Interesting
Egyptian tourism will be ok with 'just' the Pyramids. They're one of the biggest tourist destinations in the world.
The real economic effects are going to be food. Egypt has received heavily subsidized American wheat ever since Camp David. Without this Egypt will not be able to fund its own food subsidies, which is going to lead to problems like this:
http://en.wikipedia.org/wiki/1977_Egyptian_Bread_Riots
Also the Brotherhood could be strengthened by this. The Pan-Arabists have failed both to retake the Sinai and the economy is probably heading towards complete meltdown. I think quite a few factions have a reasonable chance of taking power ITTL and Sadat will be really struggling.
That is a good assessment of what
Egypt may struggle to face in the face of this, it didn't help that the
Soviet Union during this time period also exhibited similar problems to the point that they even imported some grains from the
US. However, if this affectively made relations with the
Soviets closer and
US more distant, can't the
USSR just push one of its major agricultural exporting satellites such as
Hungary, Czechoslovakia and even
Cuba to divvy it up for the sake of overall
Communist interests in the region?
Neither party really gives a shit about Gaza.
It is certainly true that
Gaza, especially
Gaza City was and still is considered more of a strategic headache by both
Israel and
Egypt's government. But the I still see if
Israeli territory surrounded
Gaza I wouldn't see the
Israeli government being so readily wanting to destabilize the region, while keeping
Gush Katif as a source of securing the area while providing jobs a higher prerogative.
That means that IOTL's peace with Egypt had relatively little effect on Israel's international relations (at least as far as I know), so no peace won't do a whole lot. Hell, no invasion of Lebanon may even make Israel that much more popular in the world.
It made both countries appear to be good guys who are willing to compromise their interests for the sake of peace and stability in the region. Certainly
Lebanon is a bigger scare for
Israeli perception within
Europe and the
Americas but it was still the
Camp David Accords that created a heightened sense of
Israel as a civilized state that set them up for the PR fall.
@Grimm Reaper
I do agree with you that letting go of the
Sinai created the diplomatic stability and security (barring the
Intefadas) to create an atmosphere needed for international business to more readily accept investing into
Israel that subsequently lead to the economy booming during the
Internet Bubble. This is why I believe keeping the
Sinai would lead
Israel's economy down a similar path to what
Argentina had under
Peronist doctrine with the added bonus of being fairly large arms exporter. I wonder if such a situation of relative isolation would lead to an atmosphere of the
Knesset appropriating funds needed to produce the
IAI Lavi? I'm aware that would be also only possible if the
US DoD,
State Department along with whatever
Congressional Committee for appropriating arms funding wouldn't bat an eye over
Israel's affairs with
Lockheed since they figure
Israel would not be able to produce nor export the
Lavi in sufficient enough numbers to risk impacting
F-16 sales.