IN PALACE WALK, Naguib Mahfouz uses the unruly Australian soldier running amok through wartime Cairo as the archetype of the unpleasant (yet unavoidable) foreigner. During the First World War, over 20,000 Australian troops were stationed on what are now the grounds of the Oberoi Mena House Hotel, just kilometers from the Pyramids.

For these young men, taken to an exotic land on the other side of the world, stationed in a desert alongside pyramids, on the edge of the greatest city in the orient, it was indeed a time to remember.

The 1981 Australian film Gallipoli, starring a young, pre-Hollywood Mel Gibson, vividly portrays the adventures of these young men in Cairo. In one memorable scene, a group of soldiers are shown complaining and arguing with a bazaar merchant, accusing him of deviously overcharging one of their compatriots for a Pharaonic souvenir statue (sound familiar?). When he refuses to budge, they proceed to trash his store, realizing only at the end that they had the wrong man — the real culprit was actually a few stores further down the alleyway.

There will probably never again be as many Australians in Cairo as there was during the First and Second World Wars, and the relationship between Australia and Egypt is never likely to be of supreme national importance for either country. For the average Egyptian, Australia is a far-away place with plenty of sunshine, beaches, kangaroos and maybe, for the ambitious, a nice place to work or study.

For the average Australian, Egypt is a far away, sandy place with Pyramids, mummies and the exotic unknown — a holiday destination for the lucky.

There is, however, more than meets the eye when it comes to relations between these two hot, dry, relatively uninhabited countries. Australia made the news here when a 2006 decision to suspend live cattle exports to Egypt amid animal cruelty concerns raised controversy. More recently in Australia, the Egyptian-born Australian citizen Mamdouh Habib has been outspoken in his allegations of mistreatment after being arrested in Pakistan and deported first to Egypt, where he claims he was tortured, before finally spending two years in the Guantanamo Bay prison camp. Habib ran for a seat in Parliament on his release and return to Australia, winning 5% of the votes in the Sydney seat of Auburn.

Mohsen Allam “A win - win situation” — Ambassador Robert Bowker believes Australia and Egypt can benefit from a closer relationship.

On the economic front, Australian company Centamin has literally struck gold in Egypt with its Sukari mine in the Western Desert. It looks set to kick off a major Egyptian gold rush once production begins (see our August 2006 cover story). If successful, Centamin — a relative minnow among the giants of the globally competitive Australian mining industry — is likely to be followed by the likes of Newcrest and Rio Tinto, veterans of Australia’s well-established gold mining business.

“Australia is probably the most active Western country in the mining business in Africa,” says Dr Robert Bowker, Ambassador of Australia in Egypt. Bowker, a Middle East diplomatic veteran of 30 years who has worked in roles in Syria, Saudi Arabia, Jordan (where he was ambassador) and Gaza, believes that the gold sector could change the nature of Australia’s relationship with Egypt.

“The pattern of our trade with the Gulf region has changed dramatically,” continues Bowker. “It has moved away from a focus on commodities (which are still important), into the sale of automobiles, services [and] high-end technologies. [] With Egypt, we are still a relationship based on the commodity trade, wheat predominantly — but even that is changing.

“We look at where we are going with Egypt over the next few years, and with wheat, exports depend essentially on the state of supply. Australia’s wheat crop has dropped by 60% with the drought. We are having real trouble finding wheat to supply Egypt with. The direction we are moving in is going to be shaped more by investment in the gold mining sector.”

Australia’s exploration and development of Egypt’s gold sector will attract further interest from abroad, but the country’s aid activity here could really be an example for other countries to follow.

Australia’s total overseas aid budget for 2006–07 is a considerable $2.46 billion (LE 14 billion). Distributed through the Australian Agency for International Development (AusAID), the overwhelming majority of this money is spent in Australia’s ‘neighborhood’ of the Asia-Pacific.

As is the case with almost all aid-giving nations, Australia prioritizes aid money based on the countries closest and most important to its own national wellbeing — and as a recognized leader in the Pacific region, the bulk of the money goes to places like Papua New Guinea and other needy Pacific islands. The one and only exception to this rule is with Australian aid to the Palestinian people, where Australia makes a small but significant contribution.

With such an approach, Australia’s aid budget to Egypt is obviously going to be low.

“It is modest in the extreme, compared to countries with the larger relationships with Egypt,” says Bowker. The amount is tiny when compared to almost any figure you will read in connection with the aid business: just 30,000 Australian dollars (LE 122,000). Many foreign aid officials would spend as much on hotel rooms and daily expenses in a year.

The miniscule size of the aid amount may prove to be its blessing. By thinking creatively about how to best use such a sum, the Australian embassy has come across what seems to be a useful model for other embassies with small budgets but large ambitions.

The model is simple — use small amounts of money, given as grants directly to local individuals, community groups and NGOs, in ways that will achieve maximum impact in alleviating human hardship. More importantly, by publicizing and promoting the results of these small grants (using the considerable publicity and attention-getting prowess of an embassy and ambassador), they aim to attract the interest of larger donors, who can scale up the projects with more significant funding.

“We want to make maximum impact, identify opportunities to leverage our money into much larger programs,” explains Bowker. He goes on to give one successful example, where an Australian-funded sanitation project in Fustat has been taken on by the Dutch development agency, and expanded significantly with the much greater resources available. Another advantage of the small sums is that they do not come with any of the typical ‘strings’ attached to large-scale foreign aid — there is no requirement to spend the money on goods and services from the donor country (as is the case with much of the aid received by Egypt).

Overall, Bowker is optimistic about the future of the relationship between Australia and Egypt. His years of experience in the region have helped him to develop a clear, coherent vision for what the two countries can achieve together: “Egypt has the people, the human resources and the raw materials. Australia has the experience, and we don’t have the political baggage. [] We come from a different background to most countries. The relationship between our two countries economically and politically is rock solid. We have the sort of connections to the emerging generation of Egyptian business people, technocrats and academics that Egypt is looking for.

“There is an emerging group of people here who could make their fortunes anywhere, in Sydney or Los Angeles. The challenge for Egypt is to keep those people here [and looking at the example of Centamin] Australia has the capacity to work successfully with these people — and it’s a win-win situation.”

THE DIRECT AID Program run by the Australian embassy in Egypt typically funds three to five small projects each year, publicizing the results of each project in order to attract larger-scale funding. Among the projects funded in recent years:

Providing equipment for a center in Alexandria that trains young, low-income women in the skills needed to gain employment as caregivers to the elderly and disabled

Improving the safety, quality and environmental impact of pottery workshops in Old Cairo

Helping 400 underprivileged and disenfranchised women in Old Cairo obtain the official government documents needed to access government services and support

Improving residential health conditions in Old Cairo by installing and improving private latrines et