Egypt's Foreign Policy Shift from Nasser to Sadat: A Political Economy Perspective (1965–1981)

Egypt's pivot from alignment with the Eastern Bloc to the establishment of strategic relations with the West, spanning from the late Nasser era to Sadat's ascendance to power, represents one of the most significant turning points in the country's contemporary foreign policy. This shift was neither episodic nor confined to a particular historical juncture; rather, it inaugurated a trajectory that has continued to shape the overarching framework of Egypt's foreign policy to the present day. The central question addressed in this article is how Egypt's fundamental foreign policy reorientation during the transitional period from Nasser to Sadat can be explained from a political economy perspective. The main hypothesis posits that the transformation of Egypt's foreign policy during the period under examination was shaped both by structural changes in the international political economy and by domestic political economy dynamics, including state ideology, the interactions between rival political actors, and shifts in the country's economic strategies and policy orientations. Accordingly, this transformation can be meaningfully analyzed within the theoretical framework of political economy. The article argues that the change in Egypt's foreign policy is best understood in conjunction with the evolution of its economic paradigm—from the state-led socialism characteristic of the early Nasser years to the open-door (Infitah) policies adopted in the subsequent period—as well as with broader transformations in the international political economy. Indeed, the termination of three decades of hostility with the Zionist regime and the strategic pivot toward the West were closely intertwined with Egypt's economic liberalization agenda. In the aftermath of this shift, the Egyptian economy became increasingly reliant on external revenues and assistance, tourism, and the expansion of foreign direct investment.

Introduction

Egypt, as the most populous country in the Arab world and a central actor in Middle Eastern politics, has experienced significant transformations in its foreign policy during the second half of the twentieth century. One of the most critical turning points occurred during the transition from the presidency of Gamal Abdel Nasser to that of Anwar Sadat. During this period, Egypt gradually shifted its foreign policy orientation from alignment with the Eastern bloc, particularly the Soviet Union, toward strategic cooperation with the Western bloc, especially the United States. This transformation ultimately culminated in the Camp David Accords and the Egypt–Israel Peace Treaty of 1979. However, this shift was not merely the result of leadership change; rather, it emerged from deeper structural transformations in Egypt’s domestic political economy as well as changes in the international political economy.
Accordingly, this study seeks to explain the fundamental transformation in Egyptian foreign policy during the transitional period from Nasser to Sadat (1965–1981) through the lens of political economy. The main research question is: how can the major shift in Egypt’s foreign policy during this period be explained from a political economy perspective? The central hypothesis argues that the transformation of Egypt’s foreign policy was influenced by changes in both the international political economy and Egypt’s domestic political economy, including shifts in state ideology, the balance among competing political forces, and changes in economic policies and structures.

Theoretical Framework

The theoretical framework of this research is based on the approach of International Political Economy (IPE). This perspective emphasizes the interaction between political and economic structures at both domestic and international levels and seeks to explain how economic forces shape political decisions, including foreign policy behavior. Within this framework, foreign policy outcomes are not viewed solely as the result of security considerations or ideological commitments but rather as the product of complex interactions among international economic structures, domestic political coalitions, state ideology, and economic interests. 
Political economy models of foreign policy assume that governments operate within the constraints and opportunities created by the global economic system while simultaneously responding to internal pressures from social groups, economic elites, and political institutions. Thus, shifts in foreign policy are often closely linked to transformations in development strategies, economic structures, and internal power distributions. In the Egyptian case, the transition from state-led Arab socialism under Nasser to a more market-oriented economic strategy under Sadat provides an important explanatory context for understanding the country’s changing foreign policy orientation. The study, therefore, examines how changes in international economic structures, domestic political dynamics, and economic policies interacted to shape Egypt’s foreign policy transformation during the period under study.

Method

This research adopts a qualitative explanatory approach. The study employs causal analysis to examine the relationship between political economy factors and foreign policy transformation in Egypt between 1965 and 1981. Data were collected through documentary and library-based research methods, including books, academic articles, historical documents, policy reports, and statistical data related to Egypt’s economic and foreign policy developments.  The analysis focuses on several key variables: changes in the international political economy during the Cold War era, shifts in Egypt’s domestic political structure (including state ideology and elite competition), and transformations in the domestic economic structure. By examining these variables and their interaction, the study aims to provide a comprehensive explanation of the gradual shift in Egypt’s foreign policy during the transition from Nasser to Sadat.

Discussion

The findings of the study indicate that the transformation of Egypt’s foreign policy during the period under investigation was the result of a complex interaction between international and domestic political economy factors. At the international level, the evolution of the global political economy during the Cold War, along with the growing influence of Western-led economic institutions such as the International Monetary Fund and the World Bank, created new incentives for developing countries to integrate into the global capitalist economy. For Egypt, improving relations with the United States and Western powers opened the possibility of receiving economic aid, foreign investment, and technological assistance. 
At the domestic level, several structural developments contributed to the shift in foreign policy. First, the state-led socialist economic model implemented during the Nasser era began to face serious challenges in the mid-1960s. Economic stagnation, rising military expenditures, declining revenues following the closure of the Suez Canal after the 1967 war, and increasing foreign debt placed significant pressure on the Egyptian economy. These economic difficulties weakened the viability of the existing development model and created incentives for economic reform.
Second, changes within the domestic political structure and elite coalitions played a crucial role. The transition of power following Nasser’s death intensified competition among different factions within the ruling elite. Under Sadat, a new coalition emerged that included technocrats, segments of the military establishment, and elements of the private sector. These groups favored economic liberalization, foreign investment, and greater integration with the global economy.
Third, there was a gradual shift in the ideological foundations of the state. Nasser’s foreign policy had been strongly influenced by Arab nationalism, anti-imperialism, and socialist development strategies. In contrast, Sadat adopted a more pragmatic and nationally oriented approach, emphasizing Egyptian national interests and economic modernization rather than broader pan-Arab ambitions. This ideological shift facilitated a reorientation of foreign policy toward the West.
The implementation of the “Infitah” (Open Door) economic policy in the mid-1970s was closely linked to these developments. Economic liberalization required access to Western capital, technology, and financial assistance. Consequently, Egypt’s leadership sought to normalize relations with the United States and reduce tensions with Israel. The 1973 war, while initially framed as a military confrontation, ultimately created diplomatic conditions that enabled Egypt to pursue negotiations leading to the Camp David Accords. Thus, economic reform and foreign policy realignment were mutually reinforcing processes.

Conclusion

This study concludes that the fundamental shift in Egypt’s foreign policy during the transition from Nasser to Sadat cannot be adequately explained solely by the change of leadership. Rather, it resulted from broader structural transformations within Egypt’s domestic political economy and the evolving international political economy. Economic crises, the limitations of the state-led socialist development model, shifts in elite coalitions, and the need to attract foreign investment and technology all contributed to the reorientation of Egypt’s foreign policy.
     Furthermore, the research shows that the roots of this transformation can be traced back to the late Nasser era, particularly after the 1967 war, when the economic and political limitations of the existing model became increasingly evident. Sadat accelerated and institutionalized a process that had already begun during the final years of Nasser’s rule. Ultimately, the policy of economic liberalization and the reorientation of foreign policy were deeply interconnected. The normalization of relations with the United States and the peace treaty with Israel provided the international environment necessary for Egypt’s integration into the global economy and for the success of its economic reforms. In this sense, foreign policy during this period increasingly served the objectives of Egypt’s evolving economic strategy.
Ethical Considerations
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Funding
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Conflict of interest
The authors declare no conflict of interest