ASSESSMENTS

Egypt's Planned Expansion of the Suez Canal Remains Controversial

Aug 21, 2014 | 09:46 GMT

Egypt Pursues Largest Building Project in Modern History
An Egyptian man watches one of the largest container ships in the world, the CMA CGM Marco Polo, sail through the Suez Canal.

(-/AFP/Getty Images)

Summary

Egyptian President Abdel Fattah al-Sisi is overseeing a large-scale expansion of Egypt's Suez Canal infrastructure. The expansion would nearly double the canal's capacity, enabling it to handle approximately 100 vessels a day. The inherited project requires the participation of dozens of local companies — most of which are affiliated with the military — and could create thousands of construction jobs. However, the state of Egypt's economy raises doubts over whether the project can be funded entirely by the government, alongside donations from Egyptian citizens, as al-Sisi intends. The rush to complete the project in one year also raises serious questions about the feasibility of the plans.

The decision to expand the Suez Canal could have far-reaching consequences for global shipping trends and could help stabilize and diversify Egypt's long-term economic profile. The primary goal in the short term will be to address the need for employment: Aiding domestic industry and creating a national project to help unify Egypt's fractured public is preferable to keeping the project on time or within budget.

The ambitious plan for Egypt's largest building project in modern history has serious hurdles to overcome, and risks alienating financial backers in the Persian Gulf. ...

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