This is the script for my video posted on July 16, 2026. Watch it on TikTok.
Egypt has been a recognizable geopolitical entity for about 5000 years. You’d think from its geographical position and its history that it would be far more powerful than it is. But Egypt today faces constraints that have made stability very difficult to achieve. So why hasn’t modern Egypt been able to achieve the power Ancient Egypt once had?
Since 3100 BCE, Egypt has always revolved around the Nile River. Originally the state formed to manage and tax irrigation agriculture in the desert, and this belief that the Nile is the state remains in place today.
Egypt also sits at the junction of Africa, Asia, and Europe via the Mediterranean, which is why so many empires have sought it, including Persians, Greeks, Romans, Arabs, Ottomans, the British, and the French.
In the early 19th century, a man named Muhammad Ali Pasha gained de facto autonomy under Ottoman rule and launched a forced modernization to develop a powerful army, an industrial sector, and exports of cotton.
But under Khedive Ismail the Magnificent, Egypt took on a tremendous amount of debt from Britain and France. Egypt had been bringing in huge amounts of money from cotton when American cotton output was disrupted during the US Civil War, but this collapsed when American cotton returned.
Facing bankruptcy, Ismail sold Egypt’s 44% stake in the Suez Canal Company to the British government in 1875. Their debt also led the French and British to control Egyptian finances, with debt service consuming roughly two-thirds of Egyptian revenues by the late 1870s. This fueled revolts and ultimately a British occupation that lasted until 1922, though British troops didn’t fully withdraw until 1956.
The Suez Canal opened in 1869 and cut the route between London and Bombay from nearly 11000 miles to just 6200, making a British India economically viable.
But when Gamal Abdel Nasser nationalized the Suez in 1956, taking the canal company out of British and French hands to fund a new dam, Britain, France, and Israel secretly colluded and invaded, but pressure from both the US and the Soviet Union forced them to withdraw in humiliation, marking a definitive end to French and British imperial power and the arrival of US and Soviet dominance in the Middle East.
Nasser emerged from this a hero. He championed pan-Arab nationalism and non-alignment during the Cold War, though he leaned toward the Soviets.
In 1967, the Six-Day War saw a catastrophic defeat for Egypt under Nasser as Israel took the Sinai Peninsula and Gaza, though in 1973, Nasser's successor Anwar Sadat and an Arab coalition launched a surprise attack during the Jewish holy day of Yom Kippur to retake the lost territory. The US backed Israel and the Soviets backed the Arab coalition, and despite proving that Israel wasn't invincible, the coalition didn't retake the lost lands on the battlefield. Egypt would only get the Sinai back later, at the negotiating table.
The Yom Kippur War was extremely important for Egypt. It caused Sadat to realize that the US, not the Soviet Union, had the diplomatic leverage they needed over Israel, and the US could also provide economic assistance that Egypt desperately needed. This led to the 1978 US-brokered Camp David Accords to initiate a peace process between Israel and Egypt, after which Egypt became the second largest recipient of US aid.
But Sadat was assassinated in 1981, and Hosni Mubarak took power, where he stayed for 30 years until the 2011 Arab Spring saw a new wave of political volatility. The Muslim Brotherhood’s Mohamed Morsi won the 2012 election, but in 2013 his defense minister Abdel Fattah el-Sisi overthrew him in a coup, and he has been president since.
Looking at the throughline, it’s pretty clear that Egypt has always traded its strategic position for external rents due to its own economic volatility. We see this in the case of British-era debt and occupation, with Cold War-era patronage from the Soviets and the US using arms, aid, and the Suez as leverage, and we also see it today.
Egypt’s external debt sits around 161b USD. Under Sisi it has grown 3-4x larger than it was, and the debt service is crushingly large. The IMF has an eight billion dollar program running to stabilize the economy, Egypt's fourth major bailout in a decade, and the Gulf states have poured in tens of billions more, but the stabilization is fragile and the Egyptian pound has progressively devalued. Remittances from Egyptians abroad hit a record 41 billion dollars in 2025 and are one of Egypt's biggest and most stable sources of foreign currency.
In general, Egypt relies on tourism, remittances, and the canal to stay afloat. The military's economic footprint is a different problem: nobody knows its true size because it publishes no accounts, but its privileges, tax exemptions, and untouchable status scare off the private investment Egypt desperately needs. Roughly two-thirds of banking assets are also held by state-owned banks. Sisi’s authoritarian government is desperately holding onto control, but this is preventing the economy from growing.
The Suez, which carries about 12-15% of global trade and about 30% of global container traffic, has also faced serious disruption in recent years Houthi attacks, and Egypt relies heavily on that revenue.
The Nile has always been Egypt’s key constraint. Today, about 109m people live on just 4% of Egypt’s land, and most of those are around the Nile, relying on it for about 97% of its freshwater. But Egypt doesn’t control the Nile’s source, which is in Ethiopia, and as water demand has grown, supply has dropped. Per-capita water availability is less than half of the UN’s water scarcity threshold of 1000 cubic meters per year.
Ethiopia’s Grand Ethiopian Renaissance Dam, or GERD, is the greatest threat to this. It was built without a binding agreement with Egypt or Sudan, and Egypt has no guaranteed say over how Ethiopia manages the water, especially in a drought. So far, Egypt has escalated this diplomatically via the UN as an existential threat to the country, in large part because the dam is already built and full, so a strike wouldn't undo anything. It would just wreck Egypt diplomatically and destabilize a region it depends on. Egypt has pivoted to a strategy of encirclement, building an anti-Ethiopia alliance with Eritrea and Somalia.
Meanwhile, Egypt shares a border with Gaza, and it has drawn a hard red line against Palestinians being displaced into the Sinai, fearing militant spillover into territory where it spent a decade fighting an insurgency. Its actual refugee burden is Sudanese, because well over a million people have fled Sudan's civil war. The Camp David framework is holding, but it's under strain. Egypt says Israel violated it by seizing the Gaza border corridor, and Egypt itself keeps far more troops in the Sinai than the treaty allows, though Israel has mostly signed off on those deployments. Egypt doesn't want conflict, because war would shatter the aid, treaties, and economy its survival depends on, so it has taken a mediating role instead to hold the border.
There are several other angles here that could have entire videos of their own. Egypt faces threats from Libya and Sudan. It relies on US military aid but has also partnered with Russia on its first nuclear power plant. Egypt is the world’s largest importer of wheat, which has been threatened by the war in Ukraine.
And all of this volatility has caused Sisi to cling to power and construct what many call a deeply repressive autocratic security state, because he is incredibly vulnerable to being overthrown. The state’s only real goal is regime survival, and the regime faces an existential threat from the availability of water and food, let alone the country’s general economic conditions and foreign dynamics. If one variable changes enough, it’s possible that the regime could collapse, but if change doesn’t happen, things certainly won’t get better.
Keep reading
- Why is South Sudan on the verge of collapse?
- Why has the DRC experienced Africa’s deadliest conflicts?
- How does South Africa’s history feed into its geopolitical dynamics?
I’m writing a book called Groundwork about the buried history beneath geopolitics. Join the waitlist to hear when it has a publisher, a cover, and a release date.