Discover the fascinating history of the Suez Canal, a vital maritime route connecting the Red and Mediterranean seas, proposed by Ferdinand de Lesseps in 1869. This revolutionary idea aimed to create a shorter shipping path from Asia to Europe while generating income through transit fees.
However, recent disruptions caused by Yemen’s Houthis targeting ships passing through the Red Sea to Suez have forced many vessels to divert south, impacting global trade. Mamdouh Salama, an expert, highlights the increased costs and risks associated with using alternative routes like the Cape of Good Hope.
Uncertain seas
About 12% of global trade relies on the Suez Canal, making its recent closure a significant blow to the economy. Egypt’s investment in expanding the canal’s capacity to accommodate larger ships has faced challenges as revenues plummeted during the COVID-19 pandemic.
How Egypt has done
Despite ambitious revenue projections for the Suez Canal, Egypt’s partnership with the UAE for a megacity project has added financial strain amid declining trade. The canal’s revenues dropped by nearly 25%, impacting Egypt’s economic outlook.
How Israel did
The Houthi attacks have severely impacted Israel’s economy, leading to increased costs and disruptions in supply chains. Israel’s reliance on imports has caused consumer prices to rise, while its aspirations to become a natural gas hub face logistical challenges due to shipping constraints.