Egypt seeks cash, prestige boost with 'new Suez Canal'

Egypt is set to inaugurate a "new Suez Canal" waterway touted as an achievement rivalling the digging of the original, as it seeks to boost both its economy and international standing.

The ceremony on Thursday, to be attended by foreign dignitaries including French President Francois Hollande, comes just over two years after President Abdel Fattah al-Sisi, the former military chief, overthrew his Islamist predecessor.

Sisi broke ground on the project last August after winning a presidential election on promises of strengthening security and reviving the ailing economy.

The new 72-kilometre (45-mile) waterway, built in less than a year at a cost of $9 billion (7.9 billion euros), runs part of the way alongside the existing canal connecting the Red Sea and the Mediterranean.

It will cut the waiting period for vessels from 18 hours to 11.

By 2023 the number of ships using the canal will increase to 97 per day from the current 49, the Suez Canal Authority website said.

"It sends a message to the public and foreign investors that the government is capable of accomplishing something in a set calendar," Amr Adly of the Carnegie Middle East Center told AFP.

"Since (former president Mohamed) Morsi's ouster the new regime is engaged in a political conflict to prove its legitimacy inside and outside Egypt."

"The ability to accomplish such an economic project is part of cementing this legitimacy."

- Ambitious target -

Sisi set an ambitious target of digging the waterway in just a year despite an initial estimate it would take up to three years.

Officials say the entire funding for the project was raised in six days by selling investment certificates to domestic investors.

It involved 37 kilometres of dry digging and 35 kilometres of expansion and deepening of the existing canal.

Preparations for Thursday's lavish opening are in full swing in the port city of Ismailiya.

Some 10,000 policemen will stand guard across six provinces as Sisi opens the ceremony by joining a naval parade, state media said.

Newly bought French Rafale warplanes and US F-16s delivered by Washington last week will also be on display.

Banners saying "New Suez Canal: From Egypt to the World" have been put up at Cairo airport, and hundreds of Egyptian flags grace the capital's streets.

The opening comes amid a rapprochement between the West and Sisi's regime, although Washington remains critical of the country's human rights situation.

A police crackdown targeting Morsi supporters has killed hundreds and seen thousands jailed.

Militants have killed scores of policemen and soldiers, mostly in the Sinai Peninsula that lies between Israel, the Gaza Strip and the Suez Canal.

In July, the Islamic State group affiliate in Egypt claimed a missile attack that destroyed an Egyptian naval vessel off North Sinai.

Suez Canal Authority chief Mohab Mameesh has declared the new waterway "safe" after conducting a trial run.

- External factors -

The expanded canal is considered a "national project" that aims to revive an economy battered by political upheaval since the 2011 ouster of longtime leader Hosni Mubarak.

It is part of a plan to develop the surrounding area into an industrial and commercial hub that would include the construction of ports and provide shipping services.

The government is aiming for an annual gross domestic product growth rate of seven percent for an economy traditionally driven by tourism and canal revenues.

Tourism has plummeted, however, with last year's 10 million visitors sharply down from 2010 when 15 million foreigners visited Egypt.

The authorities hope the new waterway will more than double Suez earnings from $5.3 billion expected at the end of 2015 to $13.2 billion in 2023.

Mameesh said about a million jobs are expected to be created around the canal over the next 15 years.

Analysts doubt the forecasts.

"There will be an increase in revenues, but are these figures credible?" asked Carnegie's Adly.

"It's not just about the increase in traffic... it's also related to external factors such as growth in global trade itself."

Built 146 years ago, the original canal is one of the world's most heavily used shipping lanes and a key focus of international trade.

Its expansion is a major achievement for Sisi, but Egypt needs many projects to turn around its dilapidated economy, Fawaz Gerges of the London School of Economics and Political Science told AFP.

"The administration will capitalise on this project to showcase economic growth, but it is unlikely to resolve challenges facing the economy," he said.
Source: AFP