Egypt's Generals Want a New Canal

The project could more than double Suez’s current revenue
Photograph by Ahmed Gomaa/Xinhua/Alamy

General Kamel el-Wazeer, the head of the Egyptian military’s Engineering Authority, recently stood on the banks of what he hopes will be a second lane of the Suez Canal. “The entirety of Egypt and the whole world” will benefit from this project, he said, speaking to a small group of journalists on Aug. 19 outside the city of Ismailia, halfway down the course of the existing canal. Trucks carrying earth rumbled behind him. Work had begun a little more than a week earlier and so, for now, the new channel is a dry pit in the desert. A reporter from an Egyptian broadcaster interjected, “A million jobs for the Egyptian people?” The general nodded, “Yes, a million jobs for the Egyptian people.”

President Abdel-Fattah al-Seesi, the former military chief who overthrew an elected Islamist government last year, is touting the new canal as a bold step to reinvigorate Egypt’s economy, which has been battered by political unrest since the 2011 uprising that toppled Hosni Mubarak. Estimated to cost between $4 billion and $8 billion, the project will complement a separate plan to establish a trade and industrial hub on the banks of the existing canal. On Aug. 17, Al-Azhar Grand Imam Sheikh Ahmed el-Tayeb, the country’s highest Muslim religious official, visited the site, declaring it approvingly as “a jihad in the path of God.”

Al-Seesi’s vision is anything but modest. It calls for the digging of a 35-kilometer lane branching off the existing 193-km channel, in addition to deepening portions of the original Suez Canal. Building the second canal will allow two-way traffic and cut wait times. An initial plan developed by the Suez Canal Authority called for completing the expansion in three years, but when al-Seesi announced the project in early August, he surprised everyone by decreeing a one-year timeline. Asked if that deadline was realistic, Captain Mohamed Ibrahim, executive assistant to the Canal Authority chairman, said, “Yes, I guess so. God willing.”

Photograph by Jason Larkin/Panos Pictures

The Suez Canal Authority claims the project will more than double annual revenue from the current level of $5.3 billion a year to more than $13 billion. The expansion would also solidify Suez’s advantage over the Panama Canal. The Canal Authority says it will take slightly less than 26 days to sail from Shanghai to the East Coast of the U.S. via the expanded Suez, but 28 through Panama.

The government has said it has a variety of sources of financing, including Egyptian banks, floating shares, and “Suez Canal certificates,” which will permit ordinary Egyptians to invest in the canal in amounts as small as 10 Egyptian pounds ($1.40). “It’s not very clear,” says Amr Adly, a political economist in Cairo and nonresident scholar at the Carnegie Middle East Center. “If the military is directly financing it, how is this going to happen? Nobody knows anything. We just have questions. We have no answers.”

What is clear is that the canal—the latest in a long line of megaprojects—will cement the Egyptian armed forces’ central role in Egypt’s economy, sidelining other businesses and civilian institutions. “It’s mainly political. The whole thing is very propagandistic. It has to do with the generation of a certain image of al-Seesi and of the new regime,” Adly says. “That does not preclude the feasibility of the project.”

The canal project evokes memories of President Gamal Abdel Nasser, the wildly popular colonel who led the 1952 overthrow of Egypt’s monarchy. Nasser nationalized the canal in 1956, ending nearly a century of control by the Europeans who financed and built it. Taking the canal galvanized the Egyptian public, even more so after it resulted in a failed invasion of Egypt by Britain, France, and Israel.

Egypt’s recent history is littered with military-backed development schemes. Nasser launched a failed agricultural project called Liberation Province. Mubarak famously attempted to reclaim vast portions of Egypt’s desert. The name of that project—Toshka—is now synonymous with pharaohlike economic plans. “There’s an air of unreality to the grand project idea, and it’s remarkably consistent going back to the early 1950s in how the military has thought about the economy,” says Robert Springborg, an expert on the Egyptian military.

How the canal fits into Egypt’s actual economy is another question. “It seems like a good national investment for a variety of reasons,” says Ahmed Galal, a former World Bank economist who was interim minister of finance after the fall of the Islamist government. “The Suez Canal project is—or should be—part of a larger development agenda,” including institutional reforms in education, health, and the energy sector, he says. Angus Blair, president of the Signet Institute, an economic think tank in Giza, is skeptical: “Is it going to lead to the kinds of benefits, for example doubling revenue, that are being talked about? I’m not sure that this alone can justify that.”

“Nasser, [Anwar] Sadat, and Mubarak all had these plans. None of them ever worked,” Springborg says. “After all, Nasser didn’t dig the canal.”


    The bottom line: Economists say the new Suez Canal may make some sense commercially, but it is a project with a political purpose.

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