Second, these projects serve as a tool of power projection and consolidation of support among regime supporters. The most notable example of this is the extension of the new Suez Canal, which was promoted as an essential alleviation of the economic crisis.
In 2014, the head of the Suez Canal Agency, Muhab Mamish, claimed that the expected revenues are forecasted to reach $100 billion a year. To place this number in perspective, the total size of the Egyptian economy at the end of 2018 reached $249 billion, and the total revenue of the Suez Canal for the same year reached $5.7 billion.
Regime propaganda and empty promises
The Suez Canal extension was mostly financed by the issuance of local bonds, in September 2014, with a 12 percent interest rate. A promotional campaign portraying economic participation as a patriotic duty accompanied this. The project did not deliver the expected benefits, with the revenues of the canal falling in the first few years.
Prior to the extension, earnings were $5.5 billion in 2014. In 2015, the revenue declined to $5.1 billion, and $5 billion in 2016, bouncing back in 2018 to $5.5 billion. The project failed to generate enough revenue to meet the loan instalments forcing the Finance Ministry to repay $600 million, since the Suez Canal Agency did not have the necessary reserves.
Still, president Sisi declared in a June 2016 television interview that the purpose of the $8 billion extension was to raise the morale of the people, rather than any tangible economic benefit. The project’s opening ceremony highlighted his efforts. It involved military helicopters and F-16 fighter jets flyovers, President Sisi in full military attire and the attendance of a number of heads of state. A spectacle aimed at displaying the power and grandeur of the regime.
Similar vanity projects include the Rod El Farag suspension bridge, which President Sisi opened on 15 May 2019. The military’s engineering authority in partnership with the Arab Contractors, a local construction company, built the bridge. A media campaign promoted the bridge as the largest suspension bridge in the world, as an accomplishment that is the "talk of the world".
The largest mosque and church in the country are another example and so is the New Administrative Capital, which Sisi inaugurated in January 2018. The opening of the church was hailed as "vital" for the Coptic community in Egypt. In addition, the mosque was named Al-Fattah Al-Aleem, in a reference to the president. Similar plans include the tallest tower in Africa and the largest museum in the world dedicated to a single civilisation, dubbed "The Grand Egyptian Museum". The museum cost $1 billion and is expected to open in 2020.
Vital? For the Coptic community maybe, but Egypt faces a number of pressing infrastructural needs, such as a revamp of the out-dated and underserviced railroad systems. In 2017 alone, the rails recorded 1,657 accidents, an increase of 33 percent in recent years
Although some of these projects are likely to have some benefits, Egypt faces a number of pressing infrastructural needs, such as a revamp of the out-dated and underserviced railroad systems, which carry an average of 1.4 million passengers daily. The most recent allocation for the railway was 300 million Egyptian pounds ($18 million), while the annual required investment is estimated to be 10 billion pounds ($602 million). In 2017 alone, the rails recorded 1,657 accidents, an increase of 33 percent in recent years.
The challenge these mega-infrastructure projects present is that they are often pursued in lieu of projects that would bring tangible economic improvements and raise the standard of living of the average Egyptian. Poverty rates have risen from 27.8 percent in 2017 to 30.2 percent in 2018. The increase in the average Egyptian’s economic hardship is exacerbating the country’s ongoing economic and social crisis.