CAIRO - As Egypt struggles to emerge from a period of deep financial uncertainty; government officials are looking towards the country’s vital shipping artery — the Suez Canal — as a major source of revenue and jobs.
Officials from several government ministries have announced massive public-private partnerships aimed at developing the region. The hope, they say, is that this waterway connecting Asia’s economies to the West could evolve into a high-tech logistical hub, with a thriving commercial and urban center growing out of the surrounding barren landscape.
Since the 1990s, the government has been implementing an ambitious plan for financial and economic reform in the Suez Canal region. Under former President Hosni Mubarak, this largely meant enhancing investment incentives to attract Arab and foreign investors. But, despite almost two decades and billions of pounds invested in infrastructure east of Port Said and the northwest Suez Gulf economic and industrial zone, residents in the area have seen little real progress.
Earlier this month, the ministries of housing, industry, investment and transport met to discuss the development of what they call the “Suez Canal Axis,” several parcels of land in and around the desert passageway.
“As part of the project, 77,000 acres east of the Suez Canal will be reclaimed,” said Mostafa Madbouly, head of the General Organization for Physical Planning (GOPP).
The projects, which include the establishment of a technology university in the Technology Valley in Ismailia, a scientific city in cooperation with international universities, and a medical city in eastern Port Said city, should transform the Suez Canal axis by 2027.
Minister of Housing Tareq Wafiq told the state news agency MENA that, if the projects are completed, they could create about one million jobs in the coming decade.
However, throughout the past year and a half’s political transition, fears of foreign influence have surfaced. The main fear is that Qatar’s financial assistance is designed to gain control over the canal. The Gulf state’s relationship with the Muslim Brotherhood, from which President Mohamed Morsi hails, has come under scrutiny, with some claiming Morsi’s campaign was funded by Qatar. The most outrageous rumors suggest the Muslim Brotherhood group is planning to rent the Suez Canal to Qatar for 99 years.
The Brotherhood’s leadership has strongly denied these accusations, calling the rumors “absurd and illogical.”
Whatever the truth to these rumors, it does seem like Egypt is giving Qatar a significant role in the development scheme. Qatar has been keen to offer financial support to Egypt since Mubarak left office last January. Earlier this month, Qatar also confirmed it would invest $18 billion dollars in tourism and industry projects along Egypt’s Mediterranean coast over the next five years. Among them are $8 billion for gas, power and iron and steel plants east of Port Said and $10 billion for a giant tourist resort on the Mediterranean coast.
It remains to be seen how the government’s plans and Qatar’s dollars will be translated into jobs and improved infrastructure for the residents of Port Said and the Suez region. Mohamed Youssef, president of the Holding Company for Land and Maritime Transportation, one of the companies planning on investing in the project, told Egypt Independent that the project will not be like those under Mubarak, which favored foreign companies over those owned by Egyptians.
Abdul Mageed Matar, maritime transportation expert and former member of the Red Sea Chamber of Shipping, agreed that developing the Suez Canal Axis is of paramount national importance.
He sees many more public and private sector partnerships in the future. Due to the large budget deficit, he said the government will not be able to finance any projects from its own pockets exclusively. However, he had reservations about the government being able to attract foreign investment.
The lack of security is a major obstacle to attracting investment, whether local or foreign, he said, and the current plans ignore the lawlessness in Sinai.
Reda Issa, a researcher and socioeconomic expert, said that such a project should be subjected to extensive social dialogue.
“No group of people should be individually or exclusively able to take it into their own hands to start such a national project,” he said. “After the revolution, we are entitled to know what exactly is going to happen and how, especially given that most economic laws are still the same and no one has tried to address them or change them in any way.”