By Press TV
By Mohyeddin Sajedi
The Egyptian government has terminated a gas contract with Israel; more than contemplating the economic consequences of this measure, the Israeli officials are pondering its political ramifications.
A unilateral abolishment of the gas contract is the first step indicating the measure of political change in Egypt after the revolution on January 25, 2011 in this country.
A while ago, the Israeli foreign minister said that the situation in Egypt has become much more concerning for Israel than the Iranian issue.
Such a measure was expected after around 12 explosions hit the Egypt-Israel gas pipeline, but the sudden announcement of terminating the contract has caused a lot of concern for the Israelis.
The Camp David Pact signed in 1979 stipulates that Egypt should sell oil to Israel for 20 years. The term “oil” was changed to “gas” later on. In 2005, a gas contract was signed between Cairo and Tel Aviv, based on which Egypt should deliver seven billion cubic meters of gas to Israel annually.
The export of gas to Israel began in 2008. Israeli had previously rejected a plan to import gas from a Palestinian gas field on the Gaza shore, because it did not want to finance the government of late Palestinian leader Yasser Arafat. As for former Egyptian Dictator Hosni Mubarak, it thought the contract would serve to show its good faith to the US and also could be used as leverage.
Prior to the revolution in Egypt, the Egyptian gas provided for about 40 percent of the Israeli needs in its power plants and helped Israel save up to USD 2 billion in power generation. Successive explosions in the gas pipeline over the past year have reduced the level of imports and put an additional 25 percent on the Israeli electricity generation costs.
The Camp David Pact never enjoyed popular legitimacy in Egypt. Those who travelled to Israel would be subjected to boycotts in their own trade unions. The visit by Egyptian Mufti Ali Gomaa to al-Quds (Jerusalem) a few days ago provoked public protests and the Egyptian parliament therefore called for his removal.
The Mubarak government undercharged Israel for its gas and faced internal protests during its own rule. An Egyptian court even once ordered the annulment of the contract. Right now one of the charges that the former Egyptian dictator faces is selling cheap gas to Israel and wasting Egypt’s national wealth.
The Israeli company importing the Egyptian gas has called on Egypt to prevent revocation of the contract, threatening the country with USD 8 billion in remuneration. The figure is exaggerated, but Israeli officials are alluding to the contract for the establishment of a free trade zone among Egypt, Israel and the US which will earn Egypt USD 2.5 billion a year in addition to hundreds of new jobs. They claim canceling gas sales to Israel will cast doubts on the fate of the latter contract.
The opposition of all Egyptian presidential candidates to the continuation of Camp David Accord has added to Israel’s concerns. Even Amr Mousa, a former Egyptian foreign minister, says the accord is dead. Perhaps, this word will be more tolerable for the Israelis than those used by other candidates which also insist on the abrogation of the accord. Omar Suleiman, head of Egypt’s intelligence whose name has been crossed out from the list of presidential candidates, believes the gas sales deal had been “imposed” on Egypt.
Camp David Accord provided Israel with an opportunity to reduce its forces along the border with Egypt and channel its budget to social and welfare affairs as well as strengthening the northern (Golan) and western (Gaza) border positions. The deterioration of ties with Egypt has prompted the Israeli Foreign Minister Avigdor Lieberman to propose that the fourth division of the Israeli army, which was dismantled after peace with Egypt, should be brought back to life, while allocating necessary budget to it.
It is not still clear what Egypt’s final decision will be as it should be approved by the country’s military council. In that case, the council will gain more popularity in the public opinion and the approval will also improve the standing of Kamal Ganzouri’s government which is already under fire for domestic fuel crisis.
Tel Aviv has urged the US to make Egypt go back over its decision. Israel is not likely to be able to get remuneration from Egypt over the revocation of gas deal. Egypt is not in good economic conditions as the reduced inflow of foreign tourists and the return of tens of thousands of Libyan and Tunisian workers to their countries have reduced its foreign exchange revenues. The spread of poverty in Egypt has made people think the revenues earned through free trade with the US and Israel had been pocketed by corrupt politicians.
When the US Congress was discussing possible discontinuation of USD 2 billion dollars in annual aid to Egypt, the Egyptian public opinion was galvanized into action to help the government and make it needless of the Western aid.
Although the Israeli foreign minister had once called for the bombardment of Aswan dam and now argues that the future Egyptian president will not cancel Camp David Accord, his ambassador to Cairo has not been able to find a new location for the Israel Embassy. While nobody has been willing to rent their house to the Israel Embassy, the Palestinian Embassy has been relocated to a better place.
Mohyeddin Sajedi is a prominent Iranian political analyst, Mohyeddin Sajedi writes extensively on the Middle East issues. He also serves as a Middle East expert at the Center for Middle East Strategic Studies in Tehran.