British Defence Secretary and MP for Sevenoaks, Michael Fallon, attended the August 6 function for the opening of a new branch of the Suez Canal. Fallon, writing an op-ed in the local Egyptian state paper, hailed the ‘rejection of authoritarianism’ by the régime of Abdel-Fattah el-Sisi, while some 46,000 of the best minds and the most active people in Egypt languish in the régime’s prisons on trumped up charges, in filthy conditions and without medical care. 176 of those are parliamentarians.
Fallon’s hagiography in Egypt’s state paper during in 6 August visit to the Suez Canal tells us how Sisi was about to “unveil a modern wonder”. The new 40m wide lane added onto 35 of the 192 km length of the Suez Canal would allow ships to pass in both directions, and reduce waiting times to 8 hours from the current 18 hours.
The whole exercise had nothing to do with commercial opportunity, but was an attempt by Sisi to shore up his damaged reputation both at home and abroad. His 6 February call for mobs to go the streets in their millions to support a new crackdown on internal ‘terrorism’ as a show of virility to the ‘international community’ at the Davos conference had been met with deathly silence.
The Suez Canal project is now sinking Egypt financially. Shipping demand barely existed for the old capacity of the Suez Canal before its expansion.
Furthermore, the massive $8bn expense of digging out this channel could not qualify as a good long-term investment, in view of the fact that enterprising Chinese carriers are now braving the arctic route in the summer months to cut 13 days off the trip from the Yellow Sea to Rotterdam via Suez. The rush to build the extension to the canal as a PR stunt had seriously deleterious effects.
Mohamed Aly-Hassan of the Kyoto Institute of Technology predicted the collapse of the Egyptian currency, as a result of the unstudied headlong dash to complete the crazy project, on his Facebook page on 18 October 2014.
He points out that in its first phase the project, which had been due to excavate 341 million m3 of earth, hit a snag after just 40 of them, it was discovered that the Suez Canal Authority hadn’t planned for the right sort of equipment to complete the project. This resulted in a doubling of costs, as the equipment had to be hired from foreign contracting companies at exorbitant cost.
Aly-Ḥassan’s prediction was borne out when Egypt Central Bank Governor, Hisham Ramez, said, a year later to the day on 18 October 2015 that the country had run out of foreign exchange as a result of the Suez Canal Project. No sooner had he said that, Ramez was removed from his position and replaced with Tarek Amer, ex-head of al-Ahli Bank and close friend of Gamal Mubarak, the ex-president’s son.
Embarrassed by this outcome to the Suez Canal project, Sisi decided to blame the collapse of the Egyptian currency on Muslim Brother leading figure Hassan Malik, who was arrested a few days ago on charges of currency manipulation.
This accusation flies in the face of the fact that all of his assets had already been frozen by the state, and the 68 companies that make up his commercial group closed, as of 21 January this year. He has more or less house bound since.
Malik had not been arrested with the rest of the Muslim Brother leadership in the hope that pressure could be applied on him to back the new régime and swing public opinion. But his stubborn refusal to bend to the junta’s will has created problems for Sisi.
Malik’s 28-year old son Omar was consequently imprisoned and sentenced to death along with Muslim Brotherhood leader, Mohamed Badie, in order to force the father to the negotiating table. Malik’s response to the new pressure was nevertheless and predictably negative, which infuriated the junta even more.
The collapse of the currency together with the crushingly low turnout in the parliamentary elections, which were unchanged despite personal appeals by Sisi for the population to go out and vote, has resulted in a week of panicky reactions by the Sisi junta.