Official statements in Egypt about a 60 percent decline in revenues from the Suez Canal have renewed questions about Cairo’s options to confront the impact of Red Sea tensions on the canal.
While some experts talked about diplomatic routes, others stressed that the Egyptian effort has limited results due to complex political obstacles that have led to these tensions, mainly the war in Gaza.
Minister of Finance Mohamed Maait, said that the Suez Canal revenues declined by 60 percent.
In recent statements on the sidelines of the spring meetings of the International Monetary Fund (IMF) and the World Bank in Washington, he attributed this fall to the continued tensions in the Red Sea.
Since the end of November, the Yemeni Houthi group has been targeting ships in the Red Sea and Bab al-Mandab region, which it says are “owned or operated by Israeli companies.”
The attacks came in response to the ongoing war in the Gaza Strip, and forced international shipping companies to divert their vessels to the Cape of Good Hope route, despite the increase in shipping cost and time.
The Deputy Director of the Al-Ahram Center for Political and Strategic Studies, Ayman Abdel Wahab said that the political options available to Egypt to confront the Red Sea tensions “depend on maintaining diplomatic moves to enhance stability in the region.”
“Egypt needs to intensify its political movements with all parties to reach an international consensus to enhance stability in the Red Sea, and not just secure the movement of ships,” he said, adding: “Regional and international powers must reduce competition over Red Sea ports and seek a greater level of coordination.”
For his part, Economic Expert Wael Al-Nahas told Asharq Al-Awsat that Egypt’s current options to confront the decline in Suez Canal revenues are to increase exports in all fields to ensure a regular dollar flow.”
In a report issued on Monday, the World Bank indicated that the continuation of the crisis resulting from the Houthi attacks on vessels passing through the Red Sea, and the decrease in Suez Canal transit traffic, “will cause losses of about $3.5 billion in Egypt’s dollar revenues.”
Former Egyptian Foreign Minister and Chairman of the Egyptian Council for Foreign Affairs, Ambassador Mohamed Al-Orabi, said that Egypt had limited options to address the current situation.
He told Asharq Al-Awsat: “Egypt alone cannot deal with the continued tensions in the Red Sea, and any Egyptian effort will have limited results due to the complexity of the political reasons that led to these tensions, mainly the war in Gaza.”
