Will Egypt seize Libya for its oil?

Financial Post
Oct 5, 2012 11:45 PM

Will Egypt seize Libya for its oil? Given Egypt’s political ideology, its history with its neighbours, and its material needs, this must be a live issue.

First, Egypt’s needs. Since the Arab Spring began almost two years ago, the Egyptian economy has been collapsing. Egypt’s foreign currency reserves have more than halved and many expect the Egyptian pound, already at its lowest point in eight years, to be devalued. Discontent is widespread. According to Gulf News, “In the past three months, Egypt has experienced increased power cuts that sometimes last for hours, while a fuel and diesel crisis has at times paralyzed the country, with mile-long queues forming outside petrol stations.” The black market price for gas canisters is 10 times higher than the official selling price; for bread it’s five times higher.


The Muslim Brotherhood government desperately needs a $4.8-billion IMF bailout to stop the bleeding but it refuses to curtail its subsidies, as the IMF demands, for fear of triggering a popular revolt. It is instead hoping for aid from oil states and the U.S. government, but even if this materializes, it will be at best a stopgap. With tourists, the country’s chief source of foreign exchange, steering clear of Egypt because of its anti-Western riots, and with foreign investors equally fearful of venturing into the country, Egypt’s options are daily becoming more limited. The temptation to look next door to Libya could be irresistible, particularly since Egypt views union with Libya as inevitable.

Unlike most of the world, where nationalist sentiments run deep, pride of country is a largely alien notion in the clan-oriented Arab Middle East. Since the 1950s, Arab rulers have made at least 10 attempts to merge their countries together, all but one of them (the United Arab Emirates) short-lived failures that collapsed in five years or less. Among others, Egypt attempted a union with Libya in 1972 and two with Syria in 1958 and 1976; it attempted federations with Libya and Sudan in 1969 and with Libya and Syria in 1971. If plebiscites taken at the time to ratify the new countries are to be believed, these pan-Arabic arrangements tended to be wildly popular at the outset, the peoples of the region quick to embrace new flags and to unsentimentally discard old ones in the name of Arab solidarity.

The lack of national allegiance is all the more striking because Arab governments in the decades following the Second World War were predominantly secular, often military dictatorships that overthrew monarchies and kept the Muslim Brotherhood and other religious zealots at bay. Today the religious zealots are ascendant. And their ideology eschews national borders in favour of a caliphate across the Arab world and beyond.

“We are seeing the dream of the Islamic Caliphate coming true at the hands of Mohammed Morsi,” cleric Safwat Higazy enthused earlier this year at a Morsi political rally.

Following the Arab Spring, the Muslim Brotherhood not only rules Egypt, through its affiliates it controls neighbouring Gaza and part of Syria to the north and may be close to seizing power in Jordan. Across the north coast of Africa to the west, with one exception, Muslim Brotherhood groups control Tunisia and Morocco while its Algerian wing, not yet in power, warns of revolution. The one exception is Libya, an immediate neighbour, where the Muslim Brotherhood lost the electoral contest but not the war. An anatomy of the Sept. 11 terrorist attack on the American consulate in Benghazi points to troubling Egyptian involvement.

The Libyan organization believed to have masterminded the attack, the Jamal Network, was set up by Muhammad Jamal Abu Ahmad, an Egyptian released by the Egyptian government following the Arab Spring. Ahmad, in turn, is affiliated with al-Qaeda and its Egyptian leader, Ayman al-Zawahiri, who prior to the Sept. 11 attack had called for revenge for the death of a Libyan member of al-Qaeda. Egypt’s president Morsi himself, on the eve of his inauguration as president of Egypt, announced, “I will do everything in my power to secure freedom for … detainees, including Sheikh Omar Abdul Rahman,” the “blind sheik” responsible for the 1993 World Trade Center bombing.

Egypt’s government, it is clear, does not eschew associations with terrorists and it cannot be pleased that Libya, its nearest Arab Spring neighbour, has escaped Muslim Brotherhood control. In 1977, Egypt and Libya engaged in war motivated, claimed Libya, by Egyptian designs on Libya’s oil. If a new Arab union ever emerges in the form of an Islamic Caliphate, as Morsi wants, Libya’s oil would be at its disposal. Morsi and others may be wondering, though, why wait?

Lawrence Solomon is executive director of Energy Probe. You can reach him at: LawrenceSolomon@nextcity.com