Why is Egypt waging war against the Houthis? First, follow the money.

The Egyptian parliament has voteafter two postponements, to authorize President Abdel-Fattah al-Sisi to take “necessary steps” to help defend Saudi Arabia against the Houthis, the Iran-aligned group that controls much of Yemen and has spent weeks firing missiles and drones at the kingdom’s airports and fossil fuel infrastructure.

It took weeks of debate in the corridors of power for Parliament to finally give Sissi the green light. This is unusual given that the chamber is largely pro-government and normally gives the president what he asks for.

A handful of MPs abstained concerns that relevant details – such as the duration of the mission, the cost, the number of troops who would be sent – ​​were never disclosed. Their complaints reflect a deep unease in Egypt about being drawn into a foreign war.

To understand why Sisi pushed to provide military support to Saudi Arabia, despite institutional reluctance, you have to follow the money.

Saudi Arabia guard approximately $10.3 billion parked at the Egyptian central bank. These deposits count towards Egypt’s foreign currency reserves. Add the accounts held by Kuwait and Qatar and the total This represents around $18 billion, or almost a third of Egypt’s $57 billion reserves. Egypt relies heavily on these deposits as it is one of the world’s largest importers of wheat. It also buys an increasing amount of fuel from abroad and must billions in interest to foreign lenders, all in dollars, which he doesn’t earn enough on his own.

There is no public indication that Riyadh linked these critical deposits to Egyptian military support. But there is no need to ask Cairo. Its just a pound hit a record high of 56 per dollar. Debt service – interest plus repayments – takes about 64% of this year’s budget, and interest payments alone cost more that the state spends on education, health, salaries and subsidies combined. A government in this position cannot easily say “no” to one of its major donors.

Egypt has spent decades avoiding foreign entanglements, notably in Yemen. In 1962, Gamal Abdel Nasser, then president, sent troops there to support the Republicans in a civil war. The Republicans eventually won, but Egypt was bogged down for years and lost thousands of soldiers.

Yet staying away proved far more difficult than Egypt hoped. When Iranian missiles struck the United Arab Emirates earlier this year, Abu Dhabi, which saved Egypt’s economy in 2024 with a blockbuster $35 billion real estate deal on the Mediterranean coast, complained loud and clear that his Arab friends were doing nothing. Cairo then quietly sent a detachment of Rafale fighters, which only became public when Emirati state media showed Sissi inspecting planes during a visit.

The lesson learned from this episode is that Gulf money comes with an expectation of visible loyalty.

Saudi Crown Prince Mohammad bin Salman (MBS) then visited Cairo in September, would have to seek help in response to escalating Houthi attacks on the kingdom. Egypt read aloud The content of the meeting was categorical, describing Saudi security as “an integral part of Egyptian national security.” But he never named the Houthis or promised concrete military support. He also paired his rhetorical support for the kingdom’s security with a call for a political settlement in Yemen.

Six weeks later, the Egyptian parliament gave Sisi the power to do more, even if he underlines that the mission is defensive and “does not include an attack on Yemen.” Cairo’s top diplomat, Badr Abdelatty, also stressed that “all opportunities to achieve political solutions must be explored”. Cairo is thus trying to provide symbolic support to Riyadh without becoming a party to its war.

That pleases a key donor but does nothing for Egypt’s other exposed pillar, the Suez Canal, which is one of Egypt’s most important sources of foreign currency and carries about 12 percent of global trade.

The canal brought in $10.2 billion in 2023, but when the Houthis began attacking ships in the Red Sea in solidarity with Gaza and forced ships to bypass Africa, that figure was reached. fell to about $4 billion in 2024. The canal authority is hoping for $8 billion in the 2026/27 financial year, but this target assumes the Red Sea calms – an unlikely prospect at the moment.

Since July, the Houthis have declared a blockade on Saudi shipping. In September, they seized the Yemeni ports of Mocha and the island of Mayun, giving them control of the Bab al-Mandeb Strait, the narrow gateway at the southern end of the Red Sea through which any ship bound for Suez must pass.

Cairo would have set up a crisis unit and opened channels to the Houthis in response. An Egyptian source told The New Arab that these channels were being used to pressure the group to avoid escalation and keep the strait open for navigation. Egypt has little leverage to do more since it still formally belongs to the Saudi-led coalition that supports Yemen’s internationally recognized government, which has prevented Cairo from developing diplomatic channels with the rebel faction.

Above all this is the broader war between the United States, Israel and Iran, which has now lasted eight months. This week, envoys from Saudi Arabia, Turkey and Pakistan, the three members of the Mecca Pact, which Egypt signed said he is “seriously considering” joining – stole in Tehran to discuss de-escalation. No concrete commitment emerged from the negotiations.

While Egypt may not have a front-row seat in public diplomacy with Tehran, it is working quietly behind the scenes. Abdelatty recently said According to the journalists, Egypt is in daily contact with the Iranians, the Americans and the regional states to avoid “real military clashes which would have a very, very negative impact on the populations of the region.”

Abdelatty made the comments as President Donald Trump muses openly on the resumption of strikes against Iran after the mid-term elections of November 3. Benjamin Netanyahu, the Israeli Prime Minister, reportedly pushed for his own attacks in the context of elections in his own country, with the apparent aim of complicating his opponent’s efforts to form a government.

A second round of fighting would harm Egypt more than the first. The country has already been hit directly: on July 29, a drone hit a floating gas terminal in the port of Damietta and set two ships on fire. No one has claimed responsibility and Egyptian officials have never publicly shared their own findings, but renewed fighting could result in more drones and missiles landing on Egyptian soil.

This danger is heightened now that Egypt has officially committed to defending Saudi Arabia. A senior Houthi official warned that Cairo’s decision amounts to a “declaration of war” on Yemen, placing Egypt firmly in the crosshairs.

Egypt imports a growing share of its gas, and a further surge in energy prices would add further pressure to an already strained budget. The Suez Canal is also under increased pressure from the Houthis, who are now better placed to curb shipping on the Red Sea.

Finally, there are remittances – the money that Egyptians abroad send home, which helps keep foreign currency reserves and Egypt’s economy afloat. At least 1.25 million Egyptians work in Saudi Arabia alone. The war in Iran has already strained the Saudi and Gulf economies, and an Iranian official said: warned that if Iran is attacked again, “there will be no more red lines.”

Iran also drafted plans to hit undersea cables, and its top security official warned that U.S.-linked data centers and oil facilities in the Gulf could be targeted. Damage of this magnitude could lead to layoffs across the Gulf, very quickly changing the situation for the Egyptian economy and its stability.