In a decision that sparked huge controversy and objections, the Egyptian Parliament approved a bill submitted by the government that includes amending the Suez Canal Authority’s legislation to allow the leasing and selling of its assets, claiming to contribute to sustainable economic development.
This step raised fears of the possibility of neglecting a shipping lane that the Egyptians consider an expression of national independence, which necessitated government denials and parliamentary clarifications.
For decades, the profits of the Suez Canal provide national income in foreign currency to Egypt, and according to the statistics of navigation in the canal during the fiscal year 2021/2022, the canal achieved the highest annual net tonnage for a fiscal year of 1.32 billion tons, and the highest annual financial revenue of $7 billion.
The spread of the news met with a rapid reaction through communication platforms, as some expressed their fears of the government’s intention to sell the assets of the shipping lane, while others considered it an effective mechanism for developing the authority to maximize its profits.
It was rejected by politicians, parliamentarians, and parties, considering the Suez Canal a red line.
The Civil Democratic Movement (which includes the most prominent opposition parties and figures) rejected the law not only for its economic disadvantages, but also for its political and strategic risks, stressing that this represents a threat to Egypt’s sovereignty over its strategic resources, and would also to threaten Egypt’s national security.
The head of the Socialist Popular Alliance Party, Medhat al Zahed, called for the speedy establishment of a front to defend the Suez Canal.
On the opposite bank, and through more than one televised statement, the head of the Suez Canal Authority, Osama Rabie, tried last Tuesday night to defend the new legislation for the institution he runs, trying to dispel the fears of what the law might carry in neglecting the Suez Canal.
Rabei described the talk about selling the Suez Canal properties after the establishment of the investment fund as completely baseless, stressing that the waterway is “an Egyptian international facility, and no part of it will be sold or any loan obtained against it”.
He attributed the idea of establishing the Suez Canal Authority Fund to President Abdel Fattah al Sisi, explaining that the capital of the fund would start from 10 billion Egyptian pounds (about $404 million).
Last October, al Sisi, during his speech at the economic conference, spoke about the importance of having a huge financial solvency for the Suez Canal Authority, adding that he had ordered the establishment of the authority’s revenue fund while working on its development, and not spending anything except by returning mechanism.
The head of the Suez Canal Authority stressed that the new developments will not affect the income that goes to the state treasury from the profits of the shipping lane, adding that “part of the surplus is what will go to the fund, because the surplus is all we use in investment projects, and financing projects such as the production of green fuel and spare parts for the authority, and the part that remains will be accumulated until it is invested”.
At the same time, Rabie said, in a way that some considered vague: “What is meant by the assets that will be disposed of are the assets of the fund, and they aren’t related to the assets of the Suez Canal Authority”.
Parliament Speaker Hanafi Gebali was forced to address the Egyptians during the plenary session held last Tuesday afternoon, stressing that the waterway is public money that cannot be neglected.
He pointed out that he closely followed the circulating news, saying, “I was appalled by what I saw and heard yesterday – from some affiliated with the educated elite – that the provisions included in the draft law permit the establishment of companies to buy, sell, lease, and exploit the fund’s assets, which is – as they described it – a negligence in Suez Canal”.
Gebali considered what was included in the draft law a natural matter consistent with the nature of funds as a means of financing and investment, and does not directly or indirectly affect the Suez Canal.
Article 43 of the Egyptian Constitution obliges the state to protect, develop, and preserve the Suez Canal as an international waterway owned by it.
It’s also obligated to develop the canal sector as a distinct economic center.
In turn, the official page of the Egyptian Council of Ministers dealt with the crisis as a rumor suggesting that the law is a back door to selling the canal, and conveyed the assurances of the Suez Canal Authority and its management that it will remain wholly owned by the Egyptian state and subject to its sovereignty, and the entire staff of the Canal Authority, including employees, technicians and administrators, will remain Egyptian citizens.
Concerns about the future of the Suez Canal are not limited to the economic dimension, as there are geopolitical, historical and social dimensions related to the Egyptian shipping lane.
Al Sisi failed to manage the economy, and then resorted to borrowing, adding that the loans weren’t used to remedy the failure, but rather to expand in projects that are economically useless, but they are characterized by a dazzling nature, such as the electric train and the new administrative capital.
The new Suez Canal law would be exploited in order to borrow with the guarantee of the assets of the shipping lane, indicating that history repeats itself, adding, “Foreigners seized the assets of Egypt during the era of Khedive Ismail, which was characterized by a policy of borrowing, which led to the occupation of the country in the end”.
The Egyptian authority sells profitable and strategic assets – such as fertilizer and container companies – to foreigners who don’t keep the profits inside Egypt, but rather go out in the form of hard currency abroad.
It is noteworthy that last April, Egypt sold shares in 5 public companies owned by the Egyptian government to the UAE sovereign fund for $ 1.8 billion, and last August, the Saudi Investment Fund acquired shares owned by the Egyptian government in 4 companies listed on the stock exchange, with a value of 1.3 billion dollar.