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WORLD> Middle East
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Financial crisis may end boom for Suez Canal
(Agencies)
Updated: 2008-10-20 15:59 Stormy Waters The canal is a source of Egyptian pride: the government nationalised it in 1956 and then defended it against coordinated attacks by Britain, France and Israel.
Egyptian families love to visit Ismailia, which houses canal headquarters, to sit on shaded benches in parks lined with date palms and watch giant tankers pass by. The town's best hospitals and schools, as well as much of its land, is owned by the authority which manages the canal. Residents call it a state within a state. But the canal is also a source of controversy for a government that is friendly with the United States. The political opposition has demanded President Hosni Mubarak's government close it to US warships, especially during the Iraq war, and has tried to use that issue to rally public discontent with Egyptian foreign policy. In March, a cargo ship on contract with the US Navy shot at Egyptian merchants after they approached the ship, killing one and reopening the controversy. The threat of piracy also hangs over future growth. Just south of the canal, heavily armed Somali pirates have stepped up attacks, with one almost every day. Chatham House, the international affairs group, says piracy could drive some ships out of the Gulf of Aden, cutting canal traffic. Other factors will help offset slower trade. The canal has benefited from capacity problems at the Panama Canal, an alternative transit route between the United States and China. Waiting times at the Panama Canal, which is operating at near full capacity, jumped 56 percent in the second quarter of 2008 from the previous year, with ships averaging about 38 hours in the 50-mile (80-km) waterway. "Capacity problems have meant that some cargoes for the eastern United States have come around through the (Suez) canal and the Mediterranean," said Simon Kitchen, senior economist at EFG-Hermes. |
