Egypt is legendary for autocratic leaders who have sought to cement their leadership by building big–starting, of course the pyramids. During the 1950s and 1960s a modern Egyptian strong-fisted legend, Gemal Abdel Nasser, made a name for himself in the Arab world by nationalizing the Suez Canal and building the Aswan Dam on the Nile. And now Egyptian President Abdel Fattah el-Sisi, who won the May election by a landslide after originally coming to power through a military coup last summer, is apparently trying to step into Nasser’s shoes. Witness: the second Suez Canal.
It’s a bold move. Sisi’s raised $8.5 billion in just over a week in September directly from his people to finance the construction. It’s earned him a powerful propaganda image of citizens flocking to support his policies as some 82% of the investment certificates, starting at $1.40 each, were purchased by individual Egyptians from all walks of life, according to the Egyptian Central Bank. It is no mean feat in a country that has teetered on the brink of bankruptcy and dysfunction for several years.
Sisi’s democratic credentials suffered another blow last month, when his predecessor Hosni Mubarak, deposed by popular protests in the 2011 Arab Spring, was acquitted of the murder of some 800 protesters during his last days in power. Yet what Sisi lacks in his troubled relationship with Egypt’s battered civil society, he is seeking to make up for by rallying the nation behind him to build a massive symbol of unity at a critical moment of strife.
“It’s really the legacy project that el-Sisi is creating for his presidency,” says Alison Baily, a senior Middle East analyst at Oxford Analytica, a U.K.-based global consultancy. “The Suez Canal . . . is very iconic, has a very special place inside the Egyptian national psyche.”
Never mind that ecologists are crying foul: invasive species have already migrated through the canal from the Red Sea to the Mediterranean, ruining local ecosystems as well as tourism and fishing. Work is going full speed ahead–in November Egypt contracted several big German firms to start the heavy-duty boring.
It certainly helps Sisi that this is no pyramid: analysts say that the new canal, by allowing two-way traffic on most of the route, could more than double the flow of ships, and eventually almost triple the $5 billion annual income Egypt receives from the existing Suez Canal.
“In terms of expanding the Suez Canal and helping generate more foreign exchange income . . . it’s definitely something that’s very attractive,” says Bryan Plamondon, a senior Middle East economist at the London-based analysis firm IHS. The Suez Canal played a key role in keeping the Egyptian economy afloat during the past few tourism-starved years, Plamondon says.
“Especially as Asia develops and starts buying more goods and services, I think they would see more goods going back from Europe to Asia,” Plamondon says.
Just as important politically, the construction is expected to generate thousands of jobs and to stimulate economic growth at home. This would help give the Egyptian government breathing room to make unpopular spending cuts demanded by foreign investors.
“Sisi’s broader economic policy [has been] first to make some tough economic reforms, which are necessary to get Egypt back on track for international lending,” says Anna Boyd, Middle East country risk manager at IHS. “But obviously that has implications for the poorer sections of the population so at the same time Sisi needs to stimulate growth and big infrastructure investments are his main strategy for doing this, by the look of it.”
There are limits to big thinking. Sisi recently vowed to accelerate the construction–shortening the original deadline of three years to just one–but analysts say this will be hard to meet, and that the project could take longer to finish and cost more than expected. Egypt remains unstable and its politics can take sharp, unpredictable turns: two of the three presidents who ruled it over the past four years were forcefully removed from power in rapid succession. There is a low-level Islamist insurgency in the sensitive Sinai peninsula near the Suez canal as well as a recent history of labor disputes that could interfere with the work.
“Egypt is not a country that has a name for effective and swift implementation of large-scale infrastructure projects,” says Baily. Making huge plans can buy you time, but eventually you have to deliver.