Seen as a potential driver of economic recovery, Egypt’s plan to expand the Suez Canal has raised hopes the end of the country’s economic crisis may be in sight. But some analysts say as unrest continues, they expect the project may cost too much and take too long to make life better in the most Arab world’s most populous country.
Since the days of the Pharaohs, Egyptians have been building canals.
The Suez Canal, stretching 163 kilometers between the Red Sea and the Mediterranean, opened in 1869, boosting trade between Europe and Asia. The canal now brings in revenue of roughly $5 billion a year.
Officials say the expansion launched last August will nearly double traffic through the canal by adding a section alongside the existing waterway, allowing two-way traffic for part of the canal's length.
But as Egyptians mark the fourth anniversary of violent political upheaval that has included the ouster of two presidents, some say the country is ready for an economic and political recovery.
Amr Moussa, former Arab League head and Egyptian presidential candidate,
says Egypt has elected a president, is preparing for parliamentary elections in the coming months, and the country is ready for development, economic growth, and security.
But violence continues. At least 15 people were killed in protests last weekend.
Canal’s cost-effectiveness questioned
Professor Andrew Lambert, who teaches naval history in the Department of War Studies at King's College in London, says the canal project may not create enough jobs or facilitate enough economic recovery to help the security situation.
“Economically it may be quite attractive for some customers, but I think the cost is going to be the key. Is global shipping sufficiently dynamic to make this a paying return? And the canal itself took some time to pay [for] itself, the original canal, the cost of the project was far higher than it was estimated,” says Lambert.
The original Suez Canal took at least a decade to build, stymied by political disputes, labor shortages and disease. But Egyptian President Abdel Fattah el-Sissi, who launched the project, wants the new waterway to be completed by next August. It is expected to cost $8.5 billion and could double the canal’s annual revenue by 2023.
In the meantime it will not solve Egypt’s immediate need for jobs and national income, says King’s College senior lecturer on Islam Carool Kersten.
“In terms of employment or making a contribution to Egypt’s GDP, in terms of expanding the volume of trade that passes through Egypt, that will then have only a secondary effect, I think, on people’s living standards. So, this is a long-term thing. Not something that will turn around Egypt in the next five to 10 years,” says Kersten.
Insecurity in Sinai may also slow the project further, Kersten says, as militants continue to attack government interests on the peninsula.
Kersten calls the canal project a “grandiose scheme” that may take years longer than expected, but in the end, it may one day, like Egypt’s original canal, help support the nation.