• Egypt’s President Sisi Touts Megaprojects Ahead of March Vote

    – WSJ
    https://www.wsj.com/articles/egypts-president-sisi-touts-megaprojects-ahead-of-march-vote-1518431400

    By Jared Malsin
    Feb. 12, 2018 5:30 a.m. ET

    CAIRO—For decades Egypt’s presidents, like the pharaohs before them, have used vast infrastructure projects to inspire a sense of national achievement and economic might. But no modern leader has claimed to launch so many in so short a time as current President Abdel Fattah Al Sisi, however meager their actual impact.

    Since the former general came to power following a military coup in 2013, he has decreed the expansion of Egypt’s Suez Canal, ordered a second capital city be built next to Cairo, and initiated a scheme to reclaim more than a million acres of empty desert land. In December, he approved a deal with a Russian state-owned firm to build a $21 billion nuclear plant.

    Ahead of an election in March, Mr. Sisi is now again touting his role in launching massive military-led projects. When he launched his re-electioncampaign last month, he claimed the government had completed 11,000 “national projects” in his brief tenure. That number proved hyperbolic, but even the president’s landmark infrastructure initiatives have done little to defuse the economic discontent that was a key source of political upheaval seven years ago during the Arab Spring.

    Mr. Sisi, second from right, looking last month at mockups of natural-gas-extraction facilities in the northern Suez canal city of Port Said. PHOTO: HANDOUT/AGENCE FRANCE-PRESSE/GETTY IMAGES
    “This is not investment money. This is political money,” said Robert Springborg, an expert on Egypt at King’s College, London. “The long-term consequences of this are very negative for the economy. You think of the waste of resources at a time when the country is in desperate need.”

    Mr. Sisi’s embrace of big but dubious projects won’t cost him the election—Egypt’s security forces have jailed or otherwise sidelined his only credible opponents. But even officials involved in the initiatives say they are designed to create the appearance, rather than the reality, of an economic recovery following the turmoil of Egypt’s 2011 uprising that ended three decades of rule by President Hosni Mubarak.

    Mr. Sisi’s government unveiled the $8 billion “New Suez Canal” in 2015, hailing it as a symbol of national rebirth and Egypt’s “gift to the world.” In a lavish ceremony on the banks of the channel, jet fighters roared past rows of visiting dignitaries alongside the channel now expanded to allow two-way traffic and vastly reduce wait times. The president sailed to the event wearing full military regalia and sunglasses.

    The project’s dividends haven’t matched the hype. In 2015, the chairman of the Suez Canal Authority, Adm. Mohab Mamish, said the expansion would more than double revenue from the channel, from about $5 billion a year then to more than $13 billion by 2023.

    Today, income from the canal remains largely unchanged from 2015 levels. Even then, the Canal Authority’s public claims were contradicted by a never-released internal government study that predicted a decidedly modest 4.8% rate of return on investment for individual Egyptians who bought certificates to finance the project, according to Ahmed Darwish, the former head of the Suez Canal Economic Zone.

    “There were many reasons for that project to be done. It’s not only about the revenue. It came at a time when the president needed to bring back confidence to the Egyptian people,” he said. “The idea of ‘yes we can’ was very important.”

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