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Fifty years on, Egypt cashing in on Suez nationalization - Daily News Egypt

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Fifty years on, Egypt cashing in on Suez nationalization

Agence France-Presse CAIRO: Fifty years after its nationalization, the Suez Canal is more vital than ever to Egypt s economy and revenues from transit fees look set to continue a spectacular rise. Since the first oil crisis in 1973 and the soaring prices, the economic importance of the canal for Egypt never ceased to grow …


Agence France-Presse

CAIRO: Fifty years after its nationalization, the Suez Canal is more vital than ever to Egypt s economy and revenues from transit fees look set to continue a spectacular rise. Since the first oil crisis in 1973 and the soaring prices, the economic importance of the canal for Egypt never ceased to grow and it has become an irreplaceable source of income, economist Samir Radwan told AFP. Radwan, who heads the Economic Research Forum, stressed that the success of the strategic waterway parting the desert and linking the Mediterranean to the Red Sea had also triggered a boom in surrounding areas. The canal, the 50th anniversary of whose nationalization by former Egyptian president Gamal Abdel Nasser will be marked on July 26, bolstered a rapid development of the Sinai, especially in the south of the peninsula which accounts for 60 to 70 percent of the country s tourism industry, he said. Transit fees alone are the third largest source of revenue for Egypt, the most populous country in the Arab world, after tourism and the remittances of expatriate workers. The volume of traffic going through the canal, a hub for trade between Europe and Asia, has always been considered a barometer of the country s economic health. According to the canal authority, the waterway injects $5.3 million (LE 30 million) of net profit into the state s coffers every day. Receipts have doubled in four years and are still rising steadily. In May 2006, receipts edged to a new monthly record of $324.6 million (LE 1.8 billion), up 42 percent from the same month the previous year. Annual receipts reached $3.4 billion (LE 20 billion) in 2005 and a new record is expected to be set in 2006 on the back of hiked transit fees and growing traffic. If the canal was important when it was first opened, it is much more important now, especially because of the growing dependence of the West on Middle Eastern oil, said Lewis Fischer, a leading maritime expert based in Canada. Radwan said soaring oil prices have boosted Suez Canal receipts but stressed that the adverse effects of a downturn in the oil market would be limited as the waterway would remain a prime conduit for China s expanding trade. The canal is a crucial route for Chinese goods and it will be the same for Indian goods when India experiences its expected economic boom, he said. Experts have also said that increased transit fees on the Panama Canal could also divert more traffic to Suez. But the canal also plays a vital strategic role, Radwan added, citing the countless conflicts that have broken out and are still raging in the Middle East. Scores of military ships, including the U.S. fleet supporting the troops in Iraq, transit through Suez regularly as part of high-security convoys. Egypt s security set-up to protect the jewel of the nation is huge, with thousands of forces deployed all along the canal s 190 km. The strategic value of the canal, whose closure could instantly send world markets crashing, is the main reason why Egypt is not expected to privatize it any time soon. Whether an infrastructure like the canal is operated by a private or public body makes little difference except to ideological zealots, Lewis argued. Jurist Abdel Moneim Al-Sharqawi had been the first in 1987 to put forward a proposal whereby the canal authority was converted into a company, split equally between the state and private shareholders. The sale was to be used to pay off the country s debt. But his idea triggered fierce hostility from leftist and nationalist leaders, intellectuals and the general population, who vowed in unison that Abdel Nasser s feat was not to be undone.

Topics: FJP
https://dailyfeed.dailynewsegypt.com/2006/07/26/fifty-years-on-egypt-cashing-in-on-suez-nationalization/
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