Mohamed Morsy's young presidency in Egypt hasn't started all that smoothly. It's largely been characterized by a series of standoffs with the Egyptian military, including this week's controversial court case on the legality of an assembly tasked with drafting the country's new constitution. But Morsy is also performing a less publicized high-wire act in trying to court vital benefactors in the Persian Gulf, particularly Saudi Arabia. How this endeavor plays out could prove just as consequential for his political survival.
Since Morsy became president last month and resigned from the Muslim Brotherhood, he has worked hard to ease tensions with jittery Gulf countries. Dubai's police chief has been warning Gulf leaders since March that local Brotherhood cells "want to stir the streets" against them, but Morsy's real challenge is to reassure a visibly nervous Saudi Arabia, which lost its key ally Hosni Mubarak to Egypt's popular uprising. In an effort to secure Saudi aid, Morsy has done all the right things: pledging not to export Egypt's revolution, describing the Gulf countries' security as a "red line" that should not be crossed, and making the kingdom his first foreign destination as president last week.
So far, Morsy's overtures appear to have placated the Saudis, who have continued sending Egypt financial support. But while there are similarities between the Brotherhood's ideology and Saudi Arabia's Wahhabi brand of Islam -- both are Sunni, religiously zealous, and critical of Western influence in Muslim countries -- it's safe to say that the Saudis preferred Egypt's old order.
As a Sunni Islamist who came to power through democratic elections, Morsy challenges the autocratic system that Saudi Arabia's rulers have been fighting tooth and nail to uphold. Just last year, the Saudis doled out nearly $130 billion in aid packages to their citizens to assuage discontent. But they did not simply rely on cash to save themselves. The kingdom's leaders also preempted planned "day of rage" protests in March 2011 by sending thousands of troops to Shiite-majority provinces, locking down the capital, and unleashing loyal clergy to threaten potential protesters with violence.
Those measures brought some calm to Saudi Arabia, but not for long. Violent protests erupted last week in the Eastern Province -- home to the country's oil and most of its Shiite population -- after security forces shot and arrested prominent Shiite cleric Nimr al-Nimr for instigating "sedition." With restless Shiite citizens in the region already chafing at the state's discrimination, Saudi authorities poured gasoline on the fire when they fatally shot two men during the demonstrations. More than a week later, crowds are still taking to the streets in protest and showing no signs of letting up.
The Shiite question is just one of several reasons why the Saudis worry about the future of Egypt. Long before Morsy's election, the Saudis were nervous that Shiite Iran would exploit Egypt's transition. Although Egypt and Iran severed diplomatic relations in 1980 because of Egypt's close relationship with Shah Mohammad Reza Pahlavi and its signing of a peace treaty with Israel, the two countries have maintained economic ties. One example is the Misr Iran Development Bank, a joint venture that was founded in 1975 and survived the next 30 years of turmoil in the Egyptian-Iranian relationship. Today, U.S. Treasury officials suspect that Iran may use the bank as a means of skirting international sanctions on its nuclear program.
Saudi anxieties only deepened in February when Egypt allowed Iranian naval ships to pass through the Suez Canal -- an act Mubarak's regime prohibited. In May, Morsy said that he hoped to have "relations" with Iran during a televised interview with Egypt's CBC network, though he was careful to not specify what type of relationship he wants with Iran and to emphasize that the relationship would not come at the expense of Gulf countries' security (Iran's Fars News Agency later quoted Morsy as saying that he wanted to strengthen ties with Iran to strike a strategic "balance" in the Middle East, in a purported interview that Morsy vehemently denies giving).
In response to these growing concerns, the kingdom is doing what it always does: throwing petrodollars at the problem. In June, the Saudis gave Cairo $1.5 billion toward the state budget (the Financial Times has reported that the Egyptian government expects a budget deficit this year of 7.6 percent). The kingdom, which currently funds more than 2,300 projects in Egypt and maintains investments there that are estimated to be worth anywhere from $12 billion to $27 billion, also provided Cairo with a $750 million credit for Saudi oil imports, $230 million for a range of water and agriculture projects, and $200 million for Egyptian businesses.
These goodwill gestures come on the heels of an April spat in which the Saudis arrested Egyptian lawyer Ahmed al-Gizawy on charges of smuggling narcotics into the kingdom, sparking large-scale protests near the Saudi embassy in Cairo. In response, Riyadh quickly postponed negotiations over a $2.7 billion aid package to Egypt, closed its embassy and consulates in the country, and recalled its ambassador.
For Egypt, which is battling an official unemployment rate of around 12.6 percent, ending the dispute was critical. An estimated 1.6 million Egyptians work in the kingdom and provide important remittances to their families back home -- the Central Bank of Egypt estimated that these remittance flows amounted to $785 million in 2006. And bilateral trade between the countries reached a record $1.2 billion during the first quarter of 2012, with Egyptian exports to Saudi Arabia totaling $528 million.
Eventually, the Saudis restored relations and agreed to deposit $1 billion in Egypt's central bank and sign other financial agreements, but not until a Brotherhood-led parliamentary delegation traveled to Riyadh and apologized directly to King Abdullah. As for Gizawy, he remains in a Saudi prison and is slated to stand trial this Wednesday.
Amid all this, the Saudis remain deeply ambivalent about Morsy. Since his election victory, Saudi and Saudi-owned pan-Arab news outlets have complained that challenger Ahmed Shafiq's campaign was undermined by mistrust and intimidation, and that Iran may be able to manipulate Morsy. They have also questioned Morsy's current affiliation with the Brotherhood, in light of his resignation from the group after assuming the presidency, and one paper speculated that he might mishandle touchy foreign-policy issues such as clamping down on "Tehran's support for local groups and attempts to spread the Shiite ideology" in Egypt.
The Saudi-Brotherhood relationship has always been complicated. The Saudi royals -- led by King Abdullah, who is formally known as the "Custodian of the Two Holy Mosques" -- fancy themselves the leaders of the global Muslim community, and rely on clerics to shore up their rule and command political submission from their people.
The Brotherhood, by contrast, originated in Egypt as a response to Western colonialism and decadence, which its founder, Hassan al-Banna, felt were degrading Muslim societies. The Brotherhood relies on religious pretexts to advance a populist political movement.
In the 1950s and 1960s, the Saudis embraced their common ground with the Brotherhood, encouraging thousands of its members to emigrate from Egypt, Iraq, and Syria to the kingdom as a means of counteracting Egyptian leader Gamal Abdel Nasser's pan-Arab socialist advances. The Brothers quickly became influential in Saudi society and particularly in the education system, where they composed a large portion of the university faculty.
At first, the alliance was mutually beneficial, but Brotherhood activists soon challenged the kingdom's political establishment. The most infamous byproduct of Saudi exposure to the Brotherhood was Osama bin Laden himself, who took inspiration from Palestinian Brother and jihadi theorist Abdullah Azzam's lectures in Jeddah during the early 1980s. After the outbreak of the first Gulf War in 1991, the Saudis suffered another Brotherhood-induced headache from the Sahwa ("Awakening") clerics, a group of ultraconservative Islamists who directly challenged the monarchy over the "infidel" U.S. military presence on the Arabian Peninsula.
After the Sept. 11 attacks, the late Saudi Crown Prince Nayef blamed all his country's problems on the Brotherhood. Those charges only intensified in 2003 when bin Laden's foot soldiers carried out attacks inside the kingdom for the first time. In the ensuing years, the Saudis appeared to regain the upper hand in their struggle to contain "deviant" interpretations of Islam, breaking up local al Qaeda cells, arresting or killing suspected militants, launching a "counter-radicalization" program, and monitoring thousands of mosques, schools, and websites.
But the Arab uprisings that began last year reversed that momentum, toppling several Saudi allies and heralding the rise of Brotherhood movements across the Middle East. The Saudis reacted with immediate alarm. Following Mubarak's overthrow, according to Egypt Independent, the Saudi government pulled all public school books that mentioned Brotherhood founder Hassan al-Banna from circulation because they incited "violence."
With this troubled Saudi-Brotherhood relationship hanging over his head, Morsy is walking a delicate line with Riyadh. The Saudis are ambivalent about his Islamist credentials, but they also want to thwart Iranian aspirations in the Arab world. Their main goal now is to pull the new Egypt into their sphere of influence.
Luckily for them, Morsy desperately needs Saudi money to repair Egypt's economy and has virtually no choice but to accept the terms that come with it. Unlike Iran, the Saudis are free to sell their oil. And for now, they have Morsy exactly where they want him: over a barrel.