The ongoing conflict known as “Iron Swords” has caused significant disruptions not only in the countries directly involved but also on global trade routes. Egypt, in particular, has been severely affected by this war, which comes at a time when the country is already grappling with economic challenges.
The crisis caused by the Houthis in the Red Sea has resulted in a dramatic drop in traffic in the Suez Canal. In the first two weeks of the year, traffic decreased by 64% compared to the same period last year, resulting in a 47% decline in revenue for Egypt. This financial impact is particularly significant for a country that is already struggling with debt and inflation.
In response to this crisis, Egypt has asked the Houthis to focus their attacks only against Israel and not on other shipping giants. However, despite these efforts, damage to the Suez Canal continued to mount as more ships were targeted by Houthi forces.
Egypt’s debt crisis has been worsening over recent years, with credit rating companies downgrading its credit image due to this crisis and other economic factors. As a result, Egypt is seeking additional aid funds from international institutions such as the International Monetary Fund (IMF). However, these efforts have been met with resistance after last year’s aid package was stopped because Egypt did not carry out necessary reform measures.
Overall, “Iron Swords” has put Egypt in an extremely difficult position, exacerbating its existing economic challenges and making it even harder for the country to recover.