Egypt opens Suez canal expansion | Middle East | News and analysis of events in the Arab world | DW | 06.08.2015

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Middle East

Egypt opens Suez canal expansion

In a lavish ceremony, Egypt has unveiled an extension of the Suez Canal, which the government says will provide much-needed revenue. But economists are less convinced, as Naomi Conrad reports from Ismailia.

As journalists waited to be shuttled to the banks of the Suez Canal, a group of female police officers took turns posing with the cake, a huge creation of pink and white icing in the shape of a boat.

Below the words, "Long live Egypt," tiny blue waves licked the boat's frosted hull, which carried a picture of Egypt's president, Abdel-Fattah el-Sissi, in sunglasses, solemnly staring into the distance.

The cake symbolized the boat that el-Sissi would arrive on a few hours later for the ceremony marking the opening of a new, 72-kilometer-long (45-mile) expansion to the shipping canal that connects the Red Sea with the Mediterranean.

Major source of income

The extension was completed in just 11 months. The Egyptian government has said the extra distance will allow up to 97 ships to pass through the international waterway each day, potentially tripling revenue from the traffic.

The canal is a major source of income for Egypt and the construction came at a time when the country's economy was only slowly recovering from the impact of the political turmoil that followed the Arab Spring. Increased security after several recent attacks by "Islamic State"-affiliated militants has also weighed on business.

"Work did not take place in normal circumstances and these circumstances still exist," el-Sissi said during the ceremony, which was attended by French President Francois Hollande and Russian Prime Minister Dmitry Medvedev.

Suez Kanal Eröffnung Präsident Abdel Fattah al-Sisi Ägypten

Egyptian President Abdel-Fattah el-Sissi looks on during Thursday's ceremony

Outpouring of national pride

The pomp and circumstance on Thursday of the unveiling included a thunderous display of war planes as the president and several VIPs arrived on the El-Mahrousa, the first ship to pass through the waterway when it was opened in November 1869.

Along the shores of the new lane, throngs of guests cheered and waved Egyptian flags. But the outpouring of national pride belied the frustration shared by many over the cost of a project that, for months, was billed as "Egypt's gift to the world" in a barrage of TV advertisements and billboards.

In a chilly, air-conditioned office overlooking the Nile in central Cairo, Ibrahim Ibrahim El Ghitany, a senior researcher at the Regional Center for Strategic Studies, told DW that the money - some $8.5 billion (7.8 billion euros), raised through bonds sold exclusively to Egyptians and two loans by national banks - could have been put to better use by upgrading infrastructure and developing the country's telecommunications, mining and manufacturing sectors.

Ägypten Eröffnung Suez Kanal 1869

A fleet of ships entering the Suez Canal at its inauguration, November 17, 1869

Too expensive?

El Ghitany, a 27-year-old economist, said the Suez expansion "shouldn't have been put on the list of priorities," given that it might take several years to earn back the money spent on it.

Egypt, a country with double-digit unemployment, needs to create jobs for its rapidly growing population. But the current regime, El Ghitany said, placed the canal at the top of the agenda, "because it serves a political end."

The government of el-Sissi, an army-general-turned-president who came to power after deposing Mohammed Morsi in 2013, he said, was trying to gather the people behind it in one national project.

The Suez Canal's construction 145 years ago ultimately bankrupt Egypt, ushering in a long period of imperial domination by France and Great Britain. Its nationalization by Gamal Abdel Nasser in 1956 is still a source of pride for most Egyptians.

In a small bakery in Agouza, a residential neighborhood in central Cairo, 22-year-old Mohammed told DW that he didn't know much about the project.

"But I think it's great," he said as he turned to serve a customer. At least, he admitted, "that's what the media said."

Ägypten Eröffnung Erweiterung Suezkanal

The extension was completed in just 11 months

No reason to celebrate

A 42-year-old teacher, who asked to remain anonymous, whispered into one reporter's microphone that he, for one, wouldn't be celebrating the canal like so many others.

"I don't know why it's being built. It's useless," he said. It only served el-Sissi, he added, lowering his voice even further. "He wants to be famous, that's why he built the canal."

Some observers, however, are less pessimistic. Angus Blair, a Cairo-based analyst, told DW that the canal might yet turn into a good investment. The expansion, carried out in record time, might have an effect on global business sentiment, he said. It could turn Egypt into a more attractive destination for foreign direct investment, which Egypt badly needs.

Blair pointed to the government's plans to redevelop the whole area around the canal, creating an industrial zone. This could, Blair believes, lead to the development of manufacturing hubs, "but that will take some years to come to fruition."

Basically, he added, time would tell whether the canal was really a good investment - or not.

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