Saudi Arabia Closes Embassy in Egypt

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Saudi Arabia closed its embassy in Egypt’s capital and withdrew its ambassador amid protests by hundreds of Egyptians, sparking a diplomatic crisis just as Egypt’s economy is most in need of assistance from its wealthy neighbor.

The Saudi Embassy in Cairo has been the sight of protests for nearly a week. A Saudi judge sentenced Ahmed el-Gezawi, an Egyptian lawyer, to a year in prison and 20 lashes for allegedly “insulting” King Abdullah, the monarch who has led the desert kingdom since 2005, according to Mr. Gezawi’s family.

The official Saudi Press Agency reported on Saturday that Ahmed Qattan would return to Riyadh for “consultations” after “unjustified demonstrations and protests” and “attempts to storm and threaten the security and safety of Saudi and Egyptian employees, raising hostile slogans and violating the inviolability and sovereignty” of the kingdom’s embassy in Cairo and its consulates in the port cities of Alexandria and Suez.

Saudi authorities said Mr. Gezawi was arrested for smuggling several thousand doses of the antianxiety medication Xanax when he entered the kingdom to perform a pilgrimage to the Saudi holy site of Mecca. Saudi Foreign Ministry spokesman Osama Nugali said Mr. Gezawi hadn’t yet faced trial.

But Mr. Gezawi’s supporters contend that Saudi authorities targeted the human rights lawyer because he filed a lawsuit against King Abdullah to complain about the arbitrary arrest, detention and ill-treatment of thousands of Egyptian guest workers.

The ambassador’s withdrawal marks the worst escalation in diplomatic tensions between the two countries since Egypt signed a peace treaty with Israel in 1979.

Field Marshal Hussein Tantawi, the leader of the council of generals leading Egypt until the promised hand-over of power to civilians at the end of June, called King Abdullah on Saturday to attempt to mend the damaged relationship, according to Egypt’s state news agency.

Saturday’s flap comes during a precarious moment for Egypt’s economy. Egypt needs financial assurances from its wealthy Arab neighbors to both shore up its $11 billion budget deficit and to help underwrite a $3.2 billion loan Egypt is negotiating with the International Monetary Fund.

The IMF loan will be crucial to repairing the damaged perception of the Egyptian economy among foreign investors and forestalling a currency devaluation. If Egypt can gather the domestic and regional political support necessary to secure the loan in the next few months, economists expect the country can avoid a disorderly collapse of the Egyptian pound.

Egyptian financial authorities rejected the loan last summer, in part because of expectations that Saudi Arabia, the world’s biggest oil producer, would follow through on its commitment to lend Egypt $3.75 billion. Except for $500 million sent last summer, Egypt has yet to see the rest of the cash. But last week Saudi Arabia agreed to deposit $1 billion in aid with Egypt’s central bank.

The IMF repeatedly has said that Egypt will need “adequate external financing from Egypt’s international partners,” a phrase that economic analysts understand to mean in-kind loans from European, American and particularly Persian Gulf Arab donors who hold extensive business, political and cultural connections to Egypt.

Those connections once formed a diplomatic barricade against the spread of Iranian influence throughout the wider Middle East. But in the 14 months since protesters felled former President Hosni Mubarak, those connections have frayed.

Saudi diplomats were furious when Egypt’s first post-Mubarak foreign minister announced that he would seek warmer relations with Iran. Egyptian prosecutors then began peering into the details of business deals conducted by Saudi investors under Egypt’s former regime. Prominent members of the Saudi royal establishment, including billionaire Al Waleed bin Talal, found themselves answering to financial probes that would have been unthinkable only two years ago.

The Saudis were further incensed when Egyptian prosecutors charged Mr. Mubarak, an old friend of the Saudi royal family, with capital murder crimes for his role in suppressing the uprising that eventually overthrew him.

But the harder line on Saudi interests has been popular among Egypt’s newly emboldened public. Since the 1970s, millions of Egyptians have traveled to Saudi Arabia to make their fortunes in the kingdom’s booming oil industry.

Liberal Egyptians blame Saudi cultural influence for the decadeslong rise in religiosity and the sudden surge of fundamentalist Salafi Islamist thought in Egypt’s postrevolutionary politics. Many more resent the way Egyptian workers are treated under the Saudi legal system. Mr. Gezawi’s activism was widely applauded as a strong stand against Saudi Arabia’s exploitative guest-worker program and alleged disregard for the rights of foreign workers.

WSJ