What are Cairo’s Options to Confront Impact of Red Sea Tensions on Suez Canal?

An American destroyer in the Red Sea to protect ships from Houthi attacks (US Army)
An American destroyer in the Red Sea to protect ships from Houthi attacks (US Army)
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What are Cairo’s Options to Confront Impact of Red Sea Tensions on Suez Canal?

An American destroyer in the Red Sea to protect ships from Houthi attacks (US Army)
An American destroyer in the Red Sea to protect ships from Houthi attacks (US Army)

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.”

 

 



Half of Yemen’s Population Face Mounting Risks from Climate Change

Al-Garehi Al-Gharbi camp in the Abs district of north-west Yemen. (Norwegian Refugee Council)
Al-Garehi Al-Gharbi camp in the Abs district of north-west Yemen. (Norwegian Refugee Council)
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Half of Yemen’s Population Face Mounting Risks from Climate Change

Al-Garehi Al-Gharbi camp in the Abs district of north-west Yemen. (Norwegian Refugee Council)
Al-Garehi Al-Gharbi camp in the Abs district of north-west Yemen. (Norwegian Refugee Council)

Already suffering from a prolonged conflict as a result of the Houthi coup against the legitimate authority, Yemen is facing mounting risks brought on by climate change, the World Bank warned on Thursday.
Many populations are facing threats from climate change, such as extreme heat, drought, and floods, the WB said in its newly released Yemen Country Climate and Development Report (CCDR).
Stephane Guimbert, World Bank Country Director for Egypt, Yemen and Djibouti said that Yemen is facing an unprecedented convergence of crises — conflict, climate change, and poverty.
He called for immediate and decisive action on climate resilience, a matter of survival for millions of Yemenis.
“By investing in water security, climate-smart agriculture, and renewable energy, Yemen can safeguard human capital, build resilience and lay the foundations for a path to sustainable recovery,” he said.
The WB report said half of Yemenis are already exposed to at least one climate hazard — extreme heat, drought, or flooding — with compounding effects on food insecurity and poverty.
These risks, it showed, are expected to intensify without immediate action and Yemen’s annual GDP could decline by an average of 3.9% by 2040 under pessimistic climate scenarios, largely due to decreased agricultural productivity and infrastructure damage.
Navigating Challenges
Despite these challenges, the CCDR identifies strategic opportunities to strengthen resilience, improve food and water security, and unlock sustainable growth, the WB report noted.
For example, it said, targeted investments in water storage and groundwater management, coupled with adaptive agriculture techniques could lead to productivity gains of up to 13.5% in crop production under optimistic climate scenarios for the period of 2041 to 2050.
The report also spoke about risks to the fisheries sector, considered as a critical source of livelihood for many Yemenis.
Its projections indicate a potential decline of up to 23% in fish stocks due to rising sea temperatures and altered marine ecosystems.

The WB report also said that climate change exacerbates existing health challenges in Yemen, leading to increased healthcare costs and strain on already fragile health systems.
“It is projected that climate-related health issues could cost the country over $5 billion in excess health costs by 2050,” it noted.
“Addressing these challenges requires integrating climate resilience into public health planning, with a focus on vulnerable groups such as women and children.”
Concerning infrastructure, the report said urban areas and critical infrastructure are especially vulnerable, and without adaptation measures, economic shocks will disproportionately affect already fragile communities.
As for the private sector, it has a critical role to play in addressing Yemen’s pressing development challenges, said Khawaja Aftab Ahmed, IFC’s Regional Director for the Middle East.
“Harnessing its potential through innovative financing mechanisms and guarantee instruments and creating a conducive investment climate can help mobilize the climate-focused funding the country urgently needs to build a greener and more resilient future,” he said.
The WB report also said that Yemen also has immense potential for renewable energy, which could serve as a key component of its climate response and recovery.
It showed that harnessing renewable energy resources not only offers a pathway to reduce reliance on fossil fuels but also enables the creation of a more resilient power infrastructure.
“This will be essential in supporting vital services such as healthcare, water supply, and food distribution, particularly in conflict-affected areas,” it said.
Global Coordination
The World Bank highlighted the significant commitments and coordination from the international community to support Yemen in coping with climate shocks and building broader resilience.
It said securing sustainable peace will be required to unlock the financing and take the action needed to build long-term resilience to climate change.
The CCDR then underscored the importance of flexible, risk-informed decision-making to adapt climate actions to Yemen's uncertain political landscape.
Under a “Peace and Prosperity” scenario, it said, a higher level of adaptation can be implemented, yielding greater economic and social benefits.
Yemeni Minister of Water and Environment, Tawfiq Al-Sharjabi, stressed the importance of integrating climate action into development strategies and adapting to climate fluctuations.
The minister was speaking at a special session to discuss the WB report on the sidelines of the 29th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP29) held in Baku, Azerbaijan.
He said the report represents a significant contribution for Yemen in addressing climate change and will facilitate access to various climate financing options amid the structural and technical fragility faced by institutions due to the war.
The report, Al-Sharjabi added, aligns closely with Yemen's urgent priorities, particularly in the areas of water and food security, enhancing livelihoods, and promoting area-based climate adaptation approaches.