Egypt and Saudi Arabia are natural rivals for leadership in the Arab world. Egypt is the most populous of the Arab states, and Saudi Arabi the most prosperous. Relatiosn over the years have oscilated between close cooperation and overt conflict and warfare. Saudi Arabia and Egypt share concerns over Iran's activities.
The Free Officers came to power in February 1954. Several Arab governments viewed Nasser with little enthusiasm. The conservative monarchies of Saudi Arabia and Jordan saw his ideas as a potential threat to their own power. Nasser regarded these monarchs as reactionaries and as obstacles to Arab unity.
In 1962 a military coup overthrew the royalist government in Yemen. Nasser intervened to support the new republican government against the Saudi Arabia-backed royalists, who were attempting to regain control. This undertaking proved to be a great drain on Egypt's financial and military resources. At the height of its involvement, Egypt had 75,000 troops in Yemen. Egypt's intervention also increased inter-Arab tensions, especially between Saudi Arabia and Egypt. Egypt's defeat at the hands of Israel in the June 1967 War obliged it to withdraw its forces from Yemen and to seek peace.
After the June 1967 War a summit conference was held in Khartoum in September 1967. At that meeting, Nasser and Faisal came to an agreement: Nasser would stop his attempts to destabilize the Saudi regime, and in return Saudi Arabia would give Egypt the financial aid needed to rebuild its army and retake the territory lost to Israel. At the conference, the Arab leaders were united in their opposition to Israel and proclaimed what became known as "the three no's" of the Khartoum summit: no peace with Israel, no negotiations, no recognition. A settlement of the war in Yemen was achieved at the conference in Khartoum in 1967.
In 1975 Egypt, Qatar, Saudi Arabia, and the United Arab Emirates founded the Arab Organization for Industrialization (AOI) and capitalized the new organization with more than US$1 billion. These countries set up the AOI to establish an Arab defense industry by combining Egypt's managerial ability and industrial labor force with the Arab countries' oil money and foreign technology. The bulk of the arms manufacturing was intended to take place in Egypt. But the AOI foundered before it could become a major arms producer because the Arab states broke relations with Egypt over Sadat's peace initiatives with Israel.
The 1979 Camp David Accords made Sadat a hero in Europe and the United States. The reaction in Egypt was generally favorable, but there was opposition from the left and from the Muslim Brotherhood. In the Arab world, Sadat was almost universally condemned. Only Sudan issued an ambivalent statement of support. The Arab states suspended all official aid and severed diplomatic relations. Egypt was expelled from the Arab League, which it was instrumental in founding, and from other Arab institutions. Saudi Arabia withdrew the funds it had promised for Egypt's purchase of American fighter aircraft.
The major event affecting Egypt's relations with the Arab world and the broader international sphere was clearly its decision to side with Saudi Arabia and the United States in opposing Iraq's invasion of Kuwait on August 2, 1990. On January 24, 1991, Mubarak stated that he had made twenty-six unavailing appeals to Saddam Husayn and had eventually sent a force of 35,000 Egyptians to Saudi Arabia in conformity with the provisions of the Arab Mutual Defense Pact signed in 1950. The actual war costs of sending about 35,000 Egyptian armed forces personnel to Saudi Arabia and provisioning them were substantial. Saudi Arabia, which in December 1990 promised US$1 .5 billion, and Kuwait, together with several European Economic Community (EEC) member nations, had agreed to contribute to these costs and to the losses incurred by Egypt's economy, but funds were slow in arriving. As time passed, Egypt became disillusioned by the responses of Kuwait, particularly, and, to a lesser extent, Saudi Arabia to Egypt's offers of manpower assistance.
Saudi Arabia and other Gulf Arab monarchies provided billions of dollars in aid to Egypt to stave off economic collapse since Sissi, then army chief, ousted Islamist president Mohamed Morsi and outlawed his Muslim Brotherhood. Like Egypt, Saudi Arabia has branded the Brotherhood a terrorist organization, viewing its Islamist doctrines as a threat to Saudi dynastic rule. During King Salman's visit in April 2016, the Saudi and Egyptian leaders signed a series of multi-million dollar deals including one that officially gave Saudi Arabia control of two uninhabited islands in the Straights of Tiran. Saudi Arabia had always been a key backer of Egypt, but the support for the nation increased greatly since the military's 2013 ouster of former president Mohammed Morsi.
President Abdel Fattah el-Sissi was obliged to continue his crackdown on the Muslim Brotherhood by his Saudi and UAE backers, who had also outlawed the organization. Riyadh’s strong support of Egyptian President Abdel-Fattah el-Sissi remained a thorn in relations with Ankara. Erdogan strongly backed the deposed Egyptian president Mohamed Morsi and is a staunch critic of Sissi. Egyptian-Turkish relations simply boil down to the Muslim Brotherhood. Egypt would support any kind of action that will get rid of that mentality. Egypt and Turkey will continue to deteriorate, analysts say, as long as both countries maintain their stances on Islamist politics. Turkey, which supports the Muslim Brotherhood, was allied with Morsi and continued to bate Sissi, even after he was formally elected in 2014, calling his initial ascension to power the product of a “coup,” not a popular “revolution” as Egyptian government supporters insist.
Saudi King Salman visited Cairo in the spring of 2016, while relations between the neighboring countries were still cordial, signing several trade agreements, as well as an agreement to build a bridge across the Red Sea.
Political tensions between Egypt and Saudi Arabia have been running high since late 2016, after an Egyptian vote in the U.N. Security Council opposing Saudi policy in Syria. Riyadh eventually suspended a fuel delivery agreement with Cairo to show its displeasure.
Egyptian editor and publisher Hisham Kassem believed relations between the two countries were likely to worsen. In January 2017 he noted “The situation is definitely going to deteriorate further. For the Saudi regime, there is very little they can present to their people as an achievement," he said. "Regionally, their position is weakening, internally there’s no serious improvement in the economy, so they need little victories which they can magnify and talk about regaining land that was usurped, so they will be furious.”
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