Egypt is facing enormous difficulties in its attempts to convince Iraq’s Shia-led government to extend it financial and economic aid amid growing fears that the country is on the brink of an economic downhill slide.

Hard hit by its inability to finance imports of fuel, wheat and other basic commodities caused by sliding foreign currency reserves and a soaring budget deficit following the 25 January Revolution that toppled former president Hosni Mubarak, Egypt has been casting around for credits and cash to stem an economic collapse.

Iraqi officials say that Cairo’s efforts to gain Iraqi Prime Minister Nuri Al-Maliki’s approval for a multi-billion dollar bond to be deposited in Egypt’s Central Bank to bolster its faltering economy and pay for badly needed supplies of crude oil have stumbled over Egypt’s desire for generous terms and domestic political complexities in both countries.

Last week, Al-Maliki’s deputy Hussein Al-Shahristani was quoted as saying that his country would ship four million barrels of crude oil to Egypt every month starting from April. The announcement raised hopes that the Iraqi supplies would help assuage a severe fuel shortage that has been feeding anti-government sentiment in Egypt.

But one Iraqi official said that little had been done to finalise an agreement that could meet Egypt’s ambitious expectations from a country that is already embroiled in political conflict and ethno-sectarian strife that its Shia-led government partially blames on its Sunni-dominated Arab neighbours.

“We haven’t seen any sign of concrete talks. In order for the oil deal to hit the ground, Baghdad is waiting for detailed negotiations with Cairo regarding a broader and more systematic approach to bilateral relations,” the Iraq official told Al-Ahram Weekly on Tuesday.

“There are outstanding issues which need to be tackled before any financial or oil deal can be reached,” he stressed without elaborating.

Among the obstacles that Iraq says could block any financial deal with Egypt are restrictions on transactions put in place by the UN sanctions following former Iraqi president Saddam Hussein’s invasion of Kuwait in 1990, including an embargo on the Cairo branch of the Iraqi state-owned Rafidain Bank which Iraq wants to reopen to handle financial transactions.

Iraq also wants Egypt to lift visa restrictions on its citizens, who currently need security clearance for entry.

In addition to these restrictions, a request from Egypt for a $4 billion bond to be deposited in Egypt’s Central Bank to shore up its foreign currency reserves has hit a snag over the easy terms requested by Egypt, according to the Iraqi official, who spoke on condition of anonymity.

Egyptian President Mohamed Morsi had initially made a request for a $5 billion deposit during a visit by Al-Maliki to Cairo in February. The sum was meant to be similar to the deposits in Egypt’s Central Bank from Qatar, Saudi Arabia and Turkey that have been ring-fenced and cannot be touched.

Al-Maliki reportedly told Morsi that he could not guarantee the endorsement by Iraq’s fractured parliament of such a huge sum, but that he would consider a smaller amount and suggested negotiations between the two governments on terms.

Egypt is also believed to be seeking Iraqi crude oil at preferential prices in a deal similar to the one with neighbouring Jordan. Egypt is said to want to import diesel fuel from Iraq on a daily basis.

Last month, Egyptian Prime Minister Hisham Kandil visited Iraq at the head of a large government and business delegation to follow up on the loan request and make other requests, including the provision of Egypt with crude oil.

The talks also focussed on the areas of trade, power, health and reconstruction. After the visit, Iraq lifted a ban on Egyptian dairy imports and released pensions owed to Egyptians who left Iraq after Saddam’s invasion of Kuwait in 1990.

Iraqi-Egyptian relations were broken off in 1990 after Egypt joined the US-led coalition that forced Iraq out of Kuwait during the Iraq-Kuwait war. The two countries partially patched up ties during Saddam’s last years in power, with Egypt becoming Iraq’s fourth-largest business partner, but relations have remained cool with the Shia-led government that came to power in Iraq following Saddam’s ouster.

Last year, Iraq transferred $408 million, the value of remittances owed by Iraq, to 670,000 Egyptian workers who left the country in the 1990s during the Gulf War. Efforts to solve the problem during Mubarak’s rule had faltered because Egypt had insisted that Iraq should also pay some $100 million in interest.

While Egypt is still waiting for Baghdad’s nod to help salvage its sky-diving economy, it has also escalated attempts to improve relations with Shia Iran, which is believed to be a close ally of Al-Maliki’s government.

Iran and Egypt resumed commercial flights this week some 34 years after the two countries severed relations following the Islamic Revolution in Iran that toppled the pro-Western shah Mohamed Reza Pahlavi and triggered an ideological backlash from Egypt.

Relations soured even more under Mubarak, who accused Iran of supporting radical Islamist groups in Egypt and Shias throughout the Middle East.

But Tehran and Cairo moved to improve ties following the ouster of Mubarak, and Morsi was the first Egyptian president to visit the Islamic Republic last August. In February, Morsi received Iranian President Mahmoud Ahmadinejad in Cairo while the latter was attending a conference of Islamic nations.

On Sunday, dozens of Iranian tourists arrived in southern Egypt to visit Pharaonic sites as part of a bilateral tourism-promotion deal. The following day, Ahmadinejad signed a draft law that would see the lifting of visa requirements for Egyptian tourists visiting the Islamic Republic.

Under a cooperation agreement signed last month, charter flights between Egypt and Iran will link the Upper Egyptian tourist cities of Luxor, Aswan and Abu Simbel with Iran.

Iranian tourists will initially not be allowed to visit Shia shrines in Cairo.

Egypt’s willingness to engage with Iraq and Iran could be largely motivated by economics, but it also indicates how economic difficulties are shaping the perspectives and strategies of Egypt’s new Islamist rulers.

Many observers believe that thaws in relations with Iran and stepping up ties with Iraq could signal the intention of the Egyptian government to integrate economic relations with foreign policy, even if that could harm its relations with some of Egypt’s traditional allies.

Many Egyptians feel they have been betrayed by their Sunni Arab brethren since the 25 January Revolution and feel shock and anger at what they consider to be their economic excommunication, leaving the country to scramble to cut deals abroad to help keep it from sinking into chaos.

Egypt has sought help from several wealthy Arab countries to shore up depleted reserves in its Central Bank, but few have been forthcoming. Only the oil-rich Gulf emirate of Qatar has provided funding, including a $5 billion loan deposit.

Saudi Arabia, the world’s largest oil exporter, has provided only $1 billion in loans.

On the other hand, Cairo’s new approach could challenge the United States, which considers Iran to be its arch-enemy in the Middle East. Washington is Egypt’s largest donor, and it has announced that it will provide an extra long-term loan of $450 million to spur reform.

Some Egyptians believe that their Muslim Brotherhood-controlled government is playing a dangerous game by trying to put pressure on the oil-rich countries in the Gulf by strengthening cooperation with Iran and Shia-led Iraq.

They believe that this policy could further alienate Egypt from its Arab neighbours, while giving no guarantees that the Iraqis and Iranians will deliver.

The policy is also facing domestic opposition. Hard-line Islamist groups such as the Salafists have voiced concern that Iranians and Iraqi Shias could soon be flocking to Egypt to spread their Shia brand of Islam.

A previously unknown group called the Islamic Alliance for the Defence of the Prophet’s Companions and his Family warned on Sunday that it “would not allow” Iranian tourists into Egypt and would send them back to their country.

But Essam Al-Erian, a senior Muslim Brotherhood leader and deputy president of its political front the Freedom and Justice Party, dismissed the threats.

“Egypt cannot be infiltrated by a trend or an ideology. It has defied communism and secularism, and it has mixed its nationalism with an Islamist element,” he wrote on Facebook on Saturday.

“Egypt will remain Sunni,” Al-Erian wrote.

However, the hard political facts remain. Iraq’s Shia-led government and its Iranian allies are not going to help Egypt without reciprocal political benefit. For them, the goal should be to lure Egypt further away from its Arab Sunni brethren, especially Saudi Arabia and the other Gulf nations.

Such an outcome would be extremely costly to Egypt, which would likely suffer from restrictions and probably boycott by the Gulf countries and the United States, jeopardising other aspects of its foreign policy.

Can Iraqis and Kuwaitis draw appropriate lessons from their turbulent past and live peacefully as neighbours, asks Salah Nasrawi

The newsroom in the villa-turned-office of the Associated Press in the Qatari capital of Doha looked like any other newsroom, except that it was being swiftly readied for “Shock and awe”, the codename given by the Pentagon to the upcoming US-led invasion of Iraq.

In early March 2003, I was sent there as an AP correspondent to join a strong team of editors and writers who would be reporting and supervising news coverage of the war on Iraq.

The gas and oil-rich Gulf emirate was hosting two US military bases and the headquarters of the war command, where daily briefings were planned over the course of the war.

As an Iraqi reporter who had covered the Iraq-Iran War in the 1980s and the 1991 Gulf War for AP, I was also supposed to provide independent coverage from the invaded country’s point of view and help other AP reporters shape their stories by providing input on the cultural and historical background of Iraq.

Personally, I did not support the war, but probably like most Iraqis I was excited at the prospect of the new opportunities that could await the Iraqi people after the expected ouster of the Saddam Hussein dictatorship.

Yet, I already had my doubts about the announced goals of the invasion, especially about its creating a functioning democracy in Iraq. Based on thorough research of the war preparations and previous US experiences of intervention, it had become clear to me that Washington had no nation-building plans for Iraq and that it had thrown together a strategy for the invasion on the fly.

What came to trouble me most and prompted me to leave AP’s war room in Doha after only two weeks was my feeling that I should not put myself in a position where I might be seen as unpatriotic or unconsciously boosting the US-led invasion and occupation of my country.

Indeed, during the standoff with the Saddam regime, I had resisted attempts to be manipulated by the bizarre media fabrication of news about Saddam’s weapons of mass destruction, which had helped former US president George W Bush make the case for war.

Three months before the war started, I had argued in an article published in the Arabic-language newspaper Al-Hayat that the United States would eventually defeat Saddam’s forces, but that disaster would ensue, leaving the country in ruins.

Ten years after the horrendous adventure, Iraq today is a devastated and tormented nation. Reports published on the eve of the 10th anniversary of the US-led invasion show that both the human and financial costs of the invasion of Iraq are higher than most people realise.

A decade of war in Iraq has killed hundreds of thousands of Iraqi civilians and potentially contributed to the deaths of many hundreds of thousands more from indirect causes related to devastated infrastructure.

There are now more than one million Iraqi refugees abroad who have little hope of returning to their homes due to the ongoing political instability and violence. Millions of Iraqis remain displaced inside Iraq, some of them indefinitely, and many of them are living in grotesque conditions.

Iraq’s healthcare, infrastructure, and education systems were devastated by the war. Public services, including water and electricity supplies, are in disarray.

The ripple effects on the Iraqi economy have also been significant, as Iraq now imports most of its food, and farmers and factory workers have found themselves out of their jobs as agriculture and industry have ground to a halt.

Corruption is rampant. Bribery, graft and racketeering are not only widespread, but they are also systematic and institutionalised. Since the US occupation in 2003, Iraq has been ranked by the international NGO Transparency International as among the most corrupt countries in the world.

Most women in Iraq live in poverty, and they are shut out of social life. Violence against women, high rates of female unemployment, increasing religious intolerance and widowhood have further eroded their status.

While it was promised that the US-led invasion would bring democracy, freedom and human rights to Iraq, the country remains enmeshed in a grim cycle of human rights abuses, including attacks on civilians, the torture of detainees and unfair trials.

In a report on the country 10 years after the US-led invasion, the international NGO Amnesty International said this week that a decade of abuses had exposed a litany of torture and other ill-treatments of detainees committed by the Iraqi security forces and foreign troops in the wake of the 2003 invasion.

The report highlighted the “Iraqi authorities continuing failure to observe their obligations to uphold human rights and respect the rule of law in the face of persistent deadly attacks by armed groups, who show callous disregard for civilian life.”

Iraq is now gripped in its worst political crisis since the US-led invasion, amid sectarian divisions, rival clashes and terrorist attacks that have sparked concerns about the country’s post-war stability.

Iraq’s government is in disarray. Nearly half of the ministers have been boycotting cabinet meetings for months, while the parliament rarely meets to debate national issues.

The country’s constitution is a matter of opinion, and its political elite are at loggerheads with each other. Its president has been reported to be clinically dead, while political parties cannot even contemplate choosing a successor.

For months, the country has been gripped by the worst political crisis for years, with Iraq’s three main ethnicities bickering over a power and wealth-sharing structure formulated by the US occupation authorities that made Iraq into a federal state.

A few weeks before last year ended, the political deadlock took a sharp and perilous course as the country’s Shia-led government and its Kurdish and Sunni partners engaged in a bitter power struggle and military standoffs.

The sharpening divide between Iraq’s Shias and Sunnis has given rise to increasing sectarianism. Hundreds of people are still losing their lives to sectarian conflict each month, mostly in attacks by the Sunni Al-Qaeda terrorist group against Shias.

By and large, the US-led invasion and occupation of Iraq and its aftermath over the past ten years has inflicted multiple disasters on the country and turned Iraq into a failed state.

Today, Iraq stands on the verge of a devastating all-out civil war that would complete what the Americans started by ruining the country that was once the birthplace of human civilisation.

Surprisingly, many of the writers in the US mainstream media who swarmed over Iraq for the tenth anniversary of Bush’s army marching on Baghdad are still removed from reality and look at Iraq through the lenses of the war’s promoters.

Some of them insist that Iraq today has far better prospects than it would have had under Saddam, citing for example the Shias’ public displays of their faith by hanging up images of their revered saints, or nightly TV talk shows that bristle with barking criticisms of the government.

In talking themselves into believing these lurid fantasies, these reporters do not neglect to mention other signs of progress, such as waiters in Baghdad restaurants taking orders for spaghetti and pizza on iPads, or shopping malls and swanky hotels opening up in some parts of Iraq.

Other US writers have missed the opportunity for real reflection on the anniversary, instead engaging in useless debate about the flawed case for the war made by the Bush administration and by the dysfunctional national security process and tensions between different policy-making bodies.

A decade after the catastrophic invasion of Iraq, the Iraqi people are entitled to know more about the deceit of US policy-makers who deliberately and consciously launched a war to destroy Iraq.

Like during the fiasco of the invasion itself, when the US mainstream media participated in building the case for the war, the fiasco of the war’s anniversary has shown that the same media has not been forthcoming in reflecting on the broader question of why the Bush administration embarked on the vicious enterprise of destroying Iraq, unleashing the dynamics that are now playing out and destroying the wider Middle East.