On January 4, the Egyptian parliament approved amendments to the Desert Lands Law (143) of 1981, allowing foreign investors unrestricted access to buy real estate in the Egyptian desert. The move aims to boost foreign investment in the country and revive the desert economy, but it prompts a number of questions about its motivations, timing and repercussions.
It is notable that when the government first announced its proposal to amend the law, it gave no details on the amendments in question, apparently seeking first to gauge public reaction in order ensure that the law would eventually pass. There were rumors that certain nationalities—Israelis, for example—would be excluded, to persuade those who were suspicious of the law that it would not pose any threat to national security. Egyptian President Abdel Fattah El-Sisi also issued a presidential decree in early 2023, allocating 87 feddans to the armed forces in North and Central Sinai.
The amendments that were eventually approved by parliament stipulate that foreigners are allowed to own desert land in the Sinai, giving foreign investors the right to obtain real estate in order to conduct or expand their activities, without being bound by the provisions of the 1981 Desert Lands Law, which had stipulated that “No less than 51% of the company’s capital must be under Egyptian ownership, and no single individual should own more than 20%.”
Motivations and Timing
Several immediate factors help explain this decision. First and foremost is the severe economic crisis facing Egypt, which is starkly evident in the tumbling value of the Egyptian pound against foreign currencies, particularly on the black market. As part of its efforts to tackle this crisis, the government has sought to attract overseas capital, and argues that selling desert real estate to foreigners is one way of attracting foreign investment.
Egypt’s economic crises are not new. The country’s economy has been stagnant since the rule of former Egyptian President Anwar Sadat in the 1970s. While it underwent various further crises during the rule of President Hosni Mubarak, the collapse it has witnessed under President Sisi is unprecedented.
The passing of the amended Desert Lands Law comes coincides with two major regional developments, which raise major questions:
• The ongoing war in Gaza. To what extent did this motivate the Egyptian government to push the law through? How does it relate to the Trump administration’s “deal of the century” and repeated calls by senior Israeli politicians to purge Palestinians from Gaza into the Sinai?
• Saudi Crown Prince Mohammed Bin Salman’s “Saudi Arabia 2030” vision, focused around building the desert city of NEOM. To what extent was the passing of the Desert Lands Law related to the Egyptian-Saudi border dispute over the islands of Tiran and Sanafir?
Deeper Objectives
By opening up to foreign real estate investment in the Sinai, the Egyptian regime appears to be seeking to demonstrate a cooperative stance towards its regional partners. The government had already taken radical moves such as displacing more than 150,000 residents of the Sinai districts of Rafah and Sheikh Zuwayd between 2019 and 2023. It also ceded the islands of Tiran and Sanafir to Saudi Arabia under a June 2017 “Maritime Border Demarcation Agreement”. The authorities are also close to completing the construction of a new city near Rafah, whose true purpose remains unclear. There are also reports that the Rafah crossing with Gaza could be moved westwards into Egyptian territory.
In this context, the amended law on foreign ownership of desert real estate confirms that the government and parliament are facilitating a kind of internationalization of the Sinai. The situation is even more serious given the religious importance of Sinai for the Israeli religious right. Israeli Jews may seek to buy property in Sinai via other investors, such as Emiratis, or using European or American passports.
President Sisi has in the past made exceptions to the 1981 law to allow Gulf citizens and officials, including the King of Bahrain, to buy land in Sinai, according to anonymous sources. The same sources say that the Egyptian government sees Sinai simply as a barren desert where foreign investment could help improve the country’s economic situation. This stance could easily pave the way to further similar steps.
