8 - Dissonant Times: The Land– Infrastructure– Finance Nexus in Post-Mubarak Egypt

Summary

Introduction

In the decade following the Egyptian Revolution in 2011, which saw Hosni Mubarak deposed after nearly 30 years as president, Egypt's state agencies have embarked on a gargantuan scheme to reconfigure the country's territorial and economic geography. Major projects have ranged from the construction of a second navigation canal parallel to the southern section of the Suez Canal to ambitious plans to reclaim 4.1 million acres of land to build 22 new industrial cities, 25 tourist cities, eight airports, and three ports. At the 2015 Egypt Economic Development Conference, Egyptian housing minister Mostafa Madbouly announced a plan to move the nation's capital from Cairo to a new desert city that would host 6.5 million people (reviving proposals floated since the 1970s) and require the construction of over 4,000 kilometres of highways and logistics infrastructure. Infrastructure development and networked connectivity have thus been positioned as central drivers for Egypt's future development. In July 2021, after eight years in office, President Abdel Fattah al-Sisi announced a ‘New Republic’ and the ‘dawn of a modern future’, largely premised on economic growth spurred by infrastructure mega-projects, national social infrastructure initiatives, and purportedly democratic principles (see Naucer, 2022). By the year's end – a decade after Mubarak's ouster – construction and building accounted for 7.7 per cent of GDP, and the real estate ownership and services sectors accounted for another 11.4 per cent, superseded only by tourism (54.7 per cent), the extractive sector (37.5 per cent), and revenues from the Suez Canal (23.6 per cent) (Central Bank of Egypt, 2022).

Egypt's rush towards infrastructure-led development needs to be contextualized in relation to the position of the country's economy in the global market. In the financial year (FY) 2021/22, the Egyptian economy was worth 0.02 per cent (US$404 billion) of the world economy, with imports worth US$72.4 billion and a meagre US$40.1 billion of exports. The Economist Intelligence Unit (2022) rated Egypt's economic structure risk factor at ‘B’ (indicating a high public debt to GDP ratio), rated its sovereign risk at ‘B-with negative outlook’ (indicating high fiscal deficit as a proportion of GDP), and rated its political risk at ‘CCC’ (indicating that the tight control over institutions could pose the risk of social unrest).