On March 23, the world’s attention turned to Egypt as traffic in the strategic Suez Canal was disrupted after the 400-meter container ship, the Ever Given, ran aground in heavy wind. The crisis, which lasted for almost six days until the stranded ship was freed, raised questions not only about the size of the canal—one of the most important international trade routes—and its ability to accommodate large ships and containers, but also about the efficiency and capabilities of the Suez Canal Authority (SCA), which is responsible for managing and running the canal. The situation also calls into question the competency of Egypt’s authoritarian regime and its ability to run the country, which is being tested daily in sectors such health care, education, and transportation.
The Ever Given incident exposed Egypt’s authoritarian failure. The canal, which connects the Mediterranean and Red seas, is considered one of the most important channels around the world. It is the shortest shipping route between Europe and Asia. Approximately12 percent of total global trade passes through the Suez Canal, one million barrels of oil per day, and about 8 percent of liquefied natural gas.
The Ever Given crisis caused many losses to Egypt, internally and externally. First, as one of the most important sources of national income for Egypt, the Suez Canal contributes 2 percent of Egypt’s gross domestic product. According to Egypt’s official data, the annual revenue of the Suez Canal reached about $5.6 billion in 2020, despite the repercussions of the COVID-19 pandemic. Some estimate Egypt’s loss from this Suez Canal crisis as $1 billion. Egypt reportedly seized the ship for weeks after the incident and called the Japanese owner to ask for compensation for these losses.
The incident has greatly affected Egypt’s image globally and raised questions about its ability to provide efficient management of the waterway.
Second, the incident has greatly affected Egypt’s image globally and raised questions about its ability to provide efficient management of the waterway. Hence, it was not surprising that the event provoked an unprecedented number of jokes and memes about the ship and Egypt’s management of the crisis.
Noteworthy was the lack of local news coverage of the ship’s running aground and its aftermath. To be sure, such issues represent a red line for the local press, which does not dare publish news about the Suez Canal that the regime considers to be a matter of national security. The first news about the incident came from the foreign press. In fact, under Sisi’s repressive regime that targets freedom of expression and arrests dissident journalists, it is difficult to obtain accurate information about such emergencies. Ironically, a few days into the crisis, local Egyptian media reported inaccurate and false information that the ship was freed when, in fact, it was still stuck in the canal.
The Egyptian government has attempted to take credit for its economic achievements over the past few years and particularly in the pre COVID-19 era, when the economic growth rate in fiscal year 2018-2019 reached 5.6 percent and the unemployment rate fell to 7.2 percent in FY 2020-2021, according to the World Bank. But a closer look at these numbers reveals that they are deceptive and inaccurate. On the one hand, the high growth rate is not due to the increase in industrial production or the growth of the services sector, which would create more job opportunities for Egyptians. Instead, it is generated mainly from mega projects, implemented by President Abdel-Fattah el-Sisi’s government, which serve a minority of rich Egyptians; these include the New Administrative Capital project that was launched in 2015 at a cost of $45 billion, mostly from foreign loans and investments.
The high rate of economic growth and other positive economic indicators do not trickle down to ordinary Egyptians, who suffer from poor standards of living and face many challenges in the health care, education, and transportation sectors.
On the other hand, the high rate of economic growth and other positive economic indicators do not trickle down to ordinary Egyptians, who suffer from poor standards of living and face many challenges in the health care, education, and transportation sectors. According to numerous reports, nearly one third of Egypt’s 100 million population lives below the poverty line, which is set at about $2 a day. In addition, according to Egyptian official data, the poverty rate in Egypt is still high, having reached about 29.7 percent in 2020; this is despite the decrease from the previous year when the rate was around 32.5 percent. It is thus not a surprise that Egypt witnessed sporadic protests among the middle and poor classes, even in the face of regime repression and intimidation.
Additionally, the gap between the rich and poor is increasing greatly. The middle and poor classes are paying the cost of austerity measures and economic and financial reforms implemented by Sisi’s government over the past seven years in order to obtain aid and external loans, especially from the World Bank and International Monetary Fund. The impact of these measures on ordinary Egyptians has become intolerable because of the decrease in public expenditures, the devaluation of the Egyptian currency, and the high inflation rate.
Over the last few years, Egypt witnessed a steady decrease in foreign direct investment, which reached its lowest level during the first quarter of 2021—it decreased by 33 percent, according to data1 from the Central Bank of Egypt. Perhaps one of the reasons for this decline is concern regarding economic intervention by the military, which creates fears among foreign investors. As is well known, the Egyptian military is a major economic actor, controlling different industries and playing a direct role in nearly all public projects in the country.
Finally, it is important to emphasize that many of the major projects implemented by Sisi’s government are based on external borrowing and loans from foreign countries and international institutions such as the World Bank and the International Monetary Fund. This policy has raised Egypt’s external debt to unprecedented levels, as it recently reached more than $125 billion.
On April 18, a tragic accident occurred in Egypt, in which 11 people were killed and 98 injured when a train derailed in the city of Toukh, north of Cairo. A few weeks earlier, there was another terrible accident when two trains collided near the city of Tahta in Upper Egypt, killing 32 people and wounding about 162 others. Although Egypt has one of the oldest railways in the Middle East, which was established in 1834, the system is one of the most vulnerable and underfunded because there is no official interest in developing it or modernizing its equipment and methods of operation. Sisi was once caught in a video2 expressing this lack of enthusiasm for government investment in the railway sector. Train accidents in Egypt have now become the norm, as hardly a month or sometimes a week passes without an accident in which many innocent people are killed or injured. Although Egypt has achieved infamy for train accidents during the past three decades, these tragedies have multiplied significantly in recent years. According to official statistics, the year 2017 alone witnessed approximately 1,657 train accidents, an increase of about 1,249 from the year before.
Train accidents in Egypt have now become the norm, as hardly a month or sometimes a week passes without an accident in which many innocent people are killed or injured.
Ironically, Sisi’s government is planning to develop a new 1,000-km high-speed electric railway network linking the Red Sea with the Mediterranean Sea, between the cities of Ain Sokhna and New Alamein, at a cost of about $23 billion. This reflects a major flaw in the spending priorities of Sisi’s government: instead of modernizing the existing railways that serve middle and poor classes, billions of dollars will be wasted on a train that only serves the wealthy class.
In addition, the Egyptian government has failed miserably in dealing with the COVID-19 crisis, whether due to the lack of adequate health services for the cases of infection or the failure to provide the necessary support for medical staff. Over 13,000 people have lost their lives to the virus in Egypt, where there are about 223,514 cases of COVID-19, according to World Health Organization data. In fact, there are many doubts about the accuracy of these figures and the public does not trust them because of the lack of transparency of the Egyptian government.
More importantly, the mortality rate due to COVID-19 among medical staff and health service providers is unparalleled. As of April 27, 488 doctors in Egypt have lost their lives to COVID-19, according to the Egyptian Medical Syndicate’s most recent statistics.3 Last January, a tragedy occurred in an Egyptian hospital where four COVID-19 patients died due to a shortage of oxygen in an intensive care unit at El Husseineya Central Hospital located in Al-Sharqiya governorate.
The Egyptian government has also failed to provide vaccines to its people. So far, only 0.1 percent of Egyptians have been vaccinated—a very small number in a population of about 100 million people. It is striking that last year, Egypt received billions of dollars from the IMF to deal with the repercussions of COVID-19. The World Bank also providedmillions of dollars for a project to modernize the Egyptian health system, but no one knows where this money has gone.
Neither Food nor Freedom
When President Sisi came to power in 2014, he promised Egyptians that their country would become prosperous within a few years. However, the current reality shows that Egypt has been facing a number of socioeconomic challenges as evidenced by the deterioration in the most basic services. That happened despite the financial support that Sisi obtained since the coup of July 2013, especially from Gulf Arab states such as Saudi Arabia and the United Arab Emirates, which poured billions of dollars to Sisi’s regime in order to preclude democratic change in Egypt. Since Sisi took power, living conditions have worsened and Egyptians have begun to question his government about the fate of this money, how and where it was spent, and whether or not the average citizen benefited from it. It is thus not surprising that many Egyptians, particularly the youth, are disenchanted with the Sisi government’s failures and are using social media to demand its dissolution.
Like other authoritarian regimes, the Sisi regime attempts to trade freedoms and human rights for development and stability. Sisi has repeatedly asked his fellow Egyptians to be patient and bear the socioeconomic difficulties, promising them a fruitful future. However, seven years into his reign, Egyptians have neither seen meaningful development nor gained personal freedoms and respect for human rights.
Khalil al-Anani is a Senior Fellow at Arab Center Washington DC and an Associate Professor of Political Science at the Doha Institute for Graduate Studies. To learn more about Khalil al-Anani click here