How significant is Egypt’s ‘New Suez Canal’ to the world?
The gala event is expected to be attended by VIPs from around the globe
Preparations for the inauguration of the new Suez Canal are being accompanied by a variety of nationwide festivities for a project marketed by the state as the most vital since the High Dam, and the biggest triumph since the 1973 war with Israel.
Main squares across Egypt are decorated, statues are erected at the entrances of canal cities, and the site of the canal is being prepared for a gala event to be attended by VIPs from around the globe.
Meanwhile, TV channels display the countdown to the inauguration as they broadcast patriotic songs, some made especially for the occasion, and host analysts who innumerate the benefits of the canal. Yet amid this jovial ambiance, a few skeptical voices can still be heard, questioning how representative the propaganda is of the actual value of “Egypt’s gift to the world.”
Wael Kaddour, a former member of the Suez Canal Authority, criticized completion of the canal in one year instead of three.
“Cutting construction time doubled the expenses,” he said, referring to the 19.5 billion Egyptian pounds ($2.49 billion) that constitute the total excavation cost.
Kaddour explained the motivation behind the timing thus: “The project was announced at a time of instability and political divisions. A national mega project was necessary to unite Egyptians over a common cause.”
Rasha Qennawi, a member of the Popular Front for the Suez Canal Corridor, said: “Instead of building a new canal, the area surrounding the old one could’ve been fully developed. This is what would really increase economic growth, job opportunities, and the state’s resources.”
Khaled Abdel Fattah, an economic expert and professor of investment, said the project, which he called a “branch” rather than a canal, would not benefit Egypt’s economy. “Talk about increasing the revenue of the canal is incorrect. There’s no relation between revenue and the digging of a branch of the Suez Canal,” he said, adding that revenue is only linked to global trade.
“Only 1-2 percent of global trade passes through the Suez Canal, and the new branch will not increase it.”
Economic expert Mamdouh al-Wali said global trade has been receding in 2015, and this will reflect on revenue. “For example, economic problems in the Euro zone led to a decrease in demand, hence a decrease in imports, and the Ministry of Finance admitted that this is bound to affect Egyptian exports and traffic in the Suez Canal,” he said.
Wali added that from 2009, the number of vessels crossing the canal daily had decreased to 47 in 2014. “This means there was no need for another canal, since the old one isn’t working with full capacity,” which is 76 vessels daily.
Economic expert Fakhri al-Feqi said according to feasibility studies, the revenue of the canal is expected to rise from $5.3 billion to $13.5 billion over the coming eight years. “Global trading is expected to increase by more than 10 percent with the opening of the new canal, because with the digging of another waterway the waiting time of each vessel will be minimized,” he said, adding that the new canal is the first step toward developing the surrounding area.
Adel Amer, chairman of Al-Masreyin Center for Political and Strategic Studies, said: “This is a mega project that isn’t limited to the digging of a passageway. The entire area will be developed, and a vital trade center will be established. Think of the job opportunities this would bring.” Amer added that the new project would allow the Suez Canal to compete with the Panama Canal.
Businessman and economic analyst Hussein Sabbour said the new canal aborted foreign conspiracies against Egypt. “There was a scheme to divert traffic from the Suez Canal, and Egypt had to act quickly,” he said. “Plus, because of climate change a new trade route is expected to emerge in the North Pole in the coming 50 years, so Egypt had to take serious steps toward utilizing the strategic location of the canal.”
Sabbour added that the construction of the new canal, and the presence of dignitaries from all over the world at the opening, will attract investors to Egypt and open the door for more projects that will boost the economy.
Economic researcher Hisham Khalil said the new canal is a mega project that cannot be underestimated. “Constructing the canal in one year is indeed an engineering miracle, and we have to give credit to all those who worked on completing it and accepted such a tough challenge,” he wrote.
The problem, he said, was not the canal itself but the priorities. “The topmost priority of the state should be human beings - their health and education. This is the most important investment” he wrote. “Yet the state seems to care more about publicity.”
Khalil said while the new canal was a major achievement and the state must have meant well when it initiated it, the project could have been postponed until more important problems that require huge funds were solved. “The state acted like a man with 10 children who decided to send one of them to Harvard while the other nine are starved.”