make piecemeal improvements a strategy many younger Democrats see as outdated and insufficient.

Democratic strategist Tip Yang believes the party is watching Mamdani closely. After devastating losses in 2024, Mamdani may represent the future: a leader focused not on abstract ideological purity but on concrete, people-centered solutions. His willingness to engage even his fiercest critics sets him apart in a political climate marked by tribalism and cowardice.

Critics who call Mamdani a dreamer ignore a key fact: corporate profits have soared, doubling in just five years. His proposed corporate tax hike from 7.25% to 11.5% is modest in light of that windfall. As the ruling party in the city, Democrats risk existential crisis if they continue prioritizing capital over people.

The progressive group Justice Democrats echoed this sentiment, calling Mamdani’s win a wake-up call. The party has historically thrived when grounded in working-class concerns. By reconnecting with that base, they argue, Democrats can revitalize their mission without abandoning their core values.

Writing in The Guardian, Democratic scholar Robert Reich described the party as “virtually dead,” plagued by ideological confusion. Mamdani, he argued, offers a rare chance to unify Democrats around real issues. Reich blasted calls for “centrist moderation” as a smokescreen for corporate loyalty, accusing both Trump-era Republicans and establishment Democrats of authoritarianism in different clothes.

Youth and Immigrant Voters: The Party’s Missing Link

Mamdani’s rise reveals a generational rift within the party. Older centrists continue to cater to elites, while younger voters alienated by stagnant wages and widening inequality are turning left. A recent Gallup poll (September 2025) found that 66% of Democrats now view socialism favorably, while only 42% lean toward capitalism. Support for big corporations among Democrats plummeted to 17%, compared to 46% in 2010.

Youth disillusionment began with the 2016 election, deepened during COVID, and has been exacerbated by the party’s stance on Gaza. These frustrations have fueled support for the party’s left flank, which is more outspoken and aligned with international human rights.

Demographic change is another factor. New York is no longer a majority-white city. Latinx, Black Caribbean, African, and Asian communities now make up significant portions of the population and voted overwhelmingly for Mamdani. These voters have shifted the party’s electoral foundation over the past 40 years, yet establishment Democrats have largely failed to adapt.

Some, like Cuomo, have even mimicked Republican rhetoric on immigration. In contrast, Mamdani offered an inclusive message: “New York belongs to migrants and always will.” That message broke the party’s cycle of tokenism, instead affirming immigrants as central to the city’s identity.

As Rep. Alexandria Ocasio-Cortez told CNN, the party cannot continue to marginalize young people and communities of color and expect to survive. Mamdani’s win proves the cost of ignoring them.

When Gaza Shifted the Compass

Mamdani’s unflinching support for Palestinian rights was central to his campaign. He condemned Israel’s war in Gaza as a genocide and vowed to arrest Benjamin Netanyahu if he set foot in the city. This stance alienated party elites but resonated with the base. A Pew poll in March 2025 showed 69% of Democrats disapprove of Israeli policies in the occupied territories up from 53% in 2022.

Still, key Democratic leaders have continued supporting Israel. Cuomo and former Mayor Eric Adams both accused Mamdani of antisemitism a tactic seen as more about political survival and shielding corporate donors than genuine concern.

Even some Republicans have shifted. MAGA figures like Tucker Carlson and Steve Bannon now openly criticize Israel, forcing Trump to recalibrate. J.D. Vance, Trump’s running mate and potential 2028 contender, called criticism of Israel “healthy” and defended anti-Zionist speech.

The war has also fractured New York’s Jewish community. While pro-Israel groups mounted a fierce campaign against Mamdani, many young Jewish voters rejected this narrative, voting for him in large numbers. The myth of a monolithic Jewish vote long used to justify unconditional support for “Israel” has cracked.

A Party Shaken Awake

Mamdani’s victory over Cuomo, a seasoned political heavyweight and embodiment of establishment power, was more than an upset. It was a wake-up call to a party that believed old wisdom could withstand new realities. As the city’s demographics evolve and global crises reshape public consciousness, the Democratic Party faces a crossroads: cling to the past, or embrace a future defined by diversity, justice, and grassroots power.

The ascent of Mamdani and other progressives signals that change is not only possible it may be inevitable. The question now is whether the Democratic establishment is ready to listen.

Zahran Mamdani’s election as mayor of New York City is remarkable on several fronts. A newcomer to politics, the son of immigrants of color who arrived in pursuit of a better future in a white supremacist society, Mamdani brings a clear socialist worldview to a city gripped by rampant capitalism.

On top of that, he is a practicing Muslim who embraces his religious identity, even invoking it when addressing major global injustices most notably, the Palestinian cause, despite its sensitivity among some of the city’s most powerful and wealthy groups.

But Mamdani’s mayoralty resonates even more powerfully with the communities from which he emerged those long marginalized in the city. Muslim New Yorkers, who have endured waves of Islamophobia since the September 11 attacks. Immigrants, hounded through the streets under Trump-era policies.

And pro-Palestinian advocates, whose voices fueled one of the city’s largest grassroots uprisings in recent years in response to the massacres in Gaza, atrocities New York institutions have indirectly funded through financial and educational systems.

So what impact will Mamdani’s administration have on religious freedom in the city? How will he deal with the Zionist movement that dominates much of the city’s political and financial power structures? Will he risk an early clash, or compromise on the principles that helped him win?

And where does he stand on the pro-Palestinian movement will he fully embrace its demonstrations, boycotts, and activism, despite the potential backlash from Zionist institutions? Or will he opt for a diplomatic balancing act between opportunity and risk?

Islamophobia Shadows Mamdani

Mamdani has faced a barrage of Islamophobic attacks rooted in both his identity and political positions. According to a report by the Council on American-Islamic Relations (CAIR), Islamophobic content on X (formerly Twitter) surged during the New York mayoral election cycle, with over 35,000 anti-Muslim posts between June 24 and October 31. Politicians and media outlets hostile to Mamdani painted him as an “external threat” to the city’s security and culture ignoring his deep roots in New York’s neighborhoods.

He was smeared as a “jihadist,” “radical Muslim,” and someone pushing for Sharia law, further endangering Muslim communities by inciting hate and potential violence.

The campaign against him intensified dramatically in October, with Islamophobic posts on X rising 450% compared to the previous month 43% of all posts on the platform during that period were anti-Muslim. Mamdani responded with a press conference on October 24 to counter the accusations against him and his campaign.

Even political rivals joined in. Former New York Governor Andrew Cuomo, a Democratic contender, mocked Mamdani on a radio show by asking how he would handle “another 9/11,” laughing when the host joked he would celebrate it. CAIR condemned Cuomo’s remarks as flagrantly anti-Muslim.

Sensitive to the complex religious makeup of New York, Mamdani pledged during his campaign to increase funding for hate crime prevention by 800% and to support interfaith and cross-cultural initiatives. In his victory speech, he vowed to build an inclusive, diverse administration that would stand against both antisemitism and Islamophobia.

A Unique Relationship with the City’s Jews

Mamdani took a proactive approach in his campaign to engage the Jewish community, visiting prominent synagogues such as Park Slope to reassure congregants. Olivia Ringold of The Free Press claimed he promised to appoint Zionists to his administration, though his office neither confirmed nor denied the report.

The city’s Jewish leadership remains divided. Rabbi Elliot Cosgrove of Park Avenue Synagogue views Mamdani as a threat due to his outspoken calls for a Gaza ceasefire and opposition to U.S. arms to Israel. Conversely, Jamie Beran of Bend the Arc praised his anti-antisemitism agenda, emphasizing that criticism of Israeli policies should not be conflated with hatred of Jews.

Despite the controversy, Mamdani secured 33% of the city’s Jewish vote. By comparison, 63% went to Cuomo and just 3% to Curtis Sliwa. Mamdani dominated among secular and Muslim voters, earning 75% of the non-religious, 70% of Muslims, 42% of Protestant Christians, and 33% of Catholics.

He also garnered significant support from the city’s Satmar Hasidic community, which is staunchly anti-Zionist and has Eastern European roots. Mamdani met with Satmar leaders several times and was warmly received.

Zionist Efforts to Discredit Mamdani

Zionist groups in New York have mobilized to undermine Mamdani under the guise of protecting religious freedoms. The Anti-Defamation League (ADL) launched “Mamdani Watch: Accountability for NYC’s Government,” vowing to scrutinize his policies, appointments, and actions for any ties to Palestinian advocacy.

Labeling Mamdani antisemitic, the ADL claimed his administration could endanger Jewish institutions already facing rising harassment post-October 7. The group reported 976 antisemitic incidents in 2024 in New York alone and established a hotline to report future cases, preemptively blaming Mamdani for any uptick.

Other Zionist organizations followed suit, painting Mamdani as biased toward pro-Palestinian voices. Yet he held his ground. When accused of endorsing a protest outside Park East Synagogue where chants included “Globalize the Intifada” and “Death to the IDF,” he responded that sacred spaces should not facilitate violations of international law a veiled reference to Israeli settlements. He later clarified that while protest is protected speech, calls for death are unacceptable.

Despite this, the ADL and other groups intensified accusations that Mamdani was failing to safeguard Jewish New Yorkers. The American Jewish Committee (AJC) further fanned the flames, demanding that most of the city’s hate crime prevention funding go toward Jewish communities and pushing Mamdani to equate anti-Zionism with antisemitism a controversial definition adopted by some Holocaust remembrance institutions but criticized by civil rights advocates.

Inherited Institutions and Strategic Shifts

Mamdani inherits a complex web of religious and community initiatives from former Mayor Eric Adams, including the Office of Faith and Community Partnerships, which has funneled over $1.5 million into religious organizations. Under Adams, Christian and Jewish groups received the lion’s share of this funding, with minimal outreach to Muslims.

Now, with Mamdani at the helm, Zionist outlets have begun preemptively accusing him of using this office to favor Muslim institutions. They also point to programs like “Breaking Bread, Building Bonds,” designed to foster interfaith dialogue but, in practice, used to promote a Zionist narrative under Adams.

Mamdani is expected to pivot promoting equality among religious groups while resisting the conflation of Judaism with Zionism. The New York chapter of the Center for Constitutional Rights has urged his administration to ensure city funds do not entrench religious favoritism.

Reverend Chloe Breyer of the Interfaith Center of New York called Mamdani’s election a landmark in the fight against religious bias, particularly in a post-9/11 city where a Muslim mayor once seemed unthinkable.

Dancing with Serpents

Mamdani’s toughest challenge lies in navigating the deliberate conflation of Judaism and Zionism, a tactic used to suppress Palestinian solidarity. Any misstep could lead to accusations of antisemitism, amplified by Zionist control over major financial and political institutions in the city.

Notably, Mamdani chose to retain NYPD Commissioner Jessica Tisch, a known pro-Israel Zionist, signaling a pragmatic desire to avoid open confrontation. Yet his earlier statements such as calling Israel’s war on Gaza “genocide” and vowing to arrest Netanyahu for war crimes have alarmed Zionist circles from Washington to Wall Street.

While Mamdani has softened his rhetoric in recent months, backing away from slogans like “From the river to the sea” and “Globalize the Intifada,” critics argue that his shift was politically motivated rather than ideological. In a secret December meeting with prominent New York rabbis including his fiercest critics—Mamdani struck a diplomatic tone. The rabbis described the discussion as “constructive,” though some, like Rabbi Hirsch, admitted to lingering fears.

A BDS Standard-Bearer

Mamdani’s support for the Boycott, Divestment, and Sanctions (BDS) movement is another flashpoint. He plans to dismantle the New York-Israel Economic Council and divest city pensions from Israeli bonds, calling such investments a violation of international law. However, he clarified that private companies would retain freedom of association with Israel.

In anticipation, Adams issued executive orders banning BDS policies within city agencies and tightened restrictions on protests near places of worship. One order bars city staff from discriminating against Israeli entities in contracts and investments.

While Mamdani could reverse many of Adams’s executive decisions, including the controversial definition of antisemitism that equates it with anti-Zionism, doing so will invite intense scrutiny and backlash. He may need to restructure rather than abolish some city bodies targeting antisemitism.

Netanyahu Behind Bars?

Among Mamdani’s most dramatic promises is to have Netanyahu arrested in New York if he visits, based on an ICC warrant for war crimes. Legally, Mamdani lacks the authority to enforce such an arrest; the U.S. is not party to the Rome Statute, and foreign leaders enjoy immunity. Congress members have already proposed legislation to block funding to any U.S. city attempting such arrests.

Netanyahu mocked the threat, calling it a joke, but said he would gladly meet with Mamdani if the latter changed his views.

Campus Protests and Free Speech

Mamdani has a personal history of student activism and pledged to defend campus protests and freedom of assembly. As a student at Bowdoin College, he co-founded Students for Justice in Palestine and later went on hunger strike demanding a Gaza ceasefire.

Though the mayor has limited formal authority over universities, his office influences policing, public order, and funding tools that can shape campus climates. This sets up a likely showdown between Mamdani’s support for protest rights and pressure from pro-Israel groups citing “public safety” and so-called “hate speech.”

Mamdani’s four-year term beginning January 1 will test not only his resolve but the city’s very definition of justice, pluralism, and international solidarity. New York may become a global battleground where the fight for Palestinian rights, and broader struggles against religious discrimination, will either be crushed or find renewed strength. Mamdani, his supporters, and his detractors all know: the stakes could not be higher.

For months leading up to New York City’s mayoral election, tension defined the relationship between its winning candidate, Zohran Mamdani, and the Washington establishment especially Donald Trump. The mutual accusations and war of words dominated front pages and captured widespread attention not merely as signs of a growing rift in American politics, but as an ominous precursor to a looming clash between the nation’s capital and its economic powerhouse.

Should this confrontation erupt, the ramifications could extend far beyond Washington and New York, threatening the broader security and economic stability of the United States.

Trump, rallying behind Andrew Cuomo the former New York governor and staunch ally of the city’s pro-Israel elite launched into full attack mode. He accused Mamdani of “communism,” extremism, and advancing dangerous socialist ideas.

At various points, Trump threatened to revoke Mamdani’s U.S. citizenship, which would disqualify him from office, and to cut federal funding to New York City, one of the largest beneficiaries of federal aid, if the progressive front-runner were elected.

Can Trump Stop Mamdani?
How much does New York rely on federal funds, and can they be legally cut off? What alternatives does Mamdani have? How will he confront a hostile federal government? And what about New York’s contentious immigration policies, or the potential deployment of the National Guard? This article explores the various scenarios in what is shaping up to be a dramatic showdown between Mamdani and Trump and, behind them, the American political establishment.

Fiery Threats

As Mamdani edges closer to Gracie Mansion on Manhattan’s Upper East Side, Trump took to Truth Social to issue dire warnings. He predicted the “failure of the socialist experiment” in his beloved hometown and pledged to limit federal funding to the legal minimum. He encouraged voters to back Cuomo, insisting he would rather see a successful Democrat than a failed socialist at the helm. Trump reiterated the same threats in a “60 Minutes” interview on CBS News.

New York City primarily funds itself through local taxes, service fees, and non-tax revenues such as licensing and infrastructure. Federal funding accounts for only 6.4% of the city’s total budget.

The state government contributes billions to support city programs in education and health, while federal funds are largely directed toward nutrition, housing, and education. According to a report published on April 28, 2025, by New York State Comptroller Thomas DiNapoli, the state expects to require around $7.4 billion in federal support for its 2026 operating and capital budgets.

New York City has ambitious investment plans for 2026–2029 totaling $93 billion. These projects depend heavily on both state and federal backing.

The city’s most recent financial plan, released by the comptroller in November, projects an increase in federal funding needs to 8% approximately $8.6 billion of a total budget nearing $118 billion. Much of this money would go toward health, education, and social services, including shelters for the homeless and support for disadvantaged groups. The Temporary Assistance for Needy Families (TANF) program received the largest non-pandemic federal grant for fiscal years 2025 and 2026.

Though modest in percentage, federal funding plays a critical role in supporting New York’s most vulnerable. Mamdani’s ambitious agenda—to uplift these communities and make the city more affordable requires either federal backing or a viable replacement.

Can Federal Funds Be Cut?

The U.S. Constitution is clear about who controls federal spending. Under Article I, Section 9, funds may only be drawn from the Treasury through appropriations authorized by federal law. Article I, Section 8 empowers Congress not the president to levy taxes and decide how funds are spent, including federal allocations to states.

In short: the president cannot unilaterally withhold congressional appropriations. Doing so would be unconstitutional.

That said, presidents have historically used federal funding as leverage. In the 1970s, President Richard Nixon attempted to block funding for programs already approved by Congress. The courts rejected his arguments, reaffirming congressional power.

In response, Congress passed the Impoundment Control Act (ICA) of 1974. This law allows the president to delay, but not cancel, congressional funding for up to 45 days. After that, Congress must explicitly approve any continued freeze otherwise, the funding is automatically released.

Congress may impose conditional funding on states, but only if those conditions relate to the purpose of the funds and are not arbitrary or punitive. With Republicans currently holding majorities in both the House (220 seats) and Senate (53 seats), there is a real possibility of restrictive funding conditions being placed on New York.

These conditions, however, cannot be extreme or retaliatory. Any such measures would likely face legal challenges if seen as politically motivated attempts to punish Mamdani.

A Targeted Assault on New York

Trump’s antagonism toward New York City predates Mamdani’s rise. Even under the centrist, pro-Israel Mayor Eric Adams, the Trump administration implemented multiple freezes and cuts to federal funding.

Since Trump returned to office this January, his administration canceled a $34 million grant for counterterrorism efforts in the subway system, citing the city’s failure to comply with his immigration agenda. The city successfully challenged the decision in court, where the judge deemed it arbitrary and unconstitutional.

Similarly, an $80 million federal grant for shelters was withdrawn because the city housed undocumented immigrants. Adams filed another lawsuit, which is still pending.

Another $47 million grant for public schools was revoked over alleged non-compliance with the administration’s binary gender policies, ignoring the rights of trans and queer students. Once again, City Hall sued the federal government, and that case also remains in litigation.

The October 1st government shutdown triggered further cuts, including an $18 billion infrastructure freeze statewide. While the specific impact on NYC is unclear, DiNapoli estimates the city stands to lose $400 million in FY2025 and $135 million in FY2026.

The Search for Alternatives

Federal funding cuts especially to education, housing, and social services would force the city and state to compensate. This could mean slashing other programs, increasing taxes, or abandoning Mamdani’s promises of free buses, state-run grocery stores, rent freezes, and universal early childcare. These ambitious initiatives rely on multi-billion-dollar budgets that federal cuts would severely undermine.

Governor Kathy Hochul, a Democrat, maintains a delicate relationship with Trump. Unlike other Democratic governors, she has managed to strike agreements with him on key issues like counterterrorism funding and environmental projects thanks in part to Trump’s personal business interests in New York.

It’s unclear whether Hochul would risk that fragile détente to defend Mamdani. She is up for reelection in the upcoming midterms and may be hesitant to provoke the White House. Yet Mamdani controls the state’s most influential city and has broad support from constituencies Hochul will need. Aligning too closely with Trump could alienate her base.

The National Guard Threat

Trump’s tactics aren’t limited to funding. He has a history of deploying National Guard troops to cities with Democratic mayors, particularly those with sanctuary policies for undocumented immigrants. Cities like Washington, D.C., Portland, and Los Angeles have already witnessed this.

New York has yet to see National Guard deployment, but the threat looms. Trump has openly said he will “clean up” the city if Mamdani wins, using federal troops if necessary. Mamdani, like other mayors, has vowed to challenge any deployment in court.

Immigration enforcement adds another layer. New York, historically a safe haven for immigrants, does not cooperate with ICE. Trump has increased ICE activity in immigration courts, where agents have arrested hundreds attending routine hearings.

Mamdani, himself a Ugandan immigrant, is taking a tougher stance than his predecessor Adams, who cooperated with the administration. After federal bribery and fraud charges were dropped against Adams a move widely seen as political he resigned.

In contrast, Mamdani has declared that ICE and the National Guard are not welcome. He calls New York the city of immigrants built by them, governed by them and has threatened to arrest any ICE agents who violate city laws.

A Showdown on the Horizon

To counter Trump’s immigration crackdown, Mamdani is building a coalition that includes Governor Hochul and Attorney General Letitia James. While the mayor’s legal authority to block National Guard deployment is limited, he can mobilize public opinion and push the state government and civil society to act.

Other Democratic cities have done the same. Mayors in Chicago, Portland, and Oregon launched legal challenges against Trump’s use of federal troops. Mamdani can similarly empower citizens to document abuses and submit them to the Attorney General’s office, strengthening any legal case.

The president’s authority to deploy the Guard is tightly constrained. It applies only in extreme situations like rebellion or foreign invasion and does not extend to routine law enforcement. The courts are likely to reject such deployments in civil contexts.

Mamdani is also expanding the city’s legal resources. In a policy paper titled Confronting Trump, he announced plans to hire 200 new city attorneys to challenge federal overreach. He is also seeking alliances with Wall Street, much like San Francisco Mayor Daniel Lowry, who pressured Trump through tech industry leaders to scale back anti-immigration policies.

Democratic mayors across the country are responding similarly. Los Angeles Mayor Karen Bass staged symbolic protests in immigrant neighborhoods, while Chicago’s Brandon Johnson signed an executive order banning federal law enforcement from city properties.

Despite the cordial tone of their White House meeting in late November, a high-stakes clash appears imminent between Mamdani and Trump over immigration, federal funding, and the role of cities in national politics. Trump is unlikely to hold back in his campaign to derail the young, socialist immigrant now governing his hometown. But Mamdani, too, is preparing strategizing alliances, reinforcing legal defenses, and rallying the people who helped elect him.

The outcome of this confrontation will shape not only Mamdani’s fledgling administration but also the future of Trump’s approach to Democratic cities over the next three years. Its repercussions will be felt by millions of Americans.

“The Big Apple” or “The City That Never Sleeps” New York is now handing over its keys to a young man of immigrant roots, a practicing Muslim with a socialist ideology. He represents a fundamentally different model from any of his predecessors in a city with a truly global identity.

This article sheds light on Zohran Mamdani’s program as the new Mayor of New York, exploring what he can realistically achieve, what lies beyond his authority, and whether he can genuinely reshape the face of this iconic city. We assess his potential impact on issues relevant to Arabs and Muslims from immigration, religious freedom, and national belonging to his relationship with Trump and whether the latter can derail the ambitious young mayor chosen by New York.

We also examine the complex dynamic between Mamdani and the city’s Jewish community one of the largest outside Israel and trace recent shifts within the Democratic Party. Are these changes tied to our region, or are they mere side effects of America’s political turbulence?

A former Dutch colony once called “New Netherland,” New York today is one of the world’s most dynamic and complex cities, with a population nearing 8.5 million, a workforce of over 300,000, a police force of nearly 35,000, and a budget exceeding $120 billion. Its GDP rivals that of ten countries combined, reaching $1.3 trillion. Millions of children attend its public schools, and just as many ride its public transit daily.

Mamdani now oversees all this with considerable authority. His campaign carried lofty promises—some labeled them dreamy, others saw real hope for change. Since assuming office in January 2026 for a four-year term, the question remains: can Mamdani deliver on his promises? What are his powers? What constraints does he face? What forces may help—or hinder—his agenda? This article explores these questions in depth.

Between the City Council and the Governor: Who Holds the Mayor in Check?
Mamdani is not new to politics. Despite his youth, he has served in public office since 2021 as a state assemblyman representing Astoria in Queens. But the mayoralty is a different beast altogether he is now the city’s chief executive, with vast powers.

He appoints and dismisses commissioners of about 30 key city agencies police, fire, transportation, finance, cultural affairs, small business services, and many more. He also oversees more than 200 committees and councils that govern housing, complaints, economic development, infrastructure, and beyond.

His role impacts city contracts and includes appointing judges to criminal and family courts, and temporarily to civil courts. Mamdani also sits on the boards of public libraries, museums, arts centers, parks, hospitals, and the city’s health corporation.

Yet despite his sweeping powers, the mayor remains one actor within a broader system of checks and balances. The State Legislature in Albany, composed of the State Senate and Assembly, operates much like a state-level Congress. Above all stands the Governor, whose jurisdiction includes New York City.

The relationship between city and state is fraught, shaped by shifting alliances and competing interests. Mayors have often clashed not with federal Republican governments, but with their own state’s Democratic leadership. Former Mayor Bill de Blasio (2014–2021) was famously stymied by Governor Andrew Cuomo (2011–2021)—ironically, Mamdani’s rival in the mayoral race who blocked de Blasio’s proposal to tax the wealthy to fund universal pre-K, striking a deal with state Republicans instead.

In contrast, former Mayor Michael Bloomberg understood these constraints well. Rather than confront the city’s power brokers, he focused on non-controversial goals: environmental reform, youth employment, and public health achieving success without altering the city’s deeper power structures.

Mamdani enjoys notable support from Governor Kathy Hochul and legislative leaders like State Senate Majority Leader Andrea Stewart-Cousins and Assembly Speaker Carl Heastie, who backed his campaign. But support is not guaranteed compliance.

Hochul is up for re-election in 2026 and may avoid alienating powerful donors by endorsing steep tax hikes. Moreover, Mamdani’s influence wanes outside New York City, limiting his leverage with legislators representing other districts.

Crucially, the City Council—New York’s legislative body—plays a pivotal role. Under the city’s separation of powers model, only the Council can pass laws on housing, labor, tech, safety, health, environment, and other daily concerns. The mayor may propose and sign bills—or veto them. The Council, however, can override a mayoral veto with a two-thirds vote.

Tensions are frequent. The Council has repeatedly overridden mayoral vetoes—on wage laws, business regulations, and police policies. Mayor Eric Adams’s objection to restricting liquor licenses in the Bronx, for instance, was dismissed due to public and commercial pressure.

Ultimately, the mayor must function as a central cog in the city’s machinery—success depends on compromise and coalition-building, not unilateral control.

From Top to Bottom: The Tax Debate

Taxes formed the cornerstone of Mamdani’s campaign. The fervent socialist pledged to raise taxes on the city’s ultra-wealthy figures like Michael Bloomberg, Ralph Lauren, Rupert Murdoch, Julia Koch, Stephen Schwarzman, and Chase Coleman. Many funded efforts to defeat him, pouring $40 million into campaigns supporting rivals like Andrew Cuomo and Curtis Sliwa via PACs like “Fix the City” and “Defend New York.”

While some of this opposition was rooted in pro-Israel and anti-Muslim sentiment, the lion’s share stemmed from Mamdani’s aggressive tax platform: $5 billion in levies on major corporations and capital gains, and a new tax on individuals earning over $1 million annually.

Yet Mamdani lacks unilateral authority to implement these hikes. While he controls the city’s budgetary planning, significant tax changes require approval from the Governor and both chambers of the State Legislature. Raising the corporate tax from 7.5% to 11.5%, for instance, hinges on his ability to forge alliances in Albany.

Critics argue that higher taxes will drive out businesses and residents. Some, like millionaire grocer John Catsimatidis, have threatened to relocate to New Jersey or Florida. Opponents claim this could tarnish New York’s global financial reputation.

Housing: New York’s Core Crisis
Skyrocketing rents plague New Yorkers, two-thirds of whom are renters. Citywide, housing costs are double the national average, and inflation continues to erode affordability. Although laws cap rent increases in certain pre-1974 buildings with six or more units, housing remains a flashpoint.

Mamdani pledged to freeze rent hikes during his term—a promise that helped him defeat Cuomo in the Democratic primary. He also vowed to build 200,000 permanently affordable housing units over the next decade and expand public housing programs.

As mayor, Mamdani appoints the nine-member Rent Guidelines Board, which sets annual rent adjustments. Though theoretically plausible, a rent freeze could backfire if not carefully managed, hurting small landlords struggling with inflation-driven maintenance costs. With nearly 1 million such units citywide, balance is critical.

Previous mayors have often sided with landlords. Mayor Eric Adams’s board approved a 4.5% increase on two-year leases and 3% on one-year leases—a move that Mamdani used as a rallying cry. Still, rent freezes are possible: Bill de Blasio enacted three during his tenure.

Public Transit: Right or Revenue Source?

Mamdani’s boldest transport pledge was free bus service. Public transit is New York’s lifeline, costing $21 billion annually, funded through fares, tolls, and taxes. Eliminating fares could create a shortfall of $600–800 million, requiring state-level approval and cross-agency support.

Mayor Eric Adams piloted free service on five bus routes from 2023 to 2024. The program ended due to high costs and traffic congestion, despite a 30% ridership boost. The state’s transportation authorities—and not the mayor—control most transit policy, complicating further efforts.

While Mamdani envisions free buses citywide, a limited rollout in low-income areas appears more feasible. His rival Cuomo criticized universal free transit as a burden that would benefit the wealthy unnecessarily.

Groceries and Basic Goods: Soviet Redux or Social Justice?

Mamdani also promised subsidized grocery stores offering low-cost essentials a $140 million annual commitment requiring City Council approval. Critics labeled it Soviet-style policy. Mamdani counters that city-owned stores, supported by public land and wholesale pricing, would serve each borough without undermining private grocers.

The concept isn’t new: New York already supports food security programs amid rising prices and widespread food insecurity. Cities like Madison, St. Paul, Chicago, and Atlanta run similar initiatives. Atlanta’s Mayor Andre Dickens defended his city’s public grocery plan, citing private-sector failures to meet the needs of marginalized communities.

Wages and Early Childhood Care

Mamdani proposed raising the minimum wage to $30/hour by 2030 double the current $15 baseline set in 2018. Critics warn of job losses and a shift to informal labor markets, but proponents argue it’s vital amid soaring living costs.

Another key proposal is free early childhood care (from six weeks to five years old), costing up to $6 billion annually. It enjoys the backing of Governor Hochul, who pledged to prioritize the plan in the next state budget.

Four Years to Test the Dream

According to Lynn Weikart, author of Mayor Michael Bloomberg: Limits of Power and professor of public administration at James Madison University, successful mayoral leadership requires smart staffing, realistic goal-setting, and deliverable outcomes. Recklessly challenging the system, she warns, invites institutional resistance.

This is precisely what Mamdani has set out to defy.

His victory rattled mainstream media and power centers. Critics hoped to discredit him, fueled by Islamophobia, xenophobia, and disdain for socialism. Yet beneath the pessimism lies real fear not that Mamdani will fail, but that he might succeed.

Success would not only transform Mamdani’s legacy but also empower the communities he represents. If he can upend the rules and turn New York into a city for all its people—not just the super-rich—it would be historic.

Skeptics cite the city’s entrenched elite and decades of failed reform. But Mamdani’s supporters argue that his promises are practical and necessary. Economist Maliha Safri, author of Solidarity Cities: Confronting Racial Capitalism and the Path to Change, says New York’s history from its unionized era in the 1930s–60s to its neoliberal turn in the 1970s shows it can be reclaimed by the people.

To her, Mamdani’s labor-inspired, anti-racist vision marks a return to democratic urban governance. While some of his goals exceed traditional mayoral powers, careful appointments, strategic alliances, and political savvy may allow Mamdani to deliver real change.

Whether New York becomes a city for its people or remains a playground for the elite may well be decided in the next four years.

The first seeds of the capitalist classes in their current form in Egypt emerged with the onset of the openness policy the country witnessed in the 1970s, when President Anwar Sadat opened the door to foreign investments, transforming the Egyptian economy into one dominated by the private sector, and the size of private sector companies expanded during the 1970s and 1980s.

According to a report by economist Amr Adly at the Carnegie Middle East Center, the sector’s share expanded through engagement in capital‑intensive activities with higher value added, and private sector companies became involved in manufacturing sectors such as tourism, construction, importing technology, in addition to export activities such as exporting agricultural crops of fruits and vegetables, along with manufactured goods like ready‑made garments and carpets.

Mubarak Era: Transferring Public Wealth to the Private Sector

The biggest takeoff for the private sector and large capital came in the early 1990s, when the Egyptian government then signed an agreement with the International Monetary Fund aimed at gradually privatizing public sector companies, which was a key pillar in transferring wealth to the private sector.

In addition to easing and removing restrictions in many economic sectors that were dominated by public sector companies, this led to an unprecedented increase in the private sector’s share in Egypt’s GDP.
By 2004, with Nazif’s government taking office, a new phase began: businessmen and capital owners entered as partners in governance, taking on direct political responsibilities and assuming ministries that oversaw their business interests.

The new government provided unprecedented support to the private sector in the form of tax exemptions, investment incentives, allocation of land at low prices, and subsidized energy.

Egypt thus shifted toward an economy dominated by the private sector, with high accumulation of capital and production among families owning vast business groups operating in multiple sectors.

Here emerged what is known as “crony capitalism” (in the expression of Egyptian economist Mahmoud Abdel‑Fadil), which describes an economic pattern characterized by reciprocal benefits and services between the ruling political class and businessmen. Under this system, the political class could issue legislation and laws serving specific purposes in production, import and export, and executing state infrastructure projects.

In his book Crony Capitalism, Mahmoud Abdel‑Fadil, economics professor at Cairo University, argues that this situation enabled a faction of businessmen close to the narrow circle of political power, and who displayed loyalty to it, to benefit from these laws and regulations. As a result, these individuals amassed enormous financial wealth, laying the foundation for the uninterrupted rise of this class to the present.

A World Bank study issued in 2015 revealed the impact of what it called “Pyramid Capitalism” on productivity in Egypt, demonstrating the link between political connections enjoyed by businessmen close to the Mubarak regime and a network encompassing 469 companies controlling certain sectors and earning massive profits.

The study shows how these companies benefited from preferential regulatory transactions such as trade protection, energy subsidies, land acquisition, and avoidance of laws giving them better financial performance compared with companies whose owners had no relationship with the regime or the ruling party, ultimately creating a distorted economic environment dominated by politically connected firms.

Economic researcher Wael Gamal argues in his book The Egyptian Economy in the Twenty‑First Century that Mubarak’s project to pass power to his son Gamal was not fundamentally Gamal’s project, but rather the project of the rising businessman class, who were fighting the old guard within the ruling coalition (state bureaucracy and security apparatuses, especially the armed forces).

Their companies’ power abroad also expanded, becoming multinational firms with values in the billions of dollars. Amid monopolistic conditions and unlimited state privileges alongside institutional weakness in markets, they acquired unprecedented weight in the economy.

Years of Upheaval: Preparing Ground for a New Ruling Alliance

The January Revolution came against the ruling alliance, of which the upper class of capital owners was an inseparable part. Under public pressure in the squares, the regime was forced to imprison some of its businessmen for a period.

Wael Gamal notes that “businessmen began losing many of the privileges they had enjoyed for many years during the Mubarak era, and a series of judicial rulings were issued against them, but their influence and external alliances persisted.”

As popular pressure declined, this class regained its strength and influence starting in 2014. Legislation returned to serve its interests, such as the law protecting government contracts, the law of reconciliation with businessmen, and amendments to bidding laws allowing the government to award land titles and other contracts directly to aligned businessmen, in addition to tax reductions and other privileges that revolutionary years had stalled.

This group benefited from liberalization of the gas and water sectors, and from public companies’ offerings on the stock exchange benefiting brokerage firms and investment banks, as well as the transfer of more public assets into private hands.

Gamal’s study revealed that the financial sector (banks and brokerage firms) continued accumulating and achieved immense profits in recent years not from core banking activities related to lending to diverse economic sectors, but from risk‑free lending to the government at high interest on treasury bills.

In other words, Egyptian banks collect deposits and savings from Egyptians, lend them to the state, and profit from the interest rate difference bringing huge gains to bank executives and shareholder businessmen. This activity continues to this day, benefiting primarily bank shareholders and, of course, executives.

Orascom: A Case of Private Gain under Sisi

The most striking example of business benefit under President Sisi relates to “Orascom Construction,” owned by the Sawiris family Egypt’s and Africa’s wealthiest. In October 2012, the Tax Authority demanded the company pay $2.2 billion in tax on the sale of Orascom Building to French group Lafarge for $12 billion in 2007.

A dispute arose due to the company’s refusal to pay, leading the finance minister at the time to involve the public prosecutor to pursue criminal charges for tax evasion.

In March 2013, the then‑Attorney General, Talaat Abdullah, placed businessman Onsi Sawiris, founder of Orascom, and his son Nassef Sawiris, the company’s chairman, on travel ban lists, straining relations with then‑President Morsi’s government.

About a month later, in April 2013, the company reached a settlement with the Tax Authority to resolve the dispute by paying EGP 7.1 billion in installments, and the names of the Sawirises were removed from travel ban lists.

The company paid EGP 2.5 billion, then ceased payments after political circumstances changed on June 30. In September 2014, Nassef Sawiris was sentenced to three years in prison and fined EGP 50 million for refusing to pay checks owed to the Egyptian Tax Authority.

But days later in November 2014, the Tax Authority’s appeal committee acquitted him of tax evasion and suspended all judgments against the company.

After Morsi’s removal, the company submitted a request to annul the settlement agreement, arguing it was signed under political pressure. The ruling went in its favor and it recovered the EGP 2.5 billion previously paid. Company officials then donated that amount to the “Tahya Misr” Fund established by President Abdel Fattah el‑Sisi.

The Orascom case exposed the continued role of capital in playing a vital part in the transitional phase Egypt has witnessed since 2011, and in its principal participation in ousting former President Mohamed Morsi, supported by the Muslim Brotherhood, in 2013.

This took place through pressures of stop‑go investment strategies to compel the regime to ensure no action was taken against companies and investments they owned, as well as using their media outlets to oppose the Brotherhood, stir public demonstrations, and strip political discourse of social dimensions, reducing it to battles defending Egypt’s secular national identity.

In this context, businessmen were alarmed by the rising political power of labor under the revolutionary mood, frustrated by the Brotherhood’s inability to rein in labor militancy, and fearful of competition from Brotherhood‑linked commercial interests nearing control over legislative and administrative state apparatuses that grant contracts, distribute deals, create jobs, and write laws to their benefit.

Thus, the business class mobilized all its financial resources and media tools to eradicate any form of democracy by allying with the military institution, whose leadership had the greatest interest in regaining power, and strongly backed the new ruling alliance led by Field Marshal Abdel Fattah el‑Sisi, soon to become president.

Those Aligned with Sisi and Their Victims

Economist Amr Adly, in his study of transformations witnessed by major private companies after the January Revolution, argues that although the revolution and subsequent developments did not reduce the actual economic weight of large private sector firms, their political clout diminished significantly compared to the Mubarak era. Most economic decision‑making shifted primarily to the military and other parts of the state bureaucracy.

From this standpoint, the new regime worked to dismantle the old networks of corruption and cronyism that had benefited big companies under Mubarak, restructuring them by excluding previous beneficiaries and making deep structural changes to the economic power aligned with the ruling apparatus to ensure the continuation of close ties between the state and capital but in a different form by reshaping networks of patronage.

This resulted in replacing old “cronies” with new ones, who managed to exploit their connections to support the regime and obtain unlimited privileges and access to rent resources, which flowed in various ways into the Egyptian economy.

Government Spending—and Business Profits

In recent years, the Egyptian government has expanded constructing major national projects, focusing on sectors such as energy, water, and transport. At the same time, these projects were financed through loans from major international institutions and foreign banks, which prefer working with private sector partners rather than the military or other bureaucratic institutions.

Hence, these projects were awarded to multinational Egyptian companies with presence in many countries and trusted by international financing institutions, foremost among them Orascom Construction (owned by the Sawiris family) and El Sewedy Electric (majority owned by the El Sewedy family).

Orascom can be seen as an example of the tremendous gains the private sector achieved from unprecedented government spending. A Mata­sdash investigative report shows how Orascom turned from posting losses of about EGP 9.1 billion in 2012 and EGP 1.4 billion in 2013 into massive profits due to government spending on infrastructure projects.

Company financial disclosures show unprecedented revenue and profit growth resulting from a substantial increase in annual project contract awards since President Abdel Fattah el‑Sisi assumed office in 2014.

Between 2014 and 2023, Orascom’s total revenues reached approximately $35.6 billion with net profits of about $866 million. Although the company expanded geographically into the United States and the Gulf, infrastructure projects implemented by the Egyptian government represented the bulk of its work’s volume and value.

During the same period (2014–2023), Egypt’s average share of projects executed by the company was approximately 68%, according to analysis of budgets and annual results by Mata­sdash.

On many occasions, the Sawiris family criticized state intervention in the economy and the shrinking role of the private sector. But in reality, the government’s increasing economic role in recent years effectively expanded Orascom’s business, as the figures show achieving significant foreign currency revenues and profits while low‑income citizens shoulder the burden of these debts through indirect taxes.

Control of Land and Resources

Unlike the Sawiris family, the Talaat Moustafa family never criticized state intervention in the economy not because family head Hisham Talaat Moustafa was spared life imprisonment after being accused of killing Emirati singer Suzanne Tamim in exchange for state deals that resulted in the acquisition of vast land in the new administrative capital and participation in several real estate developments but because its relationship with the state was the locomotive of the family’s wealth.

This occurred both during the Mubarak era, when land for the “Madinty” project (covering 33.6 million square meters) was allocated to Talaat Moustafa in 2005 in violation of the law by an Egyptian court; and under Sisi, when the “Celia” project lands were allocated in 2018, and in 2021 the “Noor” project lands were allocated under a veil of secrecy through the previously mentioned bidding law.

In January of this year, Talaat Moustafa entered a partnership with the Armed Forces Engineering Authority for an investment project called “South Mid” after the military expropriated 23 million square meters of land in the Jumeima area from residents, compensating them EGP 2,500 per square meter of residential land. Meanwhile, Talaat Moustafa Group offered units six months later at EGP 180,000 per square meter.

In late February, Hisham Talaat Moustafa appeared alongside Prime Minister Mostafa Madbouly and Mohammed Al‑Suwaidi, Director of the Abu Dhabi Fund, signing an agreement to develop the Ras Al‑Hikma area as the local Emirati partner, though the exact role of Talaat Moustafa whether owner of the land or partner in development remains unclear.

In both cases, land grants were the royal road to rapid wealth for businessmen in general and Talaat Moustafa specifically; acquiring it at low cost and selling planned housing units in the market to raise construction capital yielded profits and created vast wealth. Hisham Talaat Moustafa thus became, with government backing, one of the largest landowners in Egypt.

But land allocation was not the only path to ascendancy. Obtaining government contracts was an even shorter route to wealth accumulation, as seen in the striking case of Sinai businessman Ibrahim Al‑Arjany.

Al‑Arjany, released from prison in 2010 after serving nearly two years following an armed conflict with police and detaining dozens of security personnel, now has a name synonymous with close ties to sovereign entities and the highest levels of power.

He began his activities after founding “Sons of Sinai” in El Arish, North Sinai in 2010, but his name did not enter the spotlight until the company supplied materials for rebuilding the Gaza Strip after the 2014 Israeli offensive. Al‑Arjany’s business then expanded thanks to government contracts that made him the sole controller of all contracting work in Sinai.

Through these government contracts, Al‑Arjany transformed in a decade from a smuggler released from prison into the owner of a sprawling economic empire from transporting Palestinians between Gaza and Egypt (with bribes), to acquiring rights to develop the zoo in partnership with foreign and Arab entities, to obtaining the BMW agency jointly with Al‑Safy Group (Sisi’s son‑in‑law) and the Al‑Ghanim family. He became known as “Abu Essam,” one of the country’s most prominent and powerful businessmen.

The Disfavored

While remaking the ruling alliance, President Sisi, early in his rule weeks after taking power in 2014, asked a number of businessmen to make donations to “Egypt,” invested later in infrastructure projects.

According to Mada Masr, attendees thought the donations would be one‑off or occasional, but they did not imagine that these requests would intensify over time and escalate with the economic crisis in 2022.

In the last quarter of 2022, Sisi convened another meeting of businessmen, asking them to partner with the state in advancing projects either through direct financial contributions, managing projects in the state’s interest, or purchasing these projects.

Over the decade, businessmen were offered a choice between donating to “Egypt” or rather to the Tahya Misr Fund overseen personally by Sisi or imprisonment. For example, Salah Diab, whose businesses span oil and agriculture and who owns Al‑Masry Al‑Youm newspaper, was twice detained for failing to donate to Tahya Misr:

first in 2015 on charges of possessing an unlicensed weapon (released after four days due to swift Emirati intervention), and again in September 2020 a detention that ended after 40 days once he complied with demands, including donating a fixed amount to Tahya Misr, relinquishing some land assets, and crucially surrendering his shares in Al‑Masry Al‑Youm, turning the opposition newspaper into regime‑aligned media.

A more severe case occurred with businessman Ragab El‑Suweirki, owner of the famous “Al‑Tawhid wal‑Nur” stores, charged with “financing a terrorist group.” In April 2021, he was convicted on unrelated charges of failing to adopt industrial safety precautions at some store branches, sentenced to three months’ imprisonment and fined EGP 30,000.

Yet El‑Suweirki remained in prison for a year and two months, released only after surrendering assets seized from his and aides’ homes, including multiple stores and land, according to Mada Masr.

Mada Masr reports that the list of businessmen targeted in recent years also included Ahmed El‑Azby, owner of the “El‑Azby” pharmacy chain, who was arrested in September 2022 and agreed after release to relinquish part of his business and quickly facilitate a donation to a government entity.

Such detentions affected many businessmen who failed to take seriously the signals to donate to the Tahya Misr Fund. Those not detained sold shares in their companies to foreign firms while ensuring stakes in companies abroad such as the heirs of the late Mohamed Farid Khamis in “Oriental Weavers” a pattern repeated with Domty in the food industry.

In sum, all businessmen—whether favored or disfavored—understand the necessity of forging strong relations with the state, which distributes contracts and awards deals. In a country like Egypt, wealth is never generated in isolation from the state.

However, those relationships vary between cronies with patronage whether due to security roles in isolated regions like Sinai or because they activate the economy and pump money into major real estate projects undertaken by the regime and those viewed by the state principally as sources of donations in exchange for being allowed to operate without obstruction or detention.

In light of the current economic crisis, the state can no longer ignore what it expects from businessmen. But the state now recognizes the importance of businessmen in providing employment and achieving any meaningful economic growth. Therefore, it has moved away from a policy of detaining businessmen that drew criticism from international financial institutions for violating economic freedom principles and attacking private property.

After the recent agreement with the International Monetary Fund in March, the authority is compelled at the fund’s directive to open broader spaces for the private sector in most activities.

In this context, every gain will gradually translate into political influence, especially as the narrowing circle of “patronage” compels businessmen to unite and defend their collective interests, which is expected to happen if international financing institutions provide protection from security‑driven dealings a possibility now more attainable than before.

Lately, almost everyone seems to be nostalgically looking back at the Egyptian pound as it was only about two and a half years ago talking about its purchasing power compared with today as if those years were decades ago. The massive decline in the currency’s value and the rapid pace at which this occurred during the current economic crisis were so shocking that it remains difficult to fully absorb or adapt to it.

In general, every people have an imagination of a “better yesterday” for the condition and performance of their currency — even Americans themselves with the “dollar” that governs the world. Yet the difference between then and now for currencies can, in some countries, truly be the difference between a glorious past and a bleak present.

From its very first minting, the Egyptian pound was a strong currency, even if the conditions of daily life in Egypt under the Khedive were far from prosperous. This doesn’t stop Egyptians today from yearning for that era when the pound could do many things as if it were Moses’ staff.

So much so that older generations gave it a nickname symbolizing strength: “the gypsum pound.” But decades of wars followed by economic collapse transformed that pound into nothing more than the “gum” a shopkeeper hands you when all you have left are a few pounds.

Yesterday’s Pound

To understand today’s “pound,” we must go back in time. Muhammad Ali Pasha, governor of Egypt (1805–1845), dreamed of independence from the Ottoman Empire and building his own state. In pursuit of this, he waged wars against the Sublime Porte. Within the independent state he founded came the establishment of its own currency, and here begins the story of the “golden pound” following the war between Muhammad Ali and the Ottomans.

In 1836, Muhammad Ali minted a gold pound worth 8.5 grams of gold. It replaced the Ottoman qirsh as Egypt’s official currency at a rate of 1/100 of the pound. Yet the Ottoman qirsh continued to play its role within daily economic life because a state may be rich and its currency strong, but that doesn’t necessarily mean its people are. Thus, the qirsh remained significant in everyday transactions.

The gold pound remained dominant until 1898 when it became a paper banknote. The National Bank of Egypt issued the new currency now equal to 7.48 grams of gold and because of its high value it was divided into smaller denominations like the qirsh and the millieme, which persisted in people’s memory to this day.

After Britain declared a protectorate over Egypt following World War I, it tied the Egyptian currency to the British pound. The National Bank exported Egypt’s gold reserves to Britain as part of the colonies’ contribution to war expenses, as noted in Wars of Empires. The pound sterling ended up equating to 97 qirsh.

Egypt had fallen under British occupation in 1882 due to a debt crisis. During the world wars, as economist Galal Amin explains in The Story of the Egyptian Economy, Egypt performed well in debt repayment which strengthened the currency.

After World War I, Egypt achieved a trade surplus due to higher cotton prices, but this surplus mainly went toward servicing debt.

Between 1914 and 1934, national debt dropped from 86 million to 39 million pounds representing 20% of national income, compared with 100% when British occupation began.

After World War II, Egypt became a creditor state thanks to the Egyptianization of debt law. Britain owed Egypt 340 million pounds, which Cairo never fully reclaimed after Britain ceased payments due to the 1956 Suez Crisis known historically as sterling balances.

By the end of King Farouk’s reign, Egypt’s debts were nil, and the Egyptian pound never fell below the equivalent of four U.S. dollars. But even with a strong currency and a wealthy state, social mobility did not progress at the same pace.

Although the middle class had grown after the 1919 Revolution, it remained small, while large landowners dominated parliamentary life a major achievement of that revolution, as Asim al‑Dusouqi notes in Major Landowners and Their Role in Egyptian Society 1914–1952.

The pound was strong, but not accessible to large segments of society who lived on qirsh and milliemes. Films from the era reflect how Egyptians related to their strong currency one spoke of the pound with reverence precisely because it was out of reach.

In Give Me 3 Pounds (1939), those three pounds could save a man from eviction. In 1950’s Yasmin, child star Fairuz sings about the riyal worth 20 qirsh: “We have a riyal, oh we have a riyal it’s a high amount, not bad let’s go straight to the grocer and buy supplies.”

Nasser’s Dreams & Nightmares

Egypt remained tied to the pound sterling until 1961, when the newly established Central Bank (founded in 1960) began issuing Egyptian currency. In 1962, Egypt changed the currency’s valuation and pegged it to the U.S. dollar.

Even though the tie to the British pound formally ended in 1961, since 1944 near the end of World War II currencies were being linked to the dollar under the Bretton Woods agreement. In some speeches, President Gamal Abdel Nasser referred to figures in U.S. dollars before 1961.

From the 1952 Revolution, the Egyptian pound’s story became inextricably tied to the U.S. dollar. Abdel Nasser inherited a debt‑free state. Between 1952 and 1967, the dollar’s value rose against the Egyptian pound from 0.25 to 0.38. To finance industrial projects, the High Dam, and government spending, Egypt borrowed and by the end of Nasser’s era, civilian debt reached about $1.8 billion, or around 21% of GDP.

During Nasser’s peak economic years (1956–1965), as Galal Amin notes, Egypt sometimes repaid debt with Egyptian pounds and sometimes with Egyptian‑made goods. Workers’ wages in industry and agriculture rose steadily. Like many post‑colonial states, Egypt pursued nationalization and import substitution. This energized the national industry.

Egypt made radios, televisions, cars and expanded social support systems like health, education, and unemployment programs. The standard of living improved, and the pound held its strength yet the brink was coming due to Nasser’s costly ventures.

The war in Yemen, beginning in 1962, was one such drain. In a declassified 1963 U.S. intelligence document, estimates show Egypt spent between $85 and $110 million supporting its military and allies there a sum the document warned could not continue without affecting development.

The decisive blow was the 1967 defeat. Building up the army afterward cost the state dearly financially and in debt and Anwar Sadat inherited an almost empty treasury with a weakening pound.

Sadat’s “Open Door” & Its Consequences

Despite early improvements, Sadat’s economic policies eroded confidence in the pound. He opened Egypt to free import markets, despite limited foreign currency reserves and weak export growth. Egypt borrowed heavily short‑term at interest rates sometimes reaching 15%. These policies weakened the pound further.

As the Suez Canal reopened and Egyptians worked abroad, foreign currency re‑entered the economy. The black market for foreign exchange flourished, and foreign currency became more important socially and economically with some companies boasting dollar‐denominated salaries and some real estate pricing tied to dollars.

The “gypsum pound” revealed itself as imaginary unable to do much. The government raised the minimum wage to 16 pounds per month, yet this did little to halt depreciation.

The 1977 “Bread Riots,” sparked by the social impact of Sadat’s policies, featured chants that exposed how the currency’s decline made basic goods unaffordable: “One kilo of meat now costs a pound.” Protesters even addressed First Lady Jehan Sadat: “Tell your husband a pair of shoes now costs six pounds.”

By the end of Sadat’s rule, Egypt’s civil and military debt neared $30 billion. His economic system created a society of haves and have‑nots, with a shrinking middle class. A chronic trade deficit, dependency on short‑term high‑interest debt, and rising foreign‑exchange demand hastened the pound’s decline.

Sadat was assassinated in 1981, but his economic legacy lived on. Hosni Mubarak managed these inherited crises similarly, albeit slowing the rate of decline. Early in his rule, Mubarak spent millions on ambitious projects like Sadat City, Toshka, and the Peace Canal, while privatizing and encouraging foreign investment to address economic woes.

Egypt increasingly became a rentier state, relying on tourism, remittances, the Suez Canal, and limited oil revenues.

When oil prices collapsed in the 1980s, Egypt’s economy was hit hard. Many expatriate workers returned home, foreign currency inflows declined, and by 1988 the pound had fallen to about $1.50 and by 1990 it was roughly equal to the dollar, marking the start of a long upward trend for the dollar against the pound.

On the eve of the 1990 Gulf War, Egypt’s debt reached $47 billion 150% of GDP yet the war’s economic fallout paradoxically helped stabilize some aspects of the economy.

The Era of Deepening Collapse

Global inflation and price shocks between 2000 and 2011 further pressured the Egyptian pound. External price rises affected the pound’s value more than they did elsewhere, and when world prices fell, Egypt often saw lagging declines.

The structural causes of chronic weakness persisted: overreliance on imported goods, stagnant markets, low productivity, weak competition, and ineffective consumer protection.

During the Mubarak era’s latter years, the pound was repeatedly devalued in what became known colloquially as “floating.” By the 2011 revolution, the dollar was worth six times as much as the pound.

In a notable economic observation, researcher Samer Suleiman wrote in The Strong Regime and the Weak State (2006): “One undeniable truth is that Sadat inherited an inflated state from Nasser, and Mubarak inherited an even more inflated one from Sadat.”

The Biggest Collapse

After the 2011 uprising, Egypt continued to grapple with structural imbalances. Foreign currency supplies struggled to meet rising import bills triggering a domino effect across the economy.

Major sources of foreign exchange exports, remittances, tourism, foreign direct investment, and Suez Canal revenues all weakened amid post‑revolution instability. Tourism, a major contributor to GDP and foreign exchange before 2011, suffered first. The 2015 crash of a Russian Metrojet flight from Sharm El‑Sheikh led to European flight bans, further damaging tourism.

Parallel currency markets expanded as people sought better rates than official channels, and capital controls limited multinational companies from repatriating profits suppressing foreign investments.

A shortage of foreign currency made it difficult for manufacturers to import raw materials and machinery. With declining oil prices and reduced support from Gulf states who had grown weary of Egypt’s dependency on aid pressure on foreign exchange intensified. As a result, Egypt’s current account deficit surged by July 2016.

By October 2016, the dollar was trading in black markets at rates equal to official ones roughly 16 pounds to the dollar versus an official rate of 8.8. Under mounting pressure, Egyptian authorities had no option but to seek assistance from the International Monetary Fund.

In November 2016, the Central Bank floated the pound for the third time in Egypt’s history after floats in 2003 and 1977.

The pound lost about 32.3% of its value, with the dollar reaching roughly 16.5 pounds. Shortly after, the IMF agreed to a $12 billion program the largest in the Middle East at the time.

Studies noted shocking impacts: by 2017, the Egyptian pound could buy only about 2% of what it did in 1979 and about 4% of the dollar value it could purchase in 1983.

Subsequent administrations continued major projects that demanded heavy spending, further straining the economy and the pound. Additional floats in 2022 and 2024 drove the dollar’s rate to around 48 pounds.

Is the Egyptian pound that our parents knew and we knew for even a short time gone? A study of low‑income households by the International Food Policy Research Institute found that 85% of poor families cut meat consumption, 75% cut eggs, 73% cut poultry, 61% cut fish, and 60% cut dairy by 2022 before the latest float and the highest inflation rates seen in early 2025.

While the government recently set a minimum wage of 6,000 pounds itself questionable in its capacity to sustain a family of four, and only available to a minority of workers a study by the Egyptian Initiative for Personal Rights found many families below the poverty line living on just 500 to 800 pounds per month.

It’s almost unimaginable to survive on such a sum a testament to how deeply currency erosion has affected daily life.

The Egyptian pound’s struggles continue amid chronic state deficits, heavy domestic borrowing with interest rates up to 30%, a foreign exchange funding gap, and an inability to attract sufficient dollar revenues to meet essential needs or service external debts all signaling further depreciation and persistent deterioration ahead.

Billions of dollars in foreign investment in Egypt’s sovereign debt instruments fled the country following the outbreak of the Russia-Ukraine war in early 2022. This exodus drained the Central Bank’s foreign currency reserves, plunging the Egyptian government into an unprecedented crisis.

The government scrambled to implement a sweeping series of emergency measures most notably a sharp devaluation of the Egyptian pound and a fresh agreement with the International Monetary Fund.

These decisions ignited one of the most severe economic crises Egypt has experienced in decades an ordeal still unfolding more than two years later, with citizens continuing to endure its painful consequences.

From the very onset, Egypt’s ruling authorities clung to a consistent narrative: the crisis was global, not domestic. This messaging blaming COVID-19 and the Russia-Ukraine war was echoed by President Abdel Fattah el-Sisi, senior officials, and amplified by both state and pro-government media. It served as a ready-made justification for an increasingly disillusioned public.

In a speech last year, President Sisi asserted, “Had it not been for the state’s prior preparations to contain the negative fallout of the global economic crisis, the effects would have been doubly severe.” He also insisted the government had successfully managed the crisis.

Before debating the true roots of Egypt’s economic collapse whether domestic missteps or external shocks it is essential to examine the outcomes. These alone underscore how deeply the Egyptian economy is tethered to external forces, highlighting its inability to weather global shocks.

How the Russian War Sparked the Meltdown

Like many developing economies, Egypt’s financial system is embedded within the global dollar-based order. Events have repeatedly shown that this framework is ill-equipped to shield developing countries from crises originating in wealthier states, particularly the United States.

The US Federal Reserve’s repeated interest rate hikes triggered a global scramble to protect local currencies against the soaring dollar. Unsurprisingly, weaker currencies buckled among them, the Egyptian pound, which became one of the world’s worst-performing currencies after the Russian invasion.

Even before that, Egypt had already begun to align itself closely with the IMF. In 2016, Cairo signed a $12 billion loan deal that saw the pound devalued from 8.8 to nearly 20 per dollar. Alongside painful austerity measures including sweeping subsidy cuts living standards plummeted.

These steps impoverished millions, particularly from the middle class. Still, the government remained optimistic, defending its policies as necessary sacrifices for future economic gains.

Egypt did record impressive growth figures in the years that followed, buoyed by foreign currency inflows mostly from external borrowing and a surge in “hot money” attracted by high interest rates. The government interpreted the ease of acquiring foreign loans as a sign of success and even cited IMF praise for its commitment to reform. Stability, it seemed, was within reach.

Then came the Russian war. According to Egypt’s Prime Minister, roughly $25 billion in foreign investment in government debt fled in under a month funds the country relied on to cover imports and external debt.

Simultaneously, the cost of imports soared especially energy and wheat—just as Egypt, the world’s largest wheat importer, faced oil prices nearing $100 a barrel. Inflation skyrocketed to 40%, the pound nosedived, and purchasing power eroded. Incomes collapsed in real terms, and the cost of living soared.

While the Russian invasion triggered the crisis, it merely exposed the underlying fragilities of Egypt’s economic model.

Unsustainable Policies and Growing Dependency

Egypt’s crisis has deep roots, stretching back decades. Structural weaknesses have worsened under the current administration, with economic indicators deteriorating year after year.

One major issue is the persistent budget deficit the shortfall between government spending and revenues—forcing Egypt to finance itself through borrowing. In the 2024–2025 fiscal year, debt servicing alone consumes 62.1% of the national budget.

The foreign currency shortage is equally alarming, driven by the massive gap between imports and meager exports. In the first nine months of fiscal year 2023–2024, Egypt’s current account deficit ballooned by 225% year-on-year to $17.1 billion.

This has led to a widening financing gap. According to the latest IMF reports, Egypt needs $28.5 billion in foreign currency despite already accounting for inflows from the Ras El Hekma deal and IMF loans.

Over the past decade, Egypt has pursued an unsustainable economic model centered on capital-intensive infrastructure projects with little or no return. President Sisi once stated that the state had spent 10 trillion Egyptian pounds on such “national projects”—equivalent to $300 billion today or $600 billion based on previous exchange rates.

This path has made the government increasingly reliant on external borrowing—from financial institutions, foreign banks, and high-interest foreign capital. It also issued bonds in various currencies to plug fiscal holes.

Despite all this, excessive borrowing has not translated into sustainable growth or boosted production. It has failed to address the chronic balance of payments deficit or diversify exports. Egypt remains dependent on debt to fund everything from wheat to fuel.

In 2014, Egypt imported $60 billion in goods. By 2021, that number had grown to $89.2 billion. Exports, meanwhile, rose from $24.1 billion in 2014 to just $43.6 billion in 2021. These figures show that Egypt has grown more dependent on external markets and less capable of generating the revenues it needs to sustain itself.

In 2025 alone, Egypt must repay $36.3 billion in debt. According to the Central Bank, medium- and long-term external debt servicing obligations total $191.5 billion through 2071, including $58.5 billion in interest.

The government has also marginalized the private sector in recent years, competing with it directly and constraining its access to credit. Banks now primarily finance government deficits at high interest rates, crowding out private investment.

As economist Amr Adly notes in his essay “How the State Devoured Private Sector Opportunities,” this trend has stunted private-sector growth. International institutions have repeatedly called for structural reforms chief among them, boosting private-sector participation in the economy.

State dominance and a fixation on mega infrastructure projects have failed to address deep-seated challenges: stagnant productivity, sluggish investment, and lackluster export diversification. Neoliberal market-driven policies haven’t delivered the promised growth.

Are External Factors Solely to Blame?

While the government continues to point fingers at global events, it’s critical to assess its own crisis-management response. The food sector provides a revealing case study.

In February 2022, following the hot money exodus, Egypt imposed sweeping import restrictions. It required importers to secure letters of credit and pay in full upfront a move that quickly choked supply chains.

Banks struggled to provide hard currency, leading to months-long backlogs at ports. Industries couldn’t access raw materials, and production costs surged. Food shortages spread rapidly, driving prices skyward.

According to the investigative platform Matsadaqsh, the animal protein sector 90% dependent on imported feed was devastated. Feed prices soared by 300% in 2022, crippling poultry, livestock, and fish producers. Nearly 40% of poultry farmers exited the market that year. Egg production fell from 14 billion to 9 billion annually. Chicken numbers dropped from 1.4 billion to 1 billion in 2023.

Mada Masr reported a 60% decline in Egypt’s cattle production capacity in 2022. Dairy prices rose 70% the following year. Fish farming, which supplies 75% of national demand, also suffered as feed costs surged by up to 90%.

By 2023, Egypt’s Central Agency for Public Mobilization and Statistics recorded staggering food price hikes: meat and poultry up 93%, fish up 83%. That July through September, the World Bank ranked Egypt first globally in food inflation.

These figures barely scratch the surface. A 2022 government study found 74% of Egyptian households reduced food consumption due to rising prices. Ninety percent cut back on meat, poultry, and fish. Over two-thirds reduced egg and vegetable intake.

This was in the first year of the crisis. With inflation still soaring, the nutritional situation has likely deteriorated further. Families are now resorting to cheaper, lower-quality foods raising the specter of widespread food insecurity and malnutrition.

Egypt’s failure to manage the food crisis is not an isolated case it is emblematic of deeper policy failures and a broader inability to respond effectively to global shocks.

Conclusion

No economy is immune to disruption. The 20th and 21st centuries have seen pandemics, wars, financial crashes, and technological upheaval. Egypt has experienced its share of turmoil alongside these global shifts.

Yet, one truth is indisputable: no economy enjoys perpetual stability. On the contrary, volatility is the rule, not the exception. Therefore, blaming external events can’t serve as an enduring excuse for poor governance.

Resilient economies are those that adapt, withstand shocks, and recalibrate. As geopolitical tensions rise, especially in Egypt’s immediate neighborhood, the country can ill afford an economic model that cracks under pressure. Without meaningful reform, the next global crisis could prove even more catastrophic.

The past seventy years since the July 1952 Revolution represent a highly distinctive phase in modern Egyptian history, characterized by leadership drawn from former military officers in a republican system. This invites constant comparison, since each regime often bequeathed the next a legacy of crises and dysfunctions that came to define its operations, with only rare periods of achievements and limited stability.

If we are to compare each era with the next, we must look at the condition of the Egyptian citizen and the attempts at social and economic advancement. The most illuminating angle to do this is through basic constitutional and human needs namely education, healthcare, and employment.

Education: From Literacy Campaigns to Masked Illiteracy

The importance of education was diminished when Egypt came under British occupation in 1882, after it had been one of the hallmarks of modernization under Muhammad Ali Pasha (1805–1848). The British prioritized educating civil service employees in English‑language schools while neglecting mass education.

The colonial administration cut education spending and imposed fees on primary schools, while higher education remained costly and largely the preserve of affluent elites.

Article 19 of the 1923 Constitution stipulated free education in Egypt, but truly free and universal education was not realized until around 1944. Secondary and technical education were made free by a 1951 decree from the then Minister of Education, Taha Hussein.

This set the stage for the post‑1952 expansion of the state education system under the socialist policies of President Gamal Abdel Nasser, who inherited a nation with a 75% illiteracy rate.

Nasser’s goal in providing free education and employing university graduates in the public sector was to broaden the regime’s popular base and prevent social unrest among educated youth.

These policies dramatically expanded educational institutions in Egypt. From just five universities in 1952, there were 12 by the end of 1976, and the number of higher education students more than doubled from 333,300 to 480,000 between 1971 and 1976. However, due to Egypt’s high population growth, guaranteed government employment became increasingly unsustainable.

The rapid expansion of higher education eventually resulted in declining quality under President Hosni Mubarak.

After the 1967 war, education spending in the state budget fell even as population densities rose. This marked the beginning of the system’s deterioration, which accelerated under Anwar Sadat’s infitah (openness) policies as education funding shrank in favor of more consumption‑oriented budget items.

The state began to adopt a cost‑recovery approach, viewing education increasingly as a market commodity.

Economic reform measures launched by Mubarak in 1991 under IMF‑backed structural adjustment paved the way for neoliberal policies that continue to this day, reducing funding for essential sectors like education and health.

Teachers’ wages stagnated and the figure of the teacher became a symbol of derision depicted in popular television series and films as greedy and reliant on private tutoring to supplement income.

A private education sector emerged to alleviate pressure on the public system. Between 1996 and 2006, the number of private universities in Egypt rose from one to 16. By 2023, this had grown to 27 private universities alongside 28 public ones.

Declining public education quality made private education an alternative, particularly for wealthier families, along with foreign international schools accessible only to the wealthy. These statistics reflect conditions close to and after the 2011 January 25 Revolution.

Historian Joel Benin notes that the defining feature of the Nasser era was that socialism improved the lives of workers in public institutions and the state bureaucracy, providing them with stable jobs and social benefits like healthcare and pensions, along with free education from kindergarten to university and greater opportunities for the children of peasants to access higher education.

A 2016 United Nations Population Situation Report prepared with Egyptian institutions highlighted the erosion of the pro‑poor education philosophy that had legitimated the July regime from the start, revealing that 57% of poor Egyptians either never attended school or did not complete primary education, compared to 45% of non‑poor citizens.

Private schools became a refuge from overcrowded, low‑quality public classrooms, but recent economic pressures have affected families’ ability to afford private education. In 2012–2013, households spent 56% on public education and 38% on private schooling.

By 2017–2018, public schooling rose to 68% while private declined to 28%, indicating that many families could no longer bear private school costs and returned their children to public schools.

Salma Hussein’s report “Ten Facts About Education Spending in Egypt” explains the state’s crisis in education funding and Egypt’s declining global indicators. Though successive Egyptian governments directed about 5% of GDP to school education through 2021, Egypt suffers from significant underfunding. According to the World Bank, Egypt’s education budget is no more than one‑third of the developing country average.

Current budget data shows the constitutional education spending target is unmet. With Egypt’s GDP at 12 trillion Egyptian pounds, education (pre‑university and higher) received only about 230 billion pounds in the 2023–2024 budget, representing just 1.72% of GDP — more than 4% below the constitutional requirement of 6% (equivalent to 710 billion pounds).

By 2023, Egypt had about 61,000 schools serving 25.5 million students with 955,000 teachers, but this is still inadequate, and quality remains poor: 70% of 10‑year‑olds cannot read and comprehend age‑appropriate text, according to a World Bank learning poverty report.

Education’s limited budget also suffers from misallocation: per‑student spending averages about 5,400 Egyptian pounds annually far below the $11,200 per student in high‑income countries.

Hussein’s report also highlights regional inequities poor governorates like Assiut, Minya, Sohag, Qena, and Fayoum receive lower per‑student spending than sparsely populated areas like New Valley (15,000 pounds per student vs. 4,000 in Minya).

Education is one of the basic aspects of life hit hardest by the economic crisis. A 2023 report showed a 7.7% rise in education costs; poorer families reduced their educational spending, and female enrollment rates among poor households were far lower than males, reflecting how poverty now disproportionately impedes girls’ education. In 2021, the literacy rate in Egypt was 87.18% a decline of 0.5% from the previous year.

Parents now shoulder the education burden previously borne by the state, especially through private tutoring. According to the “Social Justice” platform, private tutoring consumes up to 30% of total household education spending including tuition, transport, uniforms, books, and supplies.

Healthcare: The Arrow That Reached the Sky Then Broke

In 1946, Dr. Arthur Cecil published his influential book One Just Hour on Egypt’s health conditions from 1937–1943. The general picture was one of citizens deprived of minimum healthcare standards. Cecil noted that children often died shortly after weaning from protein deficiency; a mother with seven children might have just two surviving.

Egypt had the world’s second‑highest infant mortality rate at the time and was plagued by cholera, anemia, schistosomiasis, plague, and tuberculosis.

In the Area Handbook for Egypt prepared by the U.S. Decision Support Center for military and civilian personnel, the author notes that healthcare was central to legitimizing Nasser’s regime. From 1952, the government strove to improve public health; the 1962 National Charter declared healthcare a fundamental right for every citizen.

Between 1952 and 1976, public per‑capita healthcare spending rose by 500%, including the launch of a national health insurance program in 1959 and the expansion of hospitals and rural health units reaching 600 units by 1960.

Thanks to these efforts, average life expectancy improved: from 39 years in 1952 to 59 for women and 60 for men by 1989. The overall mortality rate fell from 24% in 1952 to 10% in 1990, and infant mortality dropped from 193 per 1,000 births to 85 per 1,000 due to widespread immunizations and care programs.

A major 1960s campaign on stagnant water dangers halved schistosomiasis infection rates by 1966. These gains contributed to a population boom from 20 million in 1952 to 67 million in 1991, and about 106 million today.

Sadat’s infitah policies had limited direct impact on healthcare at first, though spending declined and multinational pharmaceutical companies entered the Egyptian market. The real shift came after Mubarak’s 1991 structural adjustment program, which reduced health spending as a share of GDP and opened the door to private sector expansion.

Several privatization efforts were attempted but stopped by court rulings — including Ahmed Nazif’s 2007 decree converting the Health Insurance Organization into a corporation and the 2010 Public‑Private Partnership Law.

After the January 25 Revolution, the Supreme Council of the Armed Forces approved a state budget that maintained health spending at 4.5% of total expenditure in 2012–2013 (aligned with President Morsi’s year in office). Morsi pledged a 1.5% annual increase to reach 10% by the end of his first term a goal never realized.

Egypt’s 2014 Constitution set goals to increase education and health spending to about 10% of GDP within three years: 6% for education and 3% for health. A decade later, health remains one of the biggest casualties of economic reforms.

In recent years, Egypt has had one of the world’s highest hepatitis C infection rates at 7%. One of President Abdel Fattah El‑Sisi’s flagship initiatives was the “100 Million Health” campaign, funded with $250 million from the World Bank, screening 60 million Egyptians in 2018. Yet systemic healthcare management challenges persist, reflected in low health expenditure as a share of GDP.

Since 2015, health spending has declined sharply through 2020; the COVID‑19 pandemic raised it slightly to 1.50% in 2022, but even peak spending around 1.81% in 2015 never met the constitutional minimum.

The health sector continues to slide toward collapse, threatening citizens’ right to free treatment. Recent Ministry of Health regulations raised service fees and reduced free care to increase revenues amid currency depreciation.

In the 2023–2024 fiscal year, health spending remains about 1.25% of GDP. The government uses accounting tactics to inflate official numbers, such as including water supply and sanitation under health spending and allocating portions of public debt interest to education and health expenditures, according to the “Don’t Believe” platform.

Poor populations bear the greatest burden of cutbacks. Wealthier Egyptians avoid public hospitals, seeking treatment in private facilities and clinics.

Healthcare inflation rose to 17% in 2023, and health costs rank third in low‑income household spending at 8.3% of annual expenditures. Overall, Egyptians’ out‑of‑pocket health spending (59.31%) now exceeds government spending.

Private hospitals now comprise 63% of Egypt’s healthcare sector between 2012 and 2021, while public hospitals have barely expanded despite a 19% population growth; public hospital beds decreased by 14% even as private beds rose 35%.

Despite these indicators signaling the need to strengthen public health, the government is moving to shrink its role and liberalize the sector actions that may contravene constitutional mandates.

In May 2025, the House of Representatives approved the government’s “Hospital Leasing” law to transfer management of state health facilities to private investors, and President Sisi ratified it despite objections from the Medical Syndicate and experts. The law offers no guarantees for continued semi‑free care for low‑income citizens and could allow some hospitals to exit the health insurance system entirely, undermining access for millions.

The law requires private operators to retain only 25% of existing hospital staff, putting many jobs at risk.

Employment: How the Luster of Government Jobs Faded

Nasser’s regime sought to provide what he called “family happiness,” a term meaning a significant improvement in living standards by combating inflation and advancing broader socioeconomic development. Stable employment was the core means to this end. Nasser’s era was the era of the civil servant and state worker.

From 1951, employment policy was selective oriented to fill needs within the state bureaucracy but this did not fully absorb graduates into the workforce based on their academic qualifications.

Under Nasser, hiring university graduates was a pillar of the social order, as described by Mohamed Gad: the system rested on price controls and subsidies, and the provision of jobs to broad segments of the middle class in state institutions.

The state hired all graduates to widen its popular base and secure political loyalty, and wage expenditures did not weigh heavily on the budget. In Nasser’s last year in office, wage spending exceeded 15% of total state outlays.

However, this hiring model created bureaucratic bloat and oversaturation, straining state finances. In the mid‑1970s, amid inflation and Sadat’s infitah policies, his government criticized Nasser‑era allowances as a drain on public funds.

Sadat’s government enacted Law No. 47 of 1978 to make academic qualifications just one condition among others for job eligibility and to link pay to job roles rather than degrees. Yet hiring continued, albeit with longer lags between graduation and employment three and a half years by 1984, and five years by 1987.

Under Mubarak, wage spending as a share of total public expenditure rose from 17% to 23.4% between the early years of his presidency and 2000–2001. But persistent inflation throughout the 1980s and 1990s eroded real wages. Gad notes that state employees’ purchasing power by the late 1990s was lower than in 1976–1977.

Mubarak also cultivated goodwill through annual wage “bonuses” tied to workers’ rallies each Labor Day. Bonuses were cumulative and in 1992 reached 20% aligning with presidential referendums and serving political ends.

Despite periodic increases, wage growth failed to keep pace with inflation. By 2011, the minimum wage was 710 Egyptian pounds, while workers were demanding 1,200 pounds as a basic floor.

Under President Sisi, civil servants came to be seen as economic burdens. In 2017, the Planning Ministry announced a strategy to reduce public employment to one government employee per 40 citizens by 2030, down from one per 13.

Though the 2011 revolution briefly boosted public employment adding one million government jobs in 2011–2012 the Sisi government cut a similar number from 2015–2017.

Under austerity measures, wage spending in the 2017–2018 budget fell below 6% of GDP the fourth consecutive annual decline since Sisi took office.

By 2022, the Central Agency for Public Mobilization and Statistics reported about 3,231,000 government employees, representing roughly 20% of Egypt’s labor force.

The government raised the minimum wage multiple times, reaching 6,000 Egyptian pounds (~$100) in April 2025. But with inflation hitting 35.2% by December 2023, these increases barely offset rising costs of food, fuel, and basic necessities.

In 2020, a four‑person household needed 3,218 pounds to cover basic needs when the dollar was 18–19 pounds; by 2024 the U.S. dollar had surged to 48 pounds.

Egyptians once said, “If you miss the government job, roll in its dust” venerating the security, status, and social capital of public employment. But in recent years under harsh austerity, hiring freezes, and wages and pensions that fail to meet basic living costs that adage seems firmly in the past.

This journey through numbers and statistics across 70 years of modern Egyptian history reflects the lived experience of the Egyptian citizen between hopes and collapses and echoes what Gilbert Achcar wrote in The People Want:

sustainable development cannot rely on private capital alone but requires a break from neoliberal models and a restoration of the state and public sector as leaders of development. Policies from the 1950s to the 1970s despite their flaws produced better social outcomes than the neoliberal policies that followed.

What is needed today is a return to developmental policies without the authoritarianism and corruption that also marred those earlier decades.

Since ancient times, the Egyptian economy has been rent‑based, drawing most of its revenues from natural‑resource rents resources that played no role in the country’s initial creation rather than relying on productive sectors such as industry, agriculture, or services.

It became evident by the mid‑1970s that rent‑based income was the main engine of Egypt’s economy, deriving from oil revenues and earnings from the Suez Canal. Economists also consider foreign aid and remittances from Egyptians working abroad as rent-derived income, since these do not stem from domestic productive activity, and often do not contribute to building internal production instead, they arrive like a windfall from the sky.

According to Dr. Galal Amin (American University in Cairo), when Egypt’s economy grows, it does so thanks to rent incomes. And when its growth falters, it is because those resources have dried up. If one excludes community-based or volatile resources and focuses only on state‑managed ones under governmental control, one finds that even though Egypt is not richly endowed with resources compared to its population size or neighboring countries that does not mean it is resource-poor.

Rather, the path the state followed over recent decades has been marked by high levels of waste and corruption, as institu­tional and personal elites seized control over these resources and al­lotted themselves the major shares of rent.

This dynamic has clearly been reflected in Egypt’s economy, plunging it into an unending cycle of chronic crises leading to worsening living conditions for the majority of the population, the absence of economic justice, and sharp increases in social inequality.

In this piece part of the “Leaky Treasury” dossier we highlight how successive regimes handled the resources Egypt possessed, with a focus on its oil and natural‑gas wealth.

We trace how inept management drained these resources or inflicted huge losses, depriving the Egyptian treasury of massive potential revenue, and, worst of all, forcing the state into energy crises and turning it into a net energy importer.

Oil: A Continuous Depletion of Reserves

Egypt was among the pioneering countries in the region to discover oil, back in 1908. Foreign interests dominated its resources for decades, until the state began nationalizing them in 1948 culminating in full nationalization by 1964.

In the third stage beginning in 1974 under President Anwar Sadat the door was reopened to foreign oil companies investing in the sector. This marked a major shift: oil became one of Egypt’s key economic activities, playing a pivotal role in Egypt’s social and economic development, a role that persists to this day.

After the 1973 War and the subsequent jump in global oil prices, Egypt relied on oil exports to generate revenue that could shield it from budget deficits. During the 1970s and 1980s, the government signed numerous exploration and concession agreements in both the Western Desert and the Nile Delta, triggering a surge in exploration efforts which reflected in increased oil reserves for Egypt.

Instead of using that newfound wealth to develop non‑rent sectors exporting manufactured goods, services, or attracting investment successive governments continued to depend on oil‑derived revenue, which at the time accounted for a substantial portion of general revenues.

They found it difficult to abandon it even when oil prices fell in the early 1990s; instead, they boosted production to compensate for the price collapse, which dropped to about $12 per barrel. By 1993 Egypt reached its production peak: 912,000 barrels per day a level the sector has never again achieved.

At that time, however, production rights seldom belonged solely to the Egyptian government. Foreign oil companies holding extraction rights received approximately 50 percent of output and could dispose of it freely.

The government itself could purchase no more than 20 percent, according to the terms of an agreement between Cairo and the U.S.-based Pan American Petroleum Corporation a fact underscored by researcher Abdel‑Hamid Makawi in his chapter “The Political Economy of Oil in Egypt” in the book “Owners of Egypt: The Rise of Egyptian Capitalism Part II.”

After the ouster of President Hosni Mubarak, signs of corruption in the oil sector became clearer. Contract terms had been skewed in favor of foreign companies that held concessions. Yet, production continued at high levels even as global prices remained weak a combination that eventually proved unsustainable.

By the late 1990s, production had dropped to around 729,000 barrels per day; in the early 2000s it fell below 700,000 in most years. What once had been said to supply nearly half of national consumption in the 1990s reversed by 2006, Egypt became a net oil importer.

Estimates suggest that more than 80% of Egypt’s confirmed oil reserves had been depleted. By 2021, according to the energy‑data platform, Egypt’s reserves stood at roughly 3.3 billion barrels down from 4.5 billion barrels in 2010.

As of January 2024, Egypt’s oil production hovers around 559,000 barrels per day. In parallel, consumption has surged, widening the gap between output and demand, forcing the government to import roughly 100 million barrels annually.

In 2022 alone, the cost of those imports reached an estimated $12 billion draining foreign‑currency reserves just when the economy was already facing a foreign‑exchange crisis.

If current production rates continue, and with reserves already diminished, Egypt’s oil output could be effectively exhausted in as little as 14 to 16 years a result of mismanagement and reckless depletion, compounded by the fact that the extraction was done with minimal regard for securing developmental returns.

The nation’s present and future generations were deprived of their fair share in this national wealth, left to bear the debt of prolonged energy scarcity.

Natural Gas: Unjustified Losses

After Mubarak stepped down in 2011, one major obstacle to unearthing decades of corruption in gas‑export contracts was removed. What emerged was a series of deals that sold gas at rock‑bottom prices above all contracts with Israel, Jordan, and Spain.

For instance, in 2001, the government-run East Mediterranean Gas Company contracted with the Israeli firm Electric Corp to supply 7 billion cubic meters of natural gas annually for 15 years at prices ranging between 75 and 125 cents per million British thermal units (MMBtu).

By 2008, public outrage over the agreement prompted legal challenges, exposing grossly unfair terms that stripped Egypt of vast economic gains, while granting Israel privileges at bargain prices locked in with no provision for adjustment to rising global market rates.

Newspaper documents published by Al‑Masry Al‑Youm show that in 2004, businessman Hussein Salem wrote to the then‑Minister of Petroleum requesting the minimum price be halved to $0.75. The prime minister approved this cut on the same day.

Consequently, Egypt lost major economic opportunities: while Syria and Lebanon received gas at around $5.50 per MMBtu, Egypt sold the same gas to Israel at just $0.75. The difference was staggering. Two rulings issued by the State Council of Egypt in 2008 and 2010 ordered a halt to exports to Israel. But the ministry appealed, and exports resumed. Later adjustments raised the price to $3 per MMBtu still far below market rates.

Following the 2011 revolution, the government canceled the Israel gas deal in 2012. The result: Israel took Egypt to international arbitration and won compensation of $500 million in 2019.

Meanwhile, Egypt signed two agreements with Jordan (in 2003 and 2007) to supply 77 billion cubic feet at $1.27 per MMBtu, and another 32 billion cubic feet at $3.06 per MMBtu. Analytical studies later estimated that Egypt lost out on roughly $3.8 billion in potential revenue between 2005 and 2010 gains that instead benefited private firms and the Jordanian state, not the Egyptian treasury.

Beyond dealings with Israel and Jordan, Egypt liquefied gas for European export parcels at its Dumyat LNG Plant and Idku LNG Plant. A 2000 secret agreement between petroleum companies and the Spanish firm Union Fenosa revealed during the high-profile “Gas Export Contracts Case (No. 41)” showed that 64% of the gas exported from Dumyat was sent to Spain under heavily subsidized pricing. The scandal led to a trial of Hussein Salem and the former petroleum minister Sameh Fahmi, both of whom were sentenced to 15 years in prison.

Comparative analyses of actual revenues versus market‑adjusted rates during 2005–2010 point to a shortfall exceeding $6 billion lost revenues that rightly belonged to Egypt’s public coffers.

And the story doesn’t end there. After 2015’s giant discovery of the Zohr Gas Field, boasting an estimated 30 trillion cubic feet of gas reserves, the government declared self‑sufficiency by 2018 signaling Egypt’s ambition to become a regional energy hub. Officials even envisioned importing Mediterranean gas, liquefying it in Egyptian facilities, then re‑exporting it to Europe: a triumphant “goal achieved” narrative broadcast widely by the presidency.

But within a few years, the situation reversed dramatically. Production at Zohr began to decline; Egypt was forced to import Israeli gas to meet domestic needs not for re-export, as originally planned.

The government also procured additional shipments of liquefied natural gas (LNG) during recent months to keep power plants running, turning Egypt from one of the world’s top exporters of gas into a net energy importer a dramatic reversal underscoring how poor resource management can undo years of supposed progress.

At its peak in 2022, Zohr produced about 2.6 billion cubic feet per day. Riding a wave of demand driven by the global energy crisis and Europe’s ban on Russian oil, Egypt ramped up exports liquefied volumes jumped by 171% compared to the previous year, reaching 7.4 million tons. Revenues soared to roughly $8.4 billion, providing temporary relief to foreign‑exchange shortages while more than half a billion citizens suffered from worsening economic pressures.

Yet in 2023 production declined sharply. Anticipated gas exports, which were supposed to earn Egypt up to $1 billion per month, collapsed. The decline triggered widespread electricity blackouts during summer months, as power plants ran short of fuel. The government imposed rolling electricity cuts initially one hour per day, then two-to-three hours per day when the shortage deepened with the onset of summer.

By early 2024, output from Zohr had dropped to its lowest since the field’s discovery nearly nine years earlier. Simultaneously, Israel cut back deliveries by 26% during peak summer demand, intensifying load shedding in Egypt and forcing the government to drastically restrict gas allocation to industries like cement and fertilizer deepening pressure on strategic sectors.

To prevent total collapse, Egypt began purchasing additional LNG shipments a costly move, logistically burdened and externalizing what should have been domestic supply. This step transforms the country’s relationship with energy from self-reliant producer to dependent importer, draining what little foreign currency remained.

Tracing the history of how Egypt has managed its oil and gas from waste and corruption to poor planning and short‑term exploitation reveals that the root of the present energy crisis lies in decades of mismanagement. This collapse did not stem from scarcity of resources, but from exploitation, bad governance, and lack of transparency.

Conclusion

The core of any sound economic policy lies in efficient allocation of resources and in fostering social and economic justice. Instead, Egypt’s natural‑resource mismanagement has produced results starkly misaligned with the scale of its wealth.

The heavy price has always been borne by the poor and middle classes the vast majority of citizens while a narrow elite cornered the benefits. This violates constitutional guarantees that natural‑resource wealth belongs to all citizens and should be shared equitably.

Achieving real equity requires deep systemic change: transparent public disclosure of all state budgets and contracts, full publication of deals made by state‑owned entities, and open access to data on obligations, revenues, and expenditures so that citizens can oversee and hold authorities accountable. Only then can the misuse of national wealth be stopped, and Egyptians’ right to their shared resources secured.

At the end of May 2024, the Egyptian government announced that the price of subsidized bread would rise from 5 piastres to 20 piastres a 300% increase. That means a family of four that used to spend 30 Egyptian pounds per month on bread alone will now spend 120 pounds.

This decision will carry major economic and social consequences for tens of millions of poor households, given that around 70 million Egyptians rely primarily on subsidized bread, using it as a filling staple in the face of soaring food prices.

At the same conference where the bread price hike was approved, the prime minister hinted at a new government plan to overhaul the established subsidy policy and shift toward direct cash support a policy the government favors.

This move reflects how the government is aligning with the economic reform program promoted by the International Monetary Fund, along with policies skewed toward capital owners at the expense of lower‑income groups.

For the current fiscal year, the subsidy portion of the general budget stands at roughly 636 billion Egyptian pounds representing only about 16% of total expenditure in the 2024–2025 budget, which amounts to 3.9 trillion pounds.

Moreover, this support does not guarantee that households will spend the funds on essential goods; they may redirect them to other non‑essential needs. It is expected that vast segments of the population will be excluded from the planned cash‑subsidy program.

Even if a monthly cash allowance is granted, the severely diminished purchasing power of the Egyptian currency means that over time this allowance may not suffice to cover a family’s basic food needs, especially since the government’s cash transfers rarely keep pace with rapidly rising prices.

Symbolically, this step carries weight: removing bread subsidies has always posed a major challenge to successive regimes seeking to implement IMF decades‑old recommendations since 1977.

The current government, therefore, is not unique in its harsh handling of the subsidy system a system that once embodied a sensitive bond between ordinary Egyptians and successive governments.

The economic and social fallout of these measures, however, raises a persistent question: How much more can Egyptians endure? It is time to revisit the historical ledger of the relationship between the people of Egypt and their rulers, and the path that led us here.

The Origins of Subsidies

Subsidies have long been a fundamental pillar of the social contract between Egyptians and their rulers, organizing the economy and society, and playing a central role in sustaining governing systems.

Modern Egypt’s history as political economist Nazih Ayubi argues in his book The Arab State’s Inflation points to the era of Muhammad Ali of Egypt as the moment when the state, in the European legal‑institutional sense, was formed: a sovereign entity with internal bureaucracy, unified markets, and basic regulations.

It was in Muhammad Ali’s lineage that one can trace the origins of the subsidy system as we understand it today. The state first adopted such mechanisms to regulate the economy and society, primarily to combat widespread black‑market activity a phenomenon that plagued Egyptian society especially during the two World Wars. The 1945 film The Black Market vividly captures how that society was shaped.

Following World War I, the Egyptian government imported wheat and flour, selling them at subsidized prices through government‑run outlets. Beginning in 1941, during World War II, the government expanded subsidies to include essential goods like sugar, kerosene, oil, tea distributed through a ration‑card system tied to family size. That rationing system, in one form or another, survives to this day, though much weakened.

Nasser’s Welfare Expansion

Under Gamal Abdel Nasser, state intervention in the economy deepened. Following agrarian reform and nationalization campaigns, the regime offered a new unwritten social contract: political legitimacy in exchange for social welfare. Nasser framed politics not as rhetoric or slogans but as tangible action and economic policy to guarantee “a better life” for everyone.

State subsidies especially bread became central to this welfare agenda. After the 1967 defeat, the system broadened to include beans, lentils, meat proteins, electricity, gasoline, public transportation, and even textiles.

The subsidies targeted the mass population, not just the poor. By 1970, 20 million pounds were allocated for subsidies, with 75% going to food aid.

These welfare policies, along with land redistribution, rent controls, and expansion of the public sector, helped lower poverty levels in both rural and urban areas as observed by sociologist Saad Eddin Ibrahim. This period became known as the era of the welfare state.

From Nasser to Sadat: The Turning Point

The victory of 1973, however, marked a turning point. Under Anwar Sadat, Egypt embarked on a policy of economic liberalization and integration into the global economy, influenced by pro‑Western ideology hoping to rely on American and Western aid.

The “open door” policy, though, failed to attract sufficient foreign direct investment: only about 5 billion Egyptian pounds flowed in during the first eight years. By 1981, foreign debt had surged to 22 billion US dollars, compared to 1.8 billion at the start of Sadat’s rule in 1970.

Faced with persistent economic crisis and the collapse of domestic manufacturing in favor of rising imports, Sadat turned to the IMF. In 1977, Egypt secured a 600‑million‑dollar loan to address balance‑of‑payments deficits.

As a condition, support to basic goods weakened: spending on subsidies was slashed and prices of essential items, particularly bread, increased triggering what Egyptians remember as the Bread Intifada.

Though often portrayed as a spontaneous “hunger revolution,” the Bread Intifada erupted with organized protests, especially by striking workers in industrial zones like the Shubra Al‑Kheima steel plants and the Alexandria Dockyards.

The protests began on January 18 with slogans such as “Egypt’s workers say: we can’t even find beans.” Over the following days, demonstrations spread across Cairo and elsewhere, culminating in burning of public buildings.

In response, Sadat reversed the price hikes but only temporarily. Thereafter, his regime enacted repressive laws criminalizing labor strikes, jailing labor leaders and key dissidents.

Thus while the regime kept expanding subsidies for bread and flour, it dismantled the political and labor freedoms that might challenge state power later.

Under Mubarak — Managing the Anger

When Hosni Mubarak came to power, he inherited two images: one of a murdered president, and the other of looming social unrest following the 1977 uprising. As historian Samer Suleiman noted, the lesson of 1977 was stark: any sudden and deep cut in public spending would trigger severe social explosions. Gradualism, therefore, became the regime’s sacred principle.

Hence, during the 1980s and 1990s, the state slowly dismantled the subsidy system without provoking widespread unrest. It removed subsidies from fish, chicken, tea, rice and by 1997, only bread, flour, sugar, and oil remained subsidized. Netanyahu, it also restructured food‑ration cards and halted registration of newborns in the subsidy system as of 1989.

Bread remained technically subsidized, but the government manipulated its weight and size shrinking loaves from 150 grams to 130 grams while holding the price at 5 piastres. This gradual erosion prevented mass backlash.

Suleiman argues that political unrest arises not solely from economic strain but from conducive political contexts such as active labor movements and student activism, which Egypt lacked in the 1980s.

January 2011 – The Dream and the Nightmare

Over three decades, anger accumulated, culminating in the 2011 uprising. In its aftermath, the government of Essam Sharaf passed a budget of $91 billion the largest in Egypt’s history and subsidies once again accounted for about 20% of total expenditures.

Still, the underlying structural problems persisted: feeble economic performance and limited resources made this unsustainable.

By 2014, the first year of Abdel Fattah el‑Sisi’s presidency, the regime had already begun dismantling public‑subsidy systems, arguing that broad subsidies disproportionately benefited middle‑ and upper‑income groups, not just the poor. Over a decade, subsidies for fuel and basic goods were withdrawn, and eventually even bread subsidies came under threat. Millions from the lower and middle classes found themselves vulnerable.

The government introduced a smart‑card system for bread distribution: citizens must present their card at bakeries, and each registered individual is limited to five loaves per day. Undisbursed monthly quotas are converted into points redeemable for other subsidized food items. The state then positioned this as a shift from commodity-based subsidies to cash transfers.

Yet even after the allowance was raised to 51 pounds in 2018 (from 15–25 pounds in 2016), rampant inflation and currency depreciation rapidly eroded its real value. As researcher Mohamed Gad explains in When Will the Prices Go Down?, this austerity combined with token pay raises effectively shrank real subsidies to the poor.

For example: in 2008, food subsidies stood at about 21.1 billion Egyptian pounds, when the exchange rate was 5.5 pounds per US dollar roughly 3.83 billion dollars. Today, even though nominal subsidies measure around 134 billion pounds, when adjusted for the current exchange rate their value is only about 2.85 billion dollars illustrating how drastically the real value has declined.

The ration‑card system still covers some 61.8 million people but broad reliance on direct cash support as a social‑safety net has significant flaws. It demands up‑to‑date data systems and continuous evaluation, requiring a capable bureaucratic apparatus something the government lacks. In practice, many of the poor remain excluded, while aid often leaks to the non‑eligible.

It increasingly appears that the real goal of cash‑assistance initiatives is to gradually shrink the overall welfare burden.

The revolution raised many hopes but ended in a nightmare reminiscent of the herd of bulls gathering to break into the farm one night, only to find themselves led straight into the slaughterhouse.

Today’s Egyptians have little to long for regarding a past “golden era.” Perhaps only faint memories remain of some aspirations from the national‑welfare project under Nasser or nostalgia for somewhat better living conditions under Sadat or Mubarak.

But when it comes to bread, ration cards, or subsidies in general, there are many different “eras” to look back on all seemingly better than the present reality. Over the past decade, Egyptians have endured successive rounds of subsidy cuts and austerity. What many once considered inviolable red lines the basic right to affordable bread have been repeatedly violated.

That social contract, once sealed between the state and its people, is now unraveling. And when that bond is broken, one must sound the alarm: the danger is not far off.

From the era of the late President Gamal Abdel Nasser to that of current President Abdel Fattah el-Sisi, one constant has endured across Egypt’s successive regimes: an unwavering reliance on foreign assistance and loans.

Throughout decades, Egypt has remained tethered to external lifelines grants, aid packages, and international borrowing driven by a chronic expectation of salvation from abroad and an entrenched tendency toward indebtedness.

Successive governments of the republic have consistently failed to generate sufficient domestic revenues or to cut spending to match deteriorating public finances. As a result, the country has frequently found itself mired in debt crises with far-reaching impacts on the national economy and the Egyptian pound.

Despite differing fiscal approaches and varying narratives to justify borrowing, each administration found reasons to look outward for solutions. In this series, “A Leaking Treasury,” we examine the core structural problems in Egypt’s economy and the ruling regimes’ attempts to patch them often to cover up corruption and policy failure.

This installment traces the evolution of Egypt’s debt dependency, from Nasser to Sisi, and unpacks the rationale that has driven the nation to depend on foreign financial support.

One Hand to America, the Other to the Soviets

In The Strong Regime and the Weak State, economist Samer Soliman argues that while Nasser’s regime achieved political stability, it required a constant flow of financial resources to maintain that control.

After nationalizing the assets of foreign capitalists, the regime exhausted that pool and turned to foreign loans and aid a defining feature of the political system that continued under Sadat and Mubarak.

Ironically, the act of nationalizing foreign assets became a key reason for Egypt’s borrowing, as the government needed to compensate British shareholders of the Suez Canal Company and other foreign nationals whose assets had been seized.

According to economist Galal Amin in The Story of the Egyptian Economy from Mohamed Ali to Mubarak, Egypt secured various loans in the 1950s and 1960s amounting to approximately 800 million Egyptian pounds 300 million from the United States and 500 million from the Soviet Union.

These loans funded the High Dam, industrial development, infrastructure expansion, public subsidies, and military efforts in Yemen.

By the end of Nasser’s rule in 1970, Egypt’s external debt had reached $1.8 billion about 21% of its GDP, estimated at $8.3 billion. Amin contends that Nasser’s borrowing was largely productive, aimed at capacity-building rather than consumption.

Unlike later periods, Nasser avoided high-interest borrowing, relying instead on grants or soft loans from the Eastern bloc, even if this slowed development.

Sadat’s Debt: Pivoting from East to West

Under Anwar Sadat, Egypt’s debt skyrocketed. In just five years, foreign civil debt jumped 350%, from $1.8 billion to $6.3 billion. While external conditions played a role, Galal Amin attributes much of the crisis to poor economic management especially the unrestrained import of luxury consumer goods after the 1973 war, which drained foreign currency reserves amid declining exports.

To cover the growing trade deficit, the regime turned to expensive short-term loans. Sadat dismissed internal objections to these policies, deeming them “higher political matters.” Amin compares the pressure Sadat faced to that endured by Khedive Ismail in the 19th century from intermediaries and financiers.

Though Egypt received far more Arab aid under Sadat than under Nasser, nearly half of the country’s foreign currency deficit during Sadat’s early years was covered by grants from Gulf states. Nevertheless, regional donors began to express skepticism over Egypt’s ability to use the aid effectively, citing mismanagement and corruption.

According to Soliman, Egypt’s dire financial state compelled Sadat to make historic political concessions including his visit to Israel under pressure to secure international support. The westward pivot, often interpreted as admiration for the West, was more a desperate attempt to avoid regime collapse.

This strategic shift temporarily revived Egypt’s economy between 1977 and 1981, driven by increased oil exports and worker remittances. Yet, instead of reducing debt, Egypt borrowed even more foreign civil debt surged from $4.8 billion in 1975 to $22 billion in 1981.

Amin argues that the resulting investments were misallocated to low-productivity sectors, leaving Egypt saddled with debt but without the productive capacity to service it.

While the postwar reconstruction of the Suez Canal region and restocking of essential goods offered limited gains, the 1973 war itself had been largely funded by Arab grants, undermining its use as a justification for spiraling debt.

A Heavy Legacy and a Pivotal Reprieve

Hosni Mubarak inherited a staggering debt load from Sadat $30 billion, or 141% of GDP at the time. In his first year, servicing just the civil portion of that debt cost $2.9 billion.

Declining revenues from oil, the Suez Canal, and remittances forced Mubarak’s regime to continue borrowing. By 1987, Egypt’s debt had ballooned to $44.15 billion, according to World Bank figures.

Facing an economic crisis by the late 1980s, Egypt teetered on the brink of insolvency. In Egypt Under Mubarak (1989), political analyst Robert Springborg outlined three scenarios: authoritarian rule via military-capitalist alliance; a pact with Islamists to legitimize the regime; or a strategy of waiting for foreign resources to reappear.

It was the third scenario that materialized. Iraq’s 1990 invasion of Kuwait opened a new geopolitical opportunity. In return for joining the US-led coalition against Saddam Hussein, Egypt received a $13.7 billion debt write-off and $4.7 billion in new aid. This extraordinary turn of events helped the country avert collapse.

The 2008 global financial crisis, however, reversed some of the progress, as FDI and exports fell. The government responded with more borrowing, and by the time of the 2011 revolution, Egypt faced renewed economic strain marked by rising debt, inflation, and unemployment.

Sisi’s Debt: Teetering on the Brink

Today, Egypt is grappling with an unprecedented debt crisis. While the government no longer publishes domestic debt figures, estimates suggest public debt may exceed GDP. According to the Central Bank, Egypt is due to repay at least $42.3 billion in 2025, including $32.8 billion in medium- and long-term debt and $9.5 billion in short-term obligations. Total external debt stands at around $170 billion.

Under President Abdel Fattah el-Sisi, Egypt initially benefited from a historic inflow of Gulf aid estimated at $100 billion between 2011 and 2015. Simultaneously, the administration embarked on massive infrastructure projects, starting with the expedited Suez Canal expansion in 2015, which drained foreign reserves and contributed to a dollar crisis.

As Gulf countries grew reluctant to offer further grants, citing Egypt’s failure to build a self-sustaining economy, Cairo turned back to the IMF after a 26-year hiatus. The 2016 deal involved a $12 billion loan tied to austerity conditions: subsidy cuts, spending reductions, currency devaluation, and tax hikes.

The IMF’s endorsement enabled Egypt to tap global debt markets, issuing high-yield bonds and attracting short-term speculative capital. But while this provided liquidity, it also multiplied Egypt’s debt burden, which quadrupled over Sisi’s tenure.

The Russian invasion of Ukraine in 2022 exposed Egypt’s fragility: $25 billion in “hot money” exited the country, deepening the crisis. Egypt responded the only way it knew—seeking aid and taking on more debt. It issued $71.6 billion in short-term debt instruments in early 2024 alone, offering interest rates exceeding 30%.

Despite the warnings, the borrowing spree continues. Egypt must secure 2.8 trillion Egyptian pounds in financing in the next fiscal year, mostly through more foreign loans and debt issuances.

Then came the miracle. Amid escalating tensions following the Hamas-led Al-Aqsa Flood operation in October 2023, Egypt emerged as a key player in regional diplomacy, owing to its geography and strategic relevance. The West moved quickly to stabilize its most crucial partner.

A $35 billion deal with the UAE to acquire Ras El Hekma and an $8 billion EU aid package arrived just in time echoes of the Gulf War reprieve under Mubarak.

Debt has been a central force shaping Egypt’s modern history. Under Nasser, loans were used for industrialization and infrastructure. Under Sadat, they fed consumer imports and unproductive investments. Mubarak borrowed to service existing debts and preserve regime stability.

Under Sisi, borrowing fueled vanity megaprojects, exacerbated economic fragility, and led to record inflation, currency devaluation, and declining living standards.

Egypt’s financial policies have evolved from state-led development to survival through speculation, as each crisis deepens the country’s dependency on external rescue. Once again, a geopolitical twist has granted Egypt temporary relief but unless the structural flaws are addressed, the cycle of debt will only continue.

In November 2023, the Houthi movement began launching intermittent attacks on Israeli-linked shipping vessels particularly in the Red Sea using missiles and drones in solidarity with the Palestinians in Gaza, who have been subjected to a brutal Israeli assault since October 7, 2023.

The United States and its Western allies swiftly responded to the Houthi attacks. However, they failed to deter the Yemenis from expressing their solidarity with Palestinians. Several ships were sunk or set ablaze, while others were seized.

These reciprocal attacks have disrupted global trade. At the heart of this disruption is the Bab el-Mandeb Strait, a narrow passage between Yemen and Djibouti at the southern tip of the Red Sea. It is one of the busiest maritime chokepoints in the world, through which roughly one-fifth of global oil consumption passes.

Egypt, too, has felt the impact. Ships that normally transit the Suez Canal a vital source of national revenue—en route to the Mediterranean have been forced to reroute along a longer and costlier path around the Cape of Good Hope at the southern tip of Africa.

This shift has led to a sharp decline in Suez Canal revenues, prompting Egyptian authorities to push forward with the Arab Trade Corridor an ambitious logistics project connecting Gulf countries with Egypt on a path to European and American ports.

Reviving an Old Vision

This planned corridor falls under wider initiatives aimed at reviving ancient trade routes like the Silk Road and enhancing intercontinental cooperation. The Houthi attacks have accelerated the implementation of this promising project, which brings together Egypt, Jordan, and Iraq and aims to link Gulf and other Arab nations in Asia with North African states via Egypt, and onward to Europe and the Americas.

The project envisions a multi-modal logistics network combining land routes, railways, seaports, and inland waterways. Goods from Asia and the Gulf would arrive at Iraq’s Basra port on the Arabian Gulf, be transported to Baghdad, and then shipped to Jordan’s historic Aqaba port.

From there, they would move to Egypt’s ports of Nuweiba and Taba. Railways and highways would then connect them to Egypt’s Mediterranean ports Arish, Port Said, Damietta, and Alexandria.

Parts of the infrastructure already exist, including seaports in all three countries and segments of railway in Iraq, Jordan, and Egypt.

According to Egypt’s Ministry of Transport, the country is currently constructing a 500-kilometer railway line Taba–Arish–Bir al-Abd–Ismailia as one of seven international logistical corridors included in the project. This line will link the Red Sea ports of Nuweiba and Taba with the Mediterranean port of Arish.

The project will be implemented in three phases:

1. Transporting goods from Iraq to Jordan

2. Moving goods from Jordan to Egypt

3. Exporting the goods to European and American ports via the Arab Bridge Maritime Company.

This maritime company was established in November 1985 as a joint venture between the governments of Jordan, Egypt, and Iraq, with a starting capital of $6 million equally divided among the three founding countries. Since 2002, the company’s capital has increased steadily, reaching $100.5 million by 2014, according to its website.

Today, the company owns a fleet of seven vessels valued at over $140 million. Previously, it relied on leased ships. It now plans to expand operations and further strengthen its fleet.

“New Levant” Vision

This proposed corridor is part of a broader cooperative framework launched in September 2020 between the three countries under the name “The New Levant” an economic initiative modeled on the European Union aimed at forming a regional bloc capable of addressing shared challenges, according to former Iraqi Prime Minister Mustafa al-Kadhimi.

While the idea was first floated during the tenure of former Prime Minister Haider al-Abadi, it was under al-Kadhimi’s leadership and with US approval that the project began to gain traction, as Iraq sought to deepen ties with Egypt and Jordan and move away from Iranian influence.

In just two years, leaders of the three nations have met four times, with ministerial and senior official meetings also increasing. This growing coordination aligns with US strategic interests in the region.

It’s worth noting that thirty years ago, these three countries along with North Yemen established the Arab Cooperation Council shortly after the end of the Iran-Iraq War. That council aimed to rival the Gulf Cooperation Council (GCC), which includes six Arab states bordering the Gulf but excludes Iraq. However, the project was quickly abandoned following Iraq’s invasion of Kuwait.

The renewed alignment is not limited to diplomacy. Economic cooperation has also surged in recent years. Egypt began importing Iraqi oil in 2017, followed by Jordan in 2019. Iraq, in turn, hosts a growing labor force from Egypt and Jordan.

Numerous agreements now exist among the three nations in sectors such as electricity exchange, energy cooperation, manufacturing, agriculture, and transport all aimed at serving mutual interests.

Multiple Ambitions

The combined GDP of Iraq, Egypt, and Jordan is approximately $800 billion, and their collective population stands at around 155 million. This presents vast opportunities if cooperation can be effectively implemented. Egypt contributes demographic weight; Iraq brings energy resources; and Jordan offers a strategic geographic link between the two.

Beyond connecting Asia, Africa, Europe, and the Americas, the Arab Trade Corridor aspires to position the three countries as major logistics hubs in global trade routes. It could also enhance political, economic, and military ties among them by facilitating energy and goods flows from Basra in the east to the Mediterranean in the west.

In terms of distance, the corridor offers a shorter route than the traditional passage through the Arabian Gulf, Indian Ocean, and Red Sea, potentially cutting travel time and shipping costs for vessels heading to European ports.

In addition to its economic promise, the project could elevate the regional standing of the participating countries. Control over trade routes often translates into political leverage and greater influence in global affairs.

Strategically, the project offers Iraq an opportunity to diversify its regional alliances and reduce its dependence on Iran. Meanwhile, Egypt and Jordan see the initiative as a means of decreasing their reliance on Saudi Arabia.

Chances of Success

The Arab Trade Corridor could yield significant political and economic benefits for its stakeholders. Yet, it faces formidable obstacles chief among them the fact that it seeks to provide an alternative to the Suez Canal.

Should Israel’s war on Gaza end and stability return to the Bab el-Mandeb Strait, global shipping traffic would likely resume its normal routes through the canal, which is easier and more cost-effective.

This scenario suggests that Egypt is poised to benefit regardless of the outcome. If the canal is bypassed, Egypt gains from the corridor. If shipping resumes through the canal, Egypt still wins. Iraq and Jordan, by contrast, may see fewer incentives, dampening their enthusiasm for the project.

Another issue is the limited domestic production in Egypt, Iraq, and Jordan. The corridor may lack sufficient export goods to sustain regular shipping activity, as most production in these countries serves domestic markets.

Moreover, Egypt and Jordan are grappling with severe financial strains, making it difficult to fund such a massive undertaking without external loans most of which come with strings attached. Technical hurdles, corruption, and bureaucratic inefficiencies further complicate matters.

Geopolitical challenges also loom large. Some regional powers have a vested interest in preventing the project’s success. Chief among them is Israel, whose proposed Ben Gurion Canal intended to connect the Red Sea to the Mediterranean would face direct competition from this Arab initiative.

Iran is equally wary. A successful corridor would loosen its grip on Iraq and shift Baghdad closer to its Arab neighbors, threatening Tehran’s strategic foothold in the country. As such, Iran is expected to actively work against the project.

Intra-Arab trade accounts for only about 13.8% of the Arab world’s total foreign trade, a modest figure according to the Arab Monetary Fund. High customs duties remain a major barrier, even though some countries have lowered their tariffs to near-global averages. The lack of harmonized standards and a unified vision has further hindered trade integration.

Still, success is possible if political will can be summoned. Should the corridor be completed, it could become a powerful tool for economic recovery, job creation, and geopolitical balance. And perhaps, with time, more Arab nations may join the initiative to expand its impact even further.

In April 2010, former Iraqi Prime Minister Nouri al-Maliki laid the foundation stone for the Grand Faw Port project. It was envisioned as a regional trade hub that would rival the most prominent ports in the Middle East and transform Iraq into a key destination for global trade and transport.

Iraqi officials hoped the new port would shorten trade routes linking Iraq with the Red Sea and the Mediterranean, establishing the country as a pivotal player in global commerce. However, ten years on, only the breakwaters have been completed albeit record-setting ones that entered the Guinness World Records as the longest in the world.

Despite repeated government failures to complete the project, Iraq has not let go of its dream of becoming a transit hub for global goods, stretching from its southern tip to the north. Today, that ambition is being revived under a new initiative dubbed the “Development Road” with the Grand Faw Port at its core.

This report, part of our “Gateways of Influence” series, explores Iraq’s vision for the Development Road project, its strategic objectives, the countries supporting or resisting it, and the obstacles it may face.

A Historic Crossroads of Trade

To understand the significance of this endeavor, it’s essential to revisit Iraq’s historical role in ancient trade networks. Mesopotamia was long a central artery in the commercial lifelines of the ancient Near East, situated at the crossroads of overland trade routes connecting the northeast with the southwest.

Its geographic location positioned it as a major conduit for trade between Anatolia and the Mediterranean on one side and central and southern Arabia on the other. Trade caravans traversed routes linking the Mediterranean to the Arabian Gulf, the Arabian Sea, and eastward to India.

The civilizations that rose and fell in Iraq built thriving trade centers and maintained extensive networks that reached as far west as the Mediterranean and Asia Minor. Caravans carried gold, silver, gemstones, copper, timber, dates, citrus fruits, and other commodities, with rulers ensuring their protection making Mesopotamia a vibrant hub that interacted with neighboring centers of civilization.

Because trade was the lifeblood of early civilizations, Iraq’s historical position enabled it to leave a deep imprint on the region’s development. This centrality helped shape the trajectory of civilizations and contributed significantly to the rise of the ancient world.

The Development Road

In recent years, Iraq has expressed a strong desire to reassert itself on the geopolitical stage through trade corridors. Successive governments have seen the construction of a new port as the cornerstone of these strategic ambitions.

In 2010, al-Maliki’s government pledged to build a port in the southern city of Al-Faw, on the shores of the Arabian Gulf, within four to five years at an estimated cost of $4.6 billion. The government expected to recoup that investment within three to four years of the port’s launch, with a consortium led by an Italian firm awarded the construction contract.

The port was planned for the confluence of the Tigris and Euphrates rivers, covering an area of 54 square kilometers and hosting up to 90 berths. Its breakwater — at 14.5 kilometers would be the world’s longest, designed to protect incoming vessels from turbulent seas.

Yet the project stalled for over a decade due to a range of domestic and international challenges. Now revived, the port is being integrated into a more expansive initiative: the Development Road, also known locally as the “Dry Canal.”

In April of this year, Iraqi Prime Minister Mohammed Shia’ al-Sudani and Turkish President Recep Tayyip Erdoğan signed a four-party memorandum of understanding, joined by the UAE and Qatar, to cooperate on the Development Road project starting with the completion of the Grand Faw Port.

The initiative includes a 1,200-kilometer high-speed rail network running through Iraq, capable of transporting cargo and passengers at speeds of up to 300 km/h a dramatic improvement over the current average of 60–70 km/h.

In addition to railways, the plan features the construction of express highways that traverse ten Iraqi provinces, including Diwaniyah, Najaf, Karbala, Baghdad, and Mosul. Pipelines for oil and gas will run from southern Iraq to the Turkish border at Fishkhabur, enabling goods from China and other Asian nations to reach Europe efficiently.

The estimated cost of the project is $17 billion, to be implemented in three phases: the first by 2028, the second by 2033, and the final by 2050. The Development Road will link the Grand Faw Port to Turkey and eventually to Europe.

The plan also envisions the creation of new industrial and residential cities along the corridor and the renovation of Iraq’s aging infrastructure. The first phase has been contracted to South Korea’s Daewoo Engineering & Construction.

A key feature will be one of the world’s largest undersea tunnels, leading to Iraq’s southern coast near the Kuwaiti border. By February, Iraq had completed 60% of the tunnel, which will stretch 2,444 meters under Khor al-Zubair, with an 18-meter clearance to allow maritime traffic.

It is designed to handle heavy truckloads and massive container traffic from Basra to Jordan and Turkey.

On the Turkish side, the project includes 615 kilometers of new rail lines and 320 kilometers of highways, integrated into the country’s existing networks at a cost of around $8 billion greatly facilitating trade from Iraq and the Gulf to Europe.

By the end of phase one, the railway’s freight capacity is expected to reach 3.5 million containers and 22 million tons annually, increasing to 7.5 million containers and 33 million tons in a decade, and eventually 40 million tons by 2050.

Economic Aspirations and Political Leverage

Iraq is aiming to capitalize on its strategic geography and multiple border crossings to open an alternative, secure, and rapid global trade route one that could transform the country into a regional trade nexus, provided security challenges are overcome.

If realized, the Development Road will not only link Iraq and Turkey, but also bolster intra-regional trade and facilitate commerce between Asia and Europe. It could cut shipping time between Shanghai and Rotterdam from 33 days to just 15.

This would give a significant boost to Iraq’s economy, spurring growth, creating jobs, and increasing production. Prime Minister al-Sudani sees the corridor as a gateway to stronger integration into global markets.

The project aligns with Iraq’s strategic objective of economic diversification. With 93% of government revenue still coming from hydrocarbons, the country is seeking ways to reduce its oil dependence and the Development Road offers a promising start.

More than just an economic undertaking, this initiative could shift Iraq’s political dynamics. If successful, the corridor could contribute to national stability, enhance Baghdad’s regional standing, and restore Iraq’s historic role as a bridge between East and West.

Regional Stakeholders

Turkey views the Development Road as a modern Silk Road one that would bolster its own economic, geopolitical, and military clout. Turkish leaders have offered full support for the initiative, with President Erdoğan calling it “vital for the region,” especially for Iraq and Turkey.

The project has also attracted support from Qatar and the UAE, both of which have moved beyond oil dependency and diversified their economies unlike Saudi Arabia, which remains heavily reliant on oil.

Iraq is currently courting Riyadh to join the Development Road, arguing that it complements rather than competes with Saudi development plans. All signs suggest the kingdom may eventually come onboard.

Iran, too, supports the project, even if it hasn’t officially joined. Tehran sees the corridor as a potential way to bypass Western sanctions, shore up its faltering economy, and offset declining reliance on China’s southern Belt and Road route.

If fully realized, the Development Road could mitigate long-standing regional rivalries, foster economic cooperation, and contribute to broader regional and global stability.

Major Challenges Ahead

Nonetheless, Iraq faces considerable hurdles. Chief among them is financing: the government has yet to clarify how the project will be funded. Given Iraq’s fragile economy, Baghdad may need to rely on private sector partnerships or external loans.

Legal inconsistencies, corruption, and bureaucratic inefficiencies remain serious barriers. These issues have long deterred foreign investment evidenced by Iraq’s failure to complete the Faw Port 14 years after construction began.

Political instability and security concerns are also pressing. Although Iraq has experienced a relative calm recently, the situation remains fragile. The proliferation of armed militias and terrorist groups over the past two decades makes the environment volatile.

Some political factions and figures, often aligned with foreign interests, may actively work to sabotage the project to protect their own agendas.

If Iraq can overcome these challenges, the Development Road could become a linchpin in global logistics, reviving the country’s historical status and creating economic ripples across the region.

Despite growing Chinese influence, the United States and its closest allies still hold significant economic advantages over Beijing and its partners, according to a year-end report from Capital Economics. Although the Chinese bloc spans nearly half of the world’s landmass compared to 35% for the U.S.-aligned bloc it contributes only 27% of global GDP, while the U.S. bloc accounts for roughly 67%. Furthermore, half of global goods trade occurs between countries aligned with the U.S.

Yet, China’s economy cannot be underestimated. It is growing at a faster pace than the American economy, capitalizing on the fragmentation of the U.S.-led bloc and the developing world’s need for a “strong partner who doesn’t impose conditions.” Beijing’s expansive Belt and Road Initiative (BRI), also known as the New Silk Road, continues to reach an increasing number of nations.

Although Washington understands that China surpassing its economic bloc is a distant—and perhaps unattainable prospect, it is nevertheless racing to contain Beijing’s growing global influence and curb its dominance over international trade.

In the eyes of the U.S., controlling global trade means controlling its routes. In a direct challenge to China’s Silk Road, Washington and its allies unveiled the India-Middle East-Europe Economic Corridor (IMEC) last fall a grand infrastructure initiative connecting Asia to Europe via some of the world’s largest emerging and developed economies within the G20. Yet the ambitious plan faces a series of serious obstacles.

The Spice Route Revival

In September, on the sidelines of the G20 summit in India, President Joe Biden announced the launch of the IMEC referred to by some as the “Spice Route” calling it a “historic” agreement.

Signatories included India, the U.S., France, Germany, Italy, and two Arab Gulf states Saudi Arabia and the UAE—uniting advanced and emerging economies from the G20. The initiative links the Indo-Pacific to the Middle East and Europe.

The agreement envisions a trade corridor connecting India to the Middle East and Europe to boost economic growth, expand trade among U.S. partners, improve energy access, and enhance digital connectivity. If fully implemented, the corridor could cut transit times between India and Europe by 40% and reduce costs by approximately 30%.

The proposed 4,800-kilometer corridor would include rail lines, port links, electricity and hydrogen pipelines, and data cables stretching from India to Europe via the UAE, Saudi Arabia, Jordan, and Israel.

Project advocates say the route would interconnect ports across continents, stimulate prosperity in the Middle East, benefit lower- and middle-income countries, and reposition the region as a vital trade hub.

According to initial maps, the corridor would begin in Mumbai, travel by sea to Dubai, then move overland by rail to the UAE’s Al Ghuwaifat, cross into Saudi Arabia, continue through southern Jordan, reach the Israeli port city of Haifa, and finally sail to Greece’s Piraeus port before entering the broader European rail network.

Reasserting U.S. Influence

Washington’s willingness to shoulder a large portion of the project’s cost is strategic. By financing most of the corridor in U.S. dollars, it reinforces the greenback’s global primacy at a time when rival powers are pushing to reduce their dependence on it.

The U.S. has long sought a major infrastructure initiative to reinforce ties with Asia, Europe, and the Middle East, strengthen the position of its allies, and counter integration into rival Chinese-led projects. The IMEC also aims to maintain peaceful and cooperative relations between Asia and Europe outcomes that ultimately serve American interests.

Additionally, the corridor serves to maintain U.S. influence in key regions by positioning Washington as a robust investor and reliable partner for both developing and developed nations. This explains the Biden administration’s full-throated backing of a project that remains largely conceptual nearly eight months after its launch.

The timing is critical. U.S. allies like Saudi Arabia and the UAE have recently joined BRICS, the China- and Russia-aligned economic bloc, signaling an openness to rebalancing their foreign policy and economic partnerships.

Thus, the corridor is, in part, a response to the Gulf states’ growing alignment with China and Russia. It aims to tether traditional allies back to Washington’s orbit and discourage deeper integration with competing power centers.

A key goal is also to secure energy supply lines for U.S. allies and create an alternative to Russian energy a lesson hard-learned during the supply shocks that followed Russia’s invasion of Ukraine.

The corridor, often referred to as the Spice Route, unites leading oil and gas exporters and importers under one framework. The global energy crisis prompted by the war in Ukraine highlighted the urgency of developing alternatives to Russian energy to ensure market stability and security.

Future plans include facilities for the production and transport of green hydrogen, further enabling energy transfers from producer to consumer nations reinforcing the U.S. view that energy security is national security.

A Direct Response to China’s Belt and Road

Although U.S. officials insist the IMEC isn’t aimed at any specific country or initiative, the timing, structure, and narrative of the project clearly suggest it is a counter to China’s Belt and Road Initiative.

Washington hopes the IMEC will unlock new trade routes across the Middle East, South Asia, and Europe, decreasing dependence on China and bolstering its own allies amid intensifying U.S.-China competition.

Unlike the Chinese model, which often relies on debt financing, IMEC will be funded by its member states without loans or aid each partner bearing a defined share of the financial burden. Reports estimate the project’s cost at $47 trillion, with the U.S. expected to be the primary contributor to offset Beijing’s expanding global reach.

China, for its part, launched the Belt and Road Initiative over a decade ago to link its economy with vast swaths of Asia, the Middle East, and Africa. By 2027, spending on the BRI could exceed $1.3 trillion, bringing not only economic rewards to Beijing but also significant diplomatic and strategic clout.

In recent years, China has cemented its presence in the Middle East, investing in Gulf infrastructure projects such as Abu Dhabi’s port, Qatar’s Hamad port, Kuwait’s Silk City, and regional digital networks, including numerous contracts awarded to Huawei. Gulf nations have also shown interest in Beijing-led multilateral frameworks developments that have caused concern in Washington.

Elevating India’s Role

The project’s unveiling in New Delhi was no coincidence. The U.S. is intent on deepening ties with India, a key player in global geopolitics and economics.

India has posted strong economic gains in recent years. In 2022, its GDP accounted for 3.37% of global output, and its population at 1.41 billion is the largest in the world.

Under Prime Minister Narendra Modi, India has moved closer to the U.S. and its allies. Still, Washington remains wary, particularly given India’s active role in BRICS.

New Delhi seeks to avoid being perceived as part of any geopolitical bloc or subordinate to a major power. Nonetheless, the U.S. continues to woo India as a counterbalance to China in the Indo-Pacific.

Washington also hopes that by investing in India, it can coax New Delhi into taking a firmer stance against Russia and Iran longtime Indian allies and isolate the core of the Chinese-Russian-Iranian triangle.

A Path to Normalization?

The IMEC carries another key geopolitical aim: integrating Israel into the region and laying the groundwork for expanded normalization with Arab states—a prospect that has been welcomed by Tel Aviv.

Israeli Prime Minister Benjamin Netanyahu appeared in a video after the project was announced, touting Israel’s central role in the proposed route.

The U.S. sees the corridor as a vehicle to further normalize ties between Israel and Arab nations especially Saudi Arabia, a crucial player in the project. Full integration of Israel into the regional infrastructure would serve U.S. strategic interests.

Normalization efforts have advanced in recent years. In 2020, the UAE and Bahrain signed the Abraham Accords with Israel, brokered by Washington. Sudan and Morocco soon followed. Egypt and Jordan have had peace agreements with Israel since 1979 and 1994, respectively.

While Saudi normalization has yet to materialize, it remains a key U.S. objective. Riyadh appears open to the idea in principle but is seeking concessions—particularly on the Palestinian issue.

Obstacles Ahead

Despite its promise, the IMEC faces serious challenges. Chief among them are the conflicting geopolitical and economic agendas of the signatory states. Each country has distinct interests, and divergent views may hinder collective implementation.

Rather than moving as a cohesive bloc, each participant may pursue its own goals especially Middle Eastern nations hoping to extract strategic advantage from the U.S.-China-Russia rivalry. Washington will need sustained diplomatic engagement to maintain cohesion.

Financial uncertainty also looms. The corridor’s full cost remains undetermined, and it’s unclear how the burden will be distributed. If the costs outweigh the benefits, the project’s economic viability may be questioned.

Even with funding secured, the corridor’s implementation will take many years—if not decades. Much of the current infrastructure along the route will require massive upgrades.

Security is another major concern. The recent war in Gaza demonstrated how quickly conflict can disrupt global supply chains. Given that part of the corridor passes through occupied Palestinian territory, the route’s stability remains uncertain. Investor confidence has already been shaken.

Moreover, several key regional powers Iran, Turkey, and Egypt have been excluded from the plan. Their geographic and strategic importance makes their absence notable and may fuel further opposition.

These combined hurdles could delay or derail the project. Yet Washington appears committed to pressing ahead, seeing the IMEC as an essential instrument for balancing China’s growing influence in Asia and beyond, and for reasserting American global leadership.

In the second century BCE, Emperor Wu of the Han Dynasty dispatched General Zhang Qian westward to forge alliances against the Xiongnu tribes. Though Zhang was captured and remained in captivity for 13 years, he eventually escaped and returned to China.

Upon his return, the emperor sent him on another mission to neighboring peoples, relying on his deep knowledge of regional routes. In doing so, Zhang Qian laid the foundations for the first routes stretching from China to Central Asia, eventually connecting with Europe.

These routes, which extended from the Chinese capital of Chang’an to Europe via Central Asia and the Middle East, gained fame and utility for various purposes: diplomacy, religion, scholarship, trade, and the transport of goods such as Chinese tea, paper, gunpowder, perfumes, and incense.

Silk was the most prominent Chinese export along this route, leading German geologist Baron Ferdinand von Richthofen in the mid-19th century to coin the term “Die Seidenstraße” or “Silk Road.”

Spanning 12,000 kilometers over land and sea, the Silk Road enabled China to expand its trade, export its culture, and extend its influence across the ancient world. It reached its peak during the first millennium under the Roman and later Byzantine empires, as well as China’s Tang Dynasty (618–907 CE).

However, with the emergence of new trade routes between Asia and Europe, the expansion of the Crusades, Mongol advances in Central Asia, and increasing economic isolation among Asian states, Silk Road commerce declined. Today, the Chinese Communist Party is reviving the legacy in a bid for global influence.

The First Steps

In the 1990s, China transitioned from isolation to becoming an economic powerhouse, thanks to a series of reforms led by Deng Xiaoping. These included opening trade routes, encouraging foreign investment, and granting farmers rights to their land.

The Chinese economy soared to record growth rates. Chinese products proliferated worldwide, standards of living improved for millions, poverty declined sharply, and education levels surged.

Within this context, efforts emerged to reestablish the Silk Road and project Beijing’s influence globally. Among the early initiatives was the Eurasian Land Bridge, a railway network stretching from Lianyungang in eastern China to Rotterdam in the Netherlands via Kazakhstan, Mongolia, and Russia.

While significant for moving Chinese goods to Europe, this project fell short of Beijing’s global ambitions. In 2013, China launched the “Belt and Road Initiative” (BRI), a sweeping strategy rapidly endorsed by over 70 countries.

Six years later, President Xi Jinping convened the first Belt and Road Forum, attracting representatives from 150 countries. The summit aimed to promote a vision of China as a global economic nexus.

Project Details

China’s initiative seeks to connect nearly half the world’s population through a vast network of highways, railways, air routes, seaports, energy pipelines, and simplified border crossings. It envisions integrating one-fifth of global GDP by establishing expansive trade and investment links.

To support this, China has funded hundreds of Special Economic Zones designed to create jobs and foster technological adoption, including 5G networks spearheaded by telecom giant Huawei.

Initially, the initiative consisted of two components: the overland Silk Road Economic Belt and the Maritime Silk Road. Collectively dubbed “One Belt, One Road,” the project eventually became the Belt and Road Initiative.

The Maritime Silk Road extends from China through Singapore and India to the Mediterranean, while the land-based component includes six corridors: the New Eurasian Land Bridge, the China-Mongolia-Russia Corridor, the China-Central Asia-West Asia Corridor, the China-Indochina Peninsula Corridor, the China-Pakistan Economic Corridor, and the Bangladesh-China-India-Myanmar Corridor.

Crucially, the Chinese state guarantees the initiative, with its four state-owned banks financing the projects. Private sector participation is excluded, drawing criticism for the initiative’s state-centric model.

Major Investments

Key projects include a vast rail network connecting 62 Chinese cities with 51 European cities across 15 countries. In 2017, the first freight train from China to the UK arrived in London after an 18-day, 12,000-kilometer journey through seven countries. This route offers shipping at half the cost of air freight and saves two weeks compared to sea transport.

In Pakistan, China has launched infrastructure projects under the China-Pakistan Economic Corridor, linking the country’s southern coast to Kashgar in China. Plans include highways, hydropower dams, and an upgraded Gwadar Port on the Arabian Sea.

As of last year, China had signed over 200 cooperation agreements related to the BRI with more than 150 countries and 30 international organizations, encompassing two-thirds of the global population and 40% of global GDP.

According to Chinese sources, the initiative has driven 3,000 cooperation projects and attracted $1 trillion in investments. From 2013 to 2022, China’s total trade with BRI partner countries reached $19.1 trillion, with an annual growth rate of 6.4%.

Since 2013, China has invested $25 billion directly under the BRI, with projections suggesting total spending may exceed $1 trillion.

Originally focused on linking East Asia and Europe, the BRI has since expanded to Africa, Oceania, and Latin America, becoming one of the most ambitious infrastructure endeavors in history.

China has signed BRI-related agreements with 52 African countries, targeting roads, ports, and railways. Chinese investments in Africa surged to over 20% of total foreign investment by 2020, up from just 3% two decades earlier.

Chinese loans have supported airports, highways, and rail systems, including the “Silk Road” railway linking Kenya’s capital Nairobi to the port city of Mombasa.

In December 2022, Tanzania signed a $2.2 billion deal with a Chinese firm to complete a railway connecting its main port to neighboring countries. China has also turned a small Tanzanian coastal town into what may become Africa’s largest port, while building similar infrastructure in Namibia and Nigeria.

Supporters and Skeptics

Turkey strongly backs the BRI, viewing it as a means to amplify its Mediterranean influence and leverage its strategic east-west geography. China, in turn, sees Turkey as a critical partner.

Russia is also a key supporter. President Vladimir Putin has praised the BRI as a catalyst for Eurasian cooperation and sustainable economic development. The initiative bolsters both Russian and Chinese standing, especially under Western sanctions, though it also risks sparking competition over Central Asia.

Pakistan is another key ally, having received $25 billion in direct Chinese investment through the China-Pakistan Economic Corridor, which has created around 240,000 jobs. For China, this ensures a faster, safer trade route.

In Europe, the UK has signaled support. Former Finance Minister Philip Hammond pledged British expertise in project financing, calling for collective action to realize the BRI’s potential.

Most African nations have embraced the initiative to attract investment and consolidate power. China has leveraged this to expand its footprint and control resource-rich areas.

However, some countries have grown wary. Italy, initially the first G7 nation to join, is now reconsidering its participation. Prime Minister Giorgia Meloni recently signaled Italy’s intent to withdraw, reflecting tensions with the US.

The US is the staunchest critic, viewing the BRI as a challenge to its economic and political interests. Washington is countering by enhancing infrastructure in Central Asia, Africa, and Europe, though critics argue it falls short of local needs.

European skepticism is also rising. The EU has unveiled 70 infrastructure projects as part of its counter-strategy. European Commission President Ursula von der Leyen pledged €300 billion over five years to support infrastructure in developing countries.

India actively opposes the BRI, warning that it aims to dominate Asia by trapping neighbors in debt and undermining their sovereignty. India seeks to position itself as a regional alternative.

China’s reliance on Pakistan fuels Indian security concerns, particularly because the economic corridor passes near disputed Kashmir.

Japan, too, remains wary of China’s ambitions. Tokyo has committed over $300 billion in public and private funds for Asian infrastructure and partnered with India on the Asia-Africa Growth Corridor to link ports from Myanmar to East Africa.

Strategic Goals

China has spent roughly $1 trillion on the BRI so far, with forecasts suggesting total costs may reach $8 trillion. The initiative is driven by multiple goals, notably the need to offload industrial overcapacity. China produces 1.1 billion tons of steel annually but consumes only 800 million domestically.

Since the 1990s, China has relied on industry and exports to grow its economy. To maintain momentum, it must create secure, diversified trade routes.

Currently, most Chinese trade flows through the Malacca Strait near Singapore, a US ally. Reviving and upgrading the Silk Road offers Beijing safer access to global markets.

The BRI also aims to reposition China at the center of global trade, boosting household incomes and lifting more citizens out of poverty.

Additionally, the initiative secures long-term energy supplies from the Middle East and Central Asia, supporting China’s industrial expansion. It also facilitates economic restructuring, wage growth, and internationalization of the renminbi.

Access to vast mineral wealth in the Middle East and Africa, such as copper-rich Democratic Republic of Congo, further motivates the initiative. China controls over 80% of copper mines in the country.

Strategically, the BRI supports China’s global ambitions. It enables military expansion such as the overseas base in Djibouti and consolidates influence via debt-based diplomacy, as seen in Sri Lanka, where China leased the Hambantota port for 99 years after Colombo failed to repay loans.

Even when debts are repaid, recipient countries often align with China in international forums, supporting its positions on Taiwan and Uyghur issues.

Future Prospects

Despite its ambitions, the BRI faces significant pushback. China’s lending practices have drawn criticism for fostering debt dependency and undermining sovereignty.

While China markets the BRI as a “win-win” partnership, critics argue it burdens poor countries with unsustainable loans aimed at securing Chinese geopolitical interests.

As of last year, Chinese construction contracts under the BRI totaled $2 trillion comparable to the size of the Russian or Canadian economy with actual sales reaching $1.3 trillion.

According to Beijing, the Export-Import Bank of China holds BRI-related loans worth 2.2 trillion yuan ($307.4 billion) across 130 countries, averaging $2.4 billion per country. Many African governments have sought loan deferments or relief.

Projects in low-income countries have also fueled corruption and democratic backsliding, drawing ire from civil societies.

Consequently, Chinese investment in Europe has dropped to its lowest since 2010, reaching €6.8 billion last year. Mergers and acquisitions have also declined in Africa.

Some governments are now canceling or delaying BRI projects including railways, ports, and trade zones due to financing disputes, land rights, labor concerns, and technology issues.

Others have questioned the projects’ cost-effectiveness, as seen in Laos, Kyrgyzstan, Uzbekistan, and Malaysia. Environmental concerns further fuel opposition, despite China’s 2021 pledge to stop building overseas coal-fired power plants.

Despite opposition from the US and parts of Europe, the BRI could still spur global economic growth. Yet, caution is warranted regarding China’s expansionist policies.

Trade routes whether by land, air or sea have constituted the cornerstone of human life since antiquity. For centuries, the majority of global commerce traversed the Silk Road, the Incense Route, the Amber Road, the Horse and Tea Route, and the Amber Route whoever held control over them possessed the keys to geopolitical influence and power, which explains the magnitude of the wars and conflicts revolving around them.

Major powers seek, by controlling trade corridors and routes, to reap political, economic and military gains across the domains of technology, commerce, regional and global influence. In recent years, various projects have emerged in this context, such as the “Belt and Road Initiative”, the “Economic Corridor” and the “Path of Development”.

Given the significance of these trade paths and their role in reshaping political alliances and economic interests, we dedicate this dossier, entitled “Gateways of Influence”, to tracking the most prominent of these corridors, their importance to key actors, their impact on competitors, and their outcomes in the trade balance and on the political stage.

Global Trade

Over the last five years, global supply chains have faced many difficulties first triggered by the COVID‑19 pandemic, which forced countries to close their borders and adopt protectionist measures; and secondly, by the Russian‑Ukrainian war which threatened global energy security.

As a consequence, the global economy declined and trade slowed: in 2023 world trade grew by only 0.2%, the slowest rate in fifty years. This had negative consequences for people’s living standards around the world.

Yet the outlook from major international institutions, including the World Trade Organization (WTO), appeared brighter for 2024, with some estimates forecasting global trade growth of 2.7 % to 3.5%. However, these institutions later revised their expectations downward again due to the impact of the war in Israel and Gaza.

The brutal war has disrupted supply chains across the Red Sea particularly the Bab el‑Mandeb Strait and further pressure is expected on global and regional economies if the Israeli war in Gaza continues, according to the WTO Director‑General Ngozi Okonjo‑Iweala.

In response to the Israeli atrocities against Palestinians, the Houthis in Yemen began targeting commercial vessels in the Red Sea and the Arabian Sea linked to the Israeli entity, which resulted in disruptions of global trade via the Bab el‑Mandeb strait and the Suez Canal.

According to reports from the International Monetary Fund (IMF), shipping costs through the Bab el‑Mandeb rose by as much as 170 % as a result of Houthi attacks; this tension caused commercial ships bound for Europe to reroute via the Cape of Good Hope in southern Africa, increasing delivery times by an average of 10 or more days.

The disruptions were not confined to the Red Sea and Arabian Sea: the Black Sea was also affected by the ongoing Russia‑Ukraine conflict, and the Panama Canal suffered from drought and low water levels in Lake Gatun, which it relies upon that canal handles about 5 % of global trade.

Similarly, the South China Sea is drawn in, due to periodic Chinese‑Philippine skirmishes over the Second Thomas Shoal in the larger dispute between Manila and Beijing.

These facts underscore the importance of trade corridors and routes in the global economy: when they are stable, the economy by extension enjoys a measure of stability. Consequently, major powers and regional actors have adopted strategies to safeguard these vital arteries of trade, ensure smooth and secure flow of global commerce and supply‑chains, and prevent any strike or disruption that might upset the functioning of these routes thereby bolstering economic and political stability internationally.

Even if military force is required. Recently, the United States dispatched additional military reinforcements to the Red Sea, while simultaneously launching a multinational operation to protect commerce there, following a series of missile attacks by the Houthis on vessels linked to Israel.

The Importance of Trade Corridors

Maritime straits and trade routes in general are the lifeblood of global commerce and economy any threat to their security directly affects the national security of all countries, because of their major influence on the flow of global trade and supply chains.

The security of trade corridors intersects with many dimensions of national and global security, most importantly: energy security, food security—which explains the interest of major powers. It is only logical that every major power focuses its attention on those corridors in order to secure them in a way that protects its interests and the interests of its allies.

According to data from the International Maritime Organization (IMO), 90 % of goods traded globally are shipped by sea, and maritime routes account for 61 % of global petroleum and other liquid‑fuel production — equivalent to some 58.9 million barrels per day.
In the context of competition and conflict, some powers have felt compelled to build new trade routes that would render them less reliant on their rivals’ corridors. These efforts have been driven by countries such as the United States, China, the European Union, Turkey, India, Russia and certain Arab states like Iraq.

The Key Actors

United States

The United States remains the foremost active player in the sphere of trade corridors, even though the corridors do not necessarily run through its territory. It invests heavily in them to guarantee its international influence and control over global commerce.

The U.S. deploys troops and military hardware around the world to secure control of these routes. For instance, it safeguards the Suez Canal via the U.S. Sixth Fleet in the Mediterranean and through its dense military, naval and air bases across the eastern Mediterranean in Greece, Turkey, Cyprus and Eastern Europe. It is also involved in NATO operations to continually monitor maritime corridors in the Mediterranean.

Washington also leads the Combined Maritime Forces (CMF) from Bahrain home to the U.S. Fifth Fleet seeking to secure freedom of navigation in the Red Sea and the Arabian Sea, which include the Bab el‑Mandeb strait, one of the world’s most important sea routes for global goods shipments particularly crude oil and fuel.

The U.S.’s control isn’t limited to just maritime corridors; it extends to corridors that run across allied territories, as it perceives freedom of movement through these passages as vital national‑security interests. Safeguarding these corridors is fundamental to its global role one typically performed by a dominant power.

Recently, Washington felt that its dominance over the world’s main trade corridors was threatened by regional and international powers establishing alternate routes so it initiated its own new corridors to demonstrate its strength and control.

China

China is the United States’ foremost competitor in nearly every field, including trade corridors. In 2013 Beijing launched the “Belt and Road Initiative” (BRI) also called the New Silk Road referencing the old Silk Road linking central, eastern, southern and south‑east Asia with the Middle East, east Africa and southern Europe.

Chinese authorities say they have signed cooperation documents under the BRI with more than 150 countries and over 30 international organizations; the initiative includes building ports, airports, roads, railways and industrial zones, making it the largest infrastructure project in human history.

This project represents China’s most prominent means of projecting economic and geopolitical influence: Beijing desires to become a global power surpassing the U.S., and views controlling a new trade corridor of global commerce as a prime means to that end.

Thanks to the Belt & Road, China has already increased its political and commercial ties with Middle Eastern, African and European nations, and its influence worldwide has grown markedly. It is expected to further strengthen over time.

Iran

For its part, Iran places special importance on international trade corridors due to its strategic location and the advantages this grants. It borders 15 countries, facilitating access to Central Asian, Caucasus and Persian‑Gulf markets. Geographically, it lies at the intersection of three continents (Asia, Europe and Africa) and is a nexus connecting north, south, east and west.

Iran’s advantage is not only geographic: it also possesses vast energy reserves and access to northern and southern energy sources, as well as territorial waters covering long distances and possessing numerous large ports and land/rail transport networks extending into neighbouring states.

Amid Western economic sanctions, Tehran sees transit operations as a viable alternative to oil revenues, so it is working to activate all transit routes crossing its territory—more than five international corridors currently pass through it.
Today, Iran is a major player in several emerging international corridors, including the Silk Road initiated by China in 2013, the North–South Corridor linking India and Russia, the TRACECA corridor (which connects Central Asia and Europe), among others still partly undeveloped.

Iran’s control of the Hormuz Strait located between Oman and Iran, linking the Persian Gulf with the Gulf of Oman and the Arabian Sea provides it with major leverage. In 2022, average oil flow through that strait was 21 million barrels per day, representing some 21 % of global liquid‑fuel consumption, according to the U.S. Energy Information Administration (EIA). The strait is also a key route for transporting basic commodities such as grains, iron ore and cement.

Iran exploits these features to break out of international isolation and revive its economy, thereby creating significant political, economic and trade weight at a time when Western sanctions are intensifying.

European Union

Historically, European states controlled the majority of the world’s trade corridors, but their role has receded since World War II in favor of the United States and other international and regional powers like China.
Today, the European Union oversees joint patrols in the Mediterranean to secure transit of commercial ships and leads Operation “Active Endeavour” (launched 2003), which comprises specific measures that allow naval forces to board various vessels, including civilian ones.

Although most goods and merchandise still flow toward Europe, European states are at best participants in most corridors they do not dominate or control them because of their inability to form a unified stance and their diverging interests, making them vulnerable to threats in their own geographic heartlands.

Egypt

Egypt derives its significance from the importance of the Suez Canal opened in 1869 which holds a strategic place in maritime shipping. The canal is one of the world’s most important waterways and the shortest shipping route between Europe and Asia, stretching 193 kilometers from Port Said to Suez the longest artificial waterway in the world.

The canal facilitates between 10 % and 15 % of international maritime trade and constitutes a vital source of foreign currency revenue for Egypt. In fiscal year 2022‑2023, its revenues reached $9.4 billion the highest annual figure recorded, marking around a 35 % increase from the previous year.

Fearing the ongoing regional tensions and disruptions in the area, major powers such as the United States and the European Union have sought alternate, more secure trade corridors. Egypt, however, remains skeptical of those efforts and maintains that no commercial route can truly rival the Suez Canal.

Turkey

Turkey is a formidable player on the global trade‑corridor map: the so‑called “Middle Corridor” between China and Europe traverses it, and is one of the six major corridors of China’s Belt & Road. This corridor gained prominence following Russia’s war against Ukraine, as the northern route via Russia lost much of its importance for shipping goods from China to Europe.

The Middle Corridor through Turkey offers the shortest distance, lowest time and cost compared to the northern and southern routes. Yet the Caspian Sea remains a natural barrier to this path, meaning Turkey and its allies still need to make substantial new investments to enhance its viability.

Turkey is also working to revive the Zangezur Corridor linking it to Azerbaijan via Armenia if opened, this corridor could make Turkey a major logistical hub in Eurasia and a central actor in global trade traversing the Eurasian landmass.

Ankara is keen to join most of the region’s trade corridors, recognizing their importance in bolstering its regional influence; it leverages its unique geography, its developed maritime/land/air transport network and its significant production capabilities.

India

A relatively new actor competing in global trade corridors is India, whom the United States is eager to draw into its camp in its ongoing contest with China.
India leads the International North–South Transport Corridor (INSTC) created under the agreement signed by Russia, Iran and India on September 12, 2000 subsequently joined by ten other countries, including Azerbaijan and Turkey.

About a year ago, Washington and New Delhi announced a new corridor project starting from Mumbai in India and linking the Middle East with Europe. The aim is to increase trade, secure energy supplies and improve digital connectivity; alongside India and the United States, France, Germany, Italy, Saudi Arabia and the UAE signed the agreement.

If implemented, this route would shorten trade between India and Europe by 40 %, giving it major significance in the global trade‑corridor map, advancing India’s influence and providing it with additional leverage.

Iraq

Iraq aspires to become an important player in the global trade‑corridor map; historically it was a hub for international land trade from the heart of Europe to Gulf markets and Asia via the sea, and vice versa.

Iraq hopes to reclaim its past glory as an ideal trade‑attraction point, which explains its drive to implement giant cross‑border trade projects, open up to open markets, integrate into the global economy, and expand the services sector.

Iraq is currently promoting a trade‑corridor project called the “Path of Development,” which will include the Grand Faw Port, highways, railroads and energy‑transmission lines stretching from southernmost Iraq to the Turkish border at F Ishkhabur, at a cost of $17 billion. The project is planned in three phases: the first ends in 2028, the second in 2033, and the third in 2050.

Russia

Among the most prominent actors in the trade‑corridor file is Russia, through which the North–South Corridor passes, allowing Moscow permanent access to warm waters via a network of land routes, railroads and maritime shipping lines.

This corridor has strengthened relations between Russia, Iran, India and the nations of Central Asia and the Caucasus: the link passes through Iranian territory between Russia’s northern city and port of Saint Petersburg and India’s financial and commercial capital Mumbai.

Faced with Western sanctions, Russia has launched two new trade‑routes linking Asia and Europe, in an effort to undermine these sanctions. It is therefore deepening alliances with China, Iran, Turkey and, to a lesser degree, India which appears to have aligned with the West.

As a result of states’ interest in building giant projects by leveraging borders and corridors for their economic, political and security interests, many inter‑regional and global conflicts have emerged. This helps explain why many of these projects have been disrupted, albeit simultaneously they offered opportunities to open up new horizons and gateways for economic prosperity and geopolitical balance worldwide.

The young Algerian revolutionary Mohamed Boudia believed deeply in his people’s right to self‑determination, free from French colonial rule. He joined the resistance at an early age and led the Algerian National Liberation Front’s Paris cell, which carried out numerous operations against colonial interests. When Algeria finally won its independence, he returned to his first love: theater.

Algeria was liberated, but he did not lay down his arms. Boudia was an internationalist revolutionary committed to struggles for liberation chief among them what he viewed as humanity’s central cause: Palestine. He decided to join the Palestinian struggle with his weapon, his pen, and his exceptional skills in planning clandestine operations.

His mastery of theater helped him craft elaborate disguises to evade Israeli intelligence and the French security services, which pursued him for years. Eventually, Mossad succeeded in assassinating him as part of Operation “Wrath of God” on the morning of June 28, 1973, in Paris. Yet despite his assassination, his legacy endures in the causes of Palestine, Algeria, and global liberation movements.

Mohamed Boudia: The Revolutionary Maker

On February 24, 1932, in the Bab El Jedid quarter of the upper Casbah of Algiers, a child named Mohamed was born into the Boudia family. He grew up in the historic streets and schools of the Casbah and joined the Algerian Muslim Scouts.

During his school years, Boudia developed a passion for theater. At 22, he enrolled in the Regional Center for Dramatic Arts to hone his talent. He possessed a commanding eloquence, strong powers of persuasion, and notable talent in expression and writing.

His theatrical work in Algeria did not last long. He was conscripted into military service first in Algiers and later in Dijon, France under the compulsory draft imposed on Algerians since 1912. But in France, fate led him to meet an Algerian theater troupe in Dijon and, through them, Algerians active in the struggle for independence from a colonial power that had violated land, dignity, and wealth.

Boudia wanted to serve his country through the art he loved. He wrote plays celebrating resistance and denouncing occupation, works intended to stir people to revolt against colonial repression. He had lived through colonial brutality and was deeply marked by the massacres of May 8, 1945.

He believed passionately in the role of culture and theater in liberating his country. He used his pen and voice to lay the groundwork for a “theater of resistance.” For him, culture was synonymous with freedom, and theater an extension of the national struggle. Once independence was achieved, he believed theater should become a social and political instrument of liberation.

But the outbreak of the armed Algerian Revolution in late 1954 drew him into the clandestine ranks of the National Liberation Front (FLN), which had decided to bring the war to France. He quickly became head of the FLN’s Paris cell, which oversaw several operations in France between 1957 and 1958, including the August 25, 1958 bombing of oil pipelines near Marseille.

A few weeks later, French authorities arrested Boudia and sentenced him to 20 years of hard labor. However, on September 10, 1961, he escaped from Angers prison with the help of French anti‑colonial activists and fled to newly independent Tunisia.

The Beginning of a New Struggle

Months after his escape, Algeria gained independence. But the internationalist revolutionary Mohamed Boudia believed liberation would remain incomplete until all occupied lands were freed especially Palestine, which he saw as the foremost cause after its occupation by Israel with Western support.

Boudia’s connection to the Palestinian cause began in Cuba, where he met Wadie Haddad, also known as Abu Hani, the head of external operations for the Popular Front for the Liberation of Palestine (PFLP). That meeting strengthened his conviction that his experience should be placed at the service of the Palestinian struggle.

This period coincided with the Arab defeat of June 1967, when Israel waged a six‑day war against Egypt, Syria, and Jordan, leading to vast territorial losses and the destruction of most Arab military assets.

Boudia wrote extensively on Palestine, driven by the fervor he carried from his years with the FLN and from political theater. He leveraged his wide network of artists, intellectuals, and political figures across Europe, the Arab world, and Latin America to promote awareness of the Palestinian cause.

Armed Struggle

After the Arab defeat, many revolutionaries shifted to armed resistance, expanding operations against Israeli targets abroad. Boudia embraced this path, convinced that rights are not granted but seized by force.

Wadie Haddad led an international coalition of armed groups known as the “External Operations Department.” In the early 1970s, Boudia was tasked with leading PFLP operations in Europe, following a short stay at Patrice Lumumba University in Moscow.

Boudia by then operating under the nom de guerre Abu Diya became the mastermind behind most PFLP operations and later Black September operations in Europe. These actions targeted Israeli interests in response to Israeli violence, international indifference, and to awaken the world’s conscience regarding Palestine.

He coordinated with several revolutionary groups, including the Japanese Red Army, Germany’s Baader‑Meinhof Group, Italy’s Red Brigades, and Spain’s ETA. He also recruited youth in support of the Palestinian struggle.

Among his operations was an attempt to send three East German women to Jerusalem to bomb Israeli targets, a plot that was uncovered. He also oversaw the bombing of the Shono Center in Austria, which processed Soviet Jewish migrants heading to Israel.

Boudia also supervised the bombing of Israeli warehouses and a petroleum refinery in Rotterdam, as well as the May 8, 1972 hijacking of an Israeli airliner at Lod Airport (Ben Gurion Airport), during which both militants and Israeli soldiers were killed in a failed rescue attempt.

He additionally oversaw the Japanese Red Army operation led by Kozo Okamoto targeting Israeli aircraft at Lod Airport, killing 26 people and injuring at least 80. He planned the August 5, 1972 explosion of a petroleum pipeline between Italy and Austria near Trieste, destroying nearly 250,000 tons of oil.

That same year, he hosted the Palestinian commandos responsible for the Munich operation, helping hide and eventually move them. The operation involved the capture of 11 Israeli athletes during the Munich Olympics and demands for the release of 236 Palestinian prisoners. The German security assault resulted in the death of all the hostages.

“The Man of 100 Faces”

Boudia supervised all these operations without leaving a trace. Reports from Mossad and Western intelligence services, including French and Swiss, indicated they were sure he was involved in planning attacks on Israeli interests and Mossad personnel, but they lacked evidence. He continued to work in theater openly and without raising suspicion.

According to a Swiss intelligence report, Boudia traveled through European capitals using numerous aliases and forged identities such as “Bertan Pierre,” “Bertan Roland,” “Boyer Maurice Andres,” “Rodrigue,” “Robert,” “Roger,” “Bethanchan,” as well as Arabic names like “Saeed Ben Ahmed,” “Abu Khalil,” and “Abu Khaled.”

He frequently changed residences in Paris to avoid leaving any trail that could lead those searching for the mastermind behind Palestinian operations in Europe—a skill he had refined during his time in the Algerian resistance and at Patrice Lumumba University.

The End of a Hero

For a long time, Mossad and Western intelligence believed multiple people were behind the operations targeting Israeli interests in Europe. Eventually, after exhaustive pursuit, they concluded it was the work of one man: Mohamed Boudia.

Mossad did not wait for definitive evidence. It decided to eliminate the Algerian revolutionary at the first opportunity as part of Operation “Wrath of God,” authorized by then‑Israeli Prime Minister Golda Meir and executed by the Kidon unit led by agent Michael Harari.

Their task was difficult Boudia had no stable residence and no consistent identity.

On the morning of June 28, 1973, Boudia prepared to leave an apartment he frequented in Paris’s Fifth District, dressed in his theatrical attire. He walked to his blue Renault 16 parked on Rue Fossés‑Saint‑Bernard. As he opened the door and touched the driver’s seat, a small explosive device hidden beneath it detonated.

He was killed instantly at 41, after spending more than half his life fighting for Algeria, Palestine, and global liberation movements.

Mossad succeeded in assassinating Mohamed Boudia that day, with assistance from French security elements. But it failed to halt the struggle for a just cause embraced by millions. After the martyrdom of the internationalist revolutionary, countless others carried the torch, and such resistance will not end until the Israeli occupation comes to an end.

On May 22, 1965, the Al-Majadi family welcomed a newborn they named Fawzi Abdul Rasoul, who was raised within the Arab tribe of Al-Sulbah one of the founding pillars of modern Kuwait and its coastal prosperity along the Arabian Gulf.

Barely two years after Fawzi’s birth, the Arab world suffered a major blow in the aftermath of the 1967 Six-Day War, which followed the Nakba of 1948.

Arab armies were defeated by Israel, and vast swathes of Palestinian, Egyptian, Syrian, and Lebanese lands fell under occupation including the West Bank, Gaza Strip, Egypt’s Sinai Peninsula, and Syria’s Golan Heights.

Israeli crimes against the local population only intensified, eventually igniting the Palestinian Intifada in 1987. On December 8 of that year, a popular uprising erupted after decades of oppression. It quickly evolved into a full-scale national movement encompassing all sectors of Palestinian society. Its primary weapon: stones.

Fawzi Al-Majadi

News of the Intifada reached the wider Arab world, including Fawzi Abdul Rasoul Al-Majadi, who closely followed developments in Palestine. According to his sister, he was deeply moved by the uprising and had adorned his room with slogans and posters supporting the Palestinian resistance.

Fawzi joined Kuwait’s Ministry of Interior early in his career, initially serving as a non-commissioned officer before shifting to a civilian role in the ministry’s financial department. Yet, he never intended to remain in government service for long his heart was set elsewhere.

He was deeply committed to supporting his Palestinian brethren. He had long been aware of their suffering and the brutal crimes inflicted upon them, aided by Western powers and met with silence by Arab leaders more concerned with preserving their seats of power than defending Palestine.

From a young age, Al-Majadi carried the burden of liberation, believing firmly in the Palestinian right to independence, to their stolen land, and to justice by any means necessary. He opposed the rush toward peace deals and advocated instead for armed resistance against the Israeli occupation.

Joining the Resistance

As the children of the Intifada faced bullets with stones, official Arab interest in the Palestinian cause waned. That same year, Palestine was conspicuously absent from the agenda of the Arab League summit held in Jordan. The Arab stance mirrored global indifference.

Many young Arabs felt compelled to act. Among them was Fawzi Al-Majadi, who joined the Democratic Front for the Liberation of Palestine (DFLP) a Marxist Palestinian political and military faction that is part of the Palestine Liberation Organization (PLO).

Fawzi first arrived in Palestine in 1988, but the visit was short-lived. His family urged him to return to Kuwait, especially as internal clashes erupted between DFLP members and Israeli forces in Lebanon, prompting most of the group’s fighters to relocate to Tunisia.

He returned home to Kuwait and reunited with his tribe, Al-Sulbah. But he could not reconcile a normal life with the continued massacre of Palestinians, whose blood stained the land while the world watched in silence.

In early 1989, Al-Majadi made his way back to Palestine. He rejoined the DFLP, which oversaw his training in various weapons over a three-month period in Naameh, south of Beirut. There, he received his nom de guerre: “Philip.”

Upon completing his military training, he formally requested to carry out a martyrdom operation inside the occupied Palestinian territories at a time when such missions against Israeli forces were on the rise.

The DFLP primarily limited its operations to targets within occupied territory, believing that attacks abroad harmed the Palestinian cause by branding fighters as terrorists rather than freedom fighters.

Given his discipline and unwavering commitment, Al-Majadi’s request was approved. He was selected for a high-risk operation alongside fellow fighters Ahmad Hussein Hassan and Riyad Al-Sabbouji.

Their training intensified as they prepared for the mission. For Fawzi, martyrdom and meeting his Creator seemed close at hand.

The Martyrs of Nablus Operation

Fawzi Abdul Rasoul Al-Majadi could not rest while Palestinian children were slaughtered. He longed for the operation that might bring justice even if it cost him his life.

On June 4, 1989 during the holy month of Ramadan he and his comrades set out for their mission: a daring strike on the Misgav Am settlement in Upper Galilee near the Lebanese border. Their goal: to engage Israeli soldiers and inflict as many losses as possible.

Relying on sheer faith and determination, the trio crossed from Naameh into southern Lebanon, navigating a dangerous route filled with outposts of the South Lebanon Army led by Antoine Lahad.

Evading detection, they infiltrated northern Palestine and reached the entrance of the Zar’it settlement, where they engaged heavily armed Israeli forces. In the ensuing firefight, they killed or wounded 12 Israeli soldiers.

The fighters succeeded in breaching the settlement and capturing two Israeli soldiers, demanding safe passage in exchange. The Israeli military refused and sent in reinforcements.

After a fierce battle lasting over two hours with Israeli forces and South Lebanon Army units, the three resistance fighters were martyred, their blood soaking the sacred soil of Palestine.

The Martyr Returns Home

Israel held Fawzi Al-Majadi’s remains for over 19 years, finally returning them to his family in 2008 as part of a prisoner exchange between Hezbollah and the Israeli government.

In that deal, Israel released Lebanese prisoner Samir Kuntar (held since 1979) along with four others captured during the 2006 Lebanon War. Additionally, it handed over the remains of 199 Palestinian, Lebanese, and Arab martyrs. In return, Hezbollah provided the bodies of two Israeli soldiers killed in 2006.

Al-Majadi was laid to rest in Sulaibikhat Cemetery, carried on the shoulders of mourners. His life journey from Kuwait to Lebanon and finally Palestine told the story of a man who believed deeply in the justice of the Palestinian cause and sought martyrdom in its name.

Fawzi Al-Majadi and his fellow fighters showed that the road to liberating Palestine runs through sacrifice and resistance not empty agreements and fleeting diplomacy.

In the early hours of Saturday, October 7, 2023, fighters from the al-Qassam Brigades the military wing of Hamas crossed the skies above Israeli settlements surrounding Gaza using rudimentary paragliders in an operation dubbed the “Al-Aqsa Flood.”

This striking image of human-powered aircraft equipped with simple wheels and propellers evoked a scene from 36 years earlier, when two Arab men affiliated with the Popular Front for the Liberation of Palestine General Command (PFLP-GC) launched a similar attack.

Using gliders from near the Lebanese-Israeli border, one of the men infiltrated an Israeli military base, killing and injuring several soldiers.

That operation was led by Syrian fighter Khaled Mohammad Akra from Aleppo. It was carried out in response to the 1953 Qibya massacre. Akra had joined the Palestinian resistance in Lebanon at the age of 14 and died a martyr as he glided toward Palestine in a traditional hang glider.

Khaled Akra

Born in 1967, Syrian national Khaled Mohammad Akra believed that armed struggle was the only path to liberating Palestine. In 1983, driven by this conviction, he joined the Palestinian resistance, hoping to support his Palestinian brethren in the face of an Israeli occupation that had seized land and violated dignity with impunity before Arab leaders.

Akra aligned himself with the Popular Front for the Liberation of Palestine General Command, a leftist, nationalist Palestinian faction that broke away from the main PFLP on April 24, 1968, establishing its leadership headquarters in Damascus.

Akra who later took the nom de guerre Abu Rami was drawn to the faction because of its pan-Arab character; its ranks included fighters from across the Arab world, with some even rising to leadership positions.

The group emphasized that its struggle was part of a global fight against colonialism, racism, and terror targeting oppressed peoples.

He received his military training in Naameh, southern Lebanon, where he learned to carry and use weapons, holding onto the hope that one day he would be selected for a fedayeen operation against the Israeli occupation, either inside the occupied territories or abroad.

At the time, the PFLP-GC had conducted several such attacks targeting Israeli interests both within and outside of Palestine.

A Unique Operation

After months of training and an unrelenting desire to be martyred for Palestine, Akra was selected to lead a four-man fedayeen unit that included himself, Tunisian fighter Miloud bin Naja Nouma, and two Palestinians. Their mission: to carry out a bold assault against Israeli soldiers. Akra was just 20 years old.

Unlike previous operations that typically involved crossing land borders, this mission would breach Israeli territory from the sky an unprecedented tactic aimed at bypassing the fortified border fence, which made land incursions nearly impossible.

Late on November 25, 1987, the team prepared their gliders. However, the two Palestinian fighters were forced to land back in Lebanon due to technical issues, while the Syrian and Tunisian continued their flight. High hopes rested on their shoulders within the leadership of the PFLP-GC.

With red-and-white wings, the oversized gliders powered by small engines and fans no larger than a lawn mower took off across the northern border of occupied Palestine. Onboard were Arab fighters who had dedicated their lives to the Palestinian cause.

Israeli soldiers heard the buzz of engines overhead and issued alerts to military bases and civilian centers in the north. Helicopters equipped with searchlights were deployed but found nothing the gliders were flying low, just above the treetops that blanketed the area.

Akra successfully crossed the buffer zone, which ranged between 5 and 12 miles wide in the south, and landed in a field of grass and thorns near the settlement of Kiryat Shmona in northern occupied Palestine.

Armed with a Soviet-made Kalashnikov rifle, a silenced pistol, and grenades strapped to his body, he ran roughly 200 meters to Gibor military base, home to elite Israeli special forces.

Spotting an Israeli military truck, Akra opened fire, killing the driver and injuring a female soldier. He then infiltrated the base with ease, passing an armed guard who fled upon hearing gunfire.

Once inside, the Syrian fighter unleashed a barrage from his assault rifle and threw grenades into tents crowded with Israeli troops. He killed five more soldiers and wounded six others, catching the entire base by surprise.

The clash lasted over an hour, prompting Israeli soldiers to call for reinforcements. Helicopters, flares, and tracer rounds lit up the battlefield until the young fighter from Aleppo, Khaled Mohammad Akra, was killed by Israeli machine-gun fire.

An Israeli Shockwave

The attack left widespread destruction: three barracks were demolished, five tents burned, and more than six vehicles destroyed. Casualties littered the base and its entrances. It was the deadliest Palestinian assault inside occupied territory since March 1978, when 11 Palestinian fighters killed 37 Israelis and injured 82 others after hijacking a bus.

The Israeli military faced sharp criticism in the aftermath. Despite heightened alert levels, it had failed to take necessary precautions, according to Israeli media. The sentry at the base gate, rather than engaging the attacker, had fled in fear.

Israeli outlets also revealed that many of the soldiers killed or wounded were playing backgammon and checkers when the Arab fighters stormed the base, highlighting a significant military failure.

The operation shattered the myth of Israeli military invincibility. Gibor was assumed to be a heavily fortified military complex yet it was exposed as vulnerable to even a single determined fighter.

Israel was stunned that one Arab fighter could inflict such damage. The incident rekindled old fears that Palestinian armed groups might still pose a cross-border threat, despite years of perceived calm.

The next day, numerous Israeli businesses and institutions shuttered. Residents were told to shelter in place, and commando units were dispatched to search for any additional infiltrators.

To deflect public outrage, Israeli authorities blamed the base’s guard. He was sentenced to three years in prison for cowardice a scapegoat in what came to be known as the “Shin-Gimel Syndrome,” a term describing the tendency to punish lower-ranking individuals to shield senior commanders from accountability.

The Night of the Gliders

The glider attack proved a bitter disappointment for Israel. Two fighters from the Palestinian resistance had struck a base housing some of Israel’s most elite forces using no more than modified paper-thin gliders equipped with propellers and lawn mower engines.

The operation also served as a morale boost for the Palestinian national movement. Just days later, the First Intifada known as the “Children of the Stones” uprising erupted and continued until 1992, culminating in negotiations between the PLO and Israel that led to the Oslo Accords in 1993.

The glider mission stands as a testament to the Palestinian struggle against occupation and a reminder of Arab solidarity with a cause long neglected by the international community and Arab leadership alike.