Economy of Egypt

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Economy of Egypt


To face the challenges of its demography, Egypt has various and decisive advantages. The first advantage of this country comes from its geographical position. Egypt benefits from it through the Suez Canal.


The Suez Canal

Linking the East with the West by reducing by two-thirds the route between Asia and Europe, after having been an old dream of the pharaohs, ends up being concretized by the Frenchman Ferdinand de Lesseps. Inaugurated with great noise in 1869, the Suez Canal is 195 km long, 170 m wide and 20 m deep. It connects Port-Saïd (Bûr Sa'ïd), on the Mediterranean, to Suez, on the Red Sea, through the Amer lakes.

For a long time closed following the 1967 war with Israel, the waterway was reopened in 1975 and again saw three daily convoys of merchant ships circulating. However, it did not regain its level of pre-war traffic. For, during the period when the canal remained closed, the tankers, now forced to make the detour to Cape Town to supply Western countries with oil from the Persian Gulf States, have seen their size increase. Thus the canal recorded its maximum traffic in 1966 with 242 million tons. Tolls then accounted for 5-6% of gross national product and covered about 10% of the country's budget.

In 1978, these receipts only covered 3% of the same budget. Also, in response to this decline in resources, the Egyptian government has resolved to undertake a vast project: The widening and deepening of the canal. They should allow the passage of supertankers in the future from 700,000 to 800,000 tons. Egypt hopes to improve traffic by 50%. Meanwhile, a pipeline linking Suez to Alexandria, which was inaugurated in 1976, offers a subsidiary way to transit heavy oil through the Isthmus.


The human asset

In addition to channel revenues, the Egyptian trade balance also relies on human elements. Tourism first, even if it caps with one million visitors a year. Especially Egypt has a hidden resource, remittances from emigrants.

The Egyptian diaspora is spread widely throughout the Middle East. A strong Egyptian colony works in Libya. Egyptians are also numerous in the countries of the Persian Gulf as well as in Saudi Arabia. The total number of Egyptian emigrants is estimated at least one million. The money they send to the mother country would be double the revenue from the Suez Canal.


The exports

Egypt's trade balance is also based on exports of raw materials. Egypt has significant mineral resources. It is worth recalling first of all the traditional productions, the gold of the Arabian chain, the manganese of Western Sinai and the phosphates of the shores of the Red Sea. In the recent period, a decisive factor has been added to these soil resources: oil. Oil deposits have been found in Sinai and the Libyan Desert. Egyptian oil production is booming. It reaches 35 million tons of crude. The proven reserves available to Egypt are in the order of 400 million tons. Egypt therefore directs half of this wealth to export as long as its domestic industry does not use it.


Industrialization

It is inevitable, the development of Egypt must go through industrialization. In this area, there is still a lot to do.

This change, however, began a long time ago. In the nineteenth century, thanks to the Khedive's resolutely modernist policy, the country received the impact of the West and began to set up factories, particularly textiles, on its territory. At present, Egyptian industry ranks second on the African continent. She can do better.

The diversity of its branches of activity testifies to this. Its textile industry, which alone employs half of the local labor force, is based on a tradition now secular. Other activities complete the old industries sector: food (20% of the labor force) and the cement plant. The development of Upper Egypt saw the creation of a steel industry using iron ore deposits near Aswan. Domestic steel production already exceeds 1 million tonnes. The chemical industry is also a booming branch, linked to the expansion of cultivable land and perennial irrigation, which requires ever increasing fertilizer inputs. Chemical fertilizer factories at Abu Zabal, near Cairo, at Hamrawein on the Red Sea, and in El-Sibaiya near Aswan, must meet this domestic demand.

The recent discovery of a natural gas field in the northern Delta is a positive change in the country's development agenda. The natural gas feeds a new production unit, located in Talkha, which is close to the gas extraction zone. Finally, a modern development policy aims to diversify energy production. Oil, gas, hydroelectricity, electricity of thermal origin, of nuclear origin: not only Egypt covers its needs but it exports energy.

Yet the trade balance remains heavily in deficit. It is true that a significant part of the budget must be devoted to non-productive activities such as defense. However, we can not minimize the reality of the bases of development. Some clues are encouraging. For example, the Egyptian national product is now growing faster than the population.


Recent projects

Egypt caresses projects. And too bad if their excess makes them seem insane!

West of the Nile, Kharguèh (el-Khârdja), lost in the depths of its depression in the heart of the Libyan desert, is the center of the New Valley. This vast development project plans to gain hundreds of thousands of hectares on the desert. Landless peasants have been brought here to live and cultivate these new crops. The industry is not forgotten either. The iron ore extracted from the oasis of Bahriya is shipped to the steel mills in Cairo. While at the other end of the planning area, a phosphate plant is planned in Abu Tartur.

Still in the Libyan desert, but to the north this time, another huge project aims to highlight the Kattara depression. The project plans to desalt the seawater from the Mediterranean and bring it by channel to the depression taking advantage of the fact that the bottom of it is below sea level.

Same story about Sinai. "The Sinai of the year 2000 will be populated by 2 million Egyptians. 1,125,000 hectares of sand will be irrigated in the center and north of the peninsula by means of underground pipes. President Sadat's ambitious plan, announced in 1973, has since been echoed by the most enthusiastic Egyptians. The project includes the extraction of Oum Bogma manganese, its treatment in the Abou-Zénima smelter and the creation of a large oil port at Botran.

Egypt, which has seen the Suez Canal break through, flooding the desert with the Aswan High Dam, does not really know where the reality ends and where the dream begins.


Egypt and the problem of energy

Nasser had promised it. He kept his word. The desert has engendered the sea. The construction of the Aswan High Dam is now changing the natural course of the Nile. The desert of Nubia is drowned under the waters of an immense artificial restraint. It was even necessary to cut the cliff of Abu Simbel to save the masterpieces of the architects of Ramses II threatened by the rising waters. 1,305 blocks, some of which reached 30 tons, a stone-to-stone winding of temples and colossi 70 meters high: it took ten years of work and the assistance of specialists and Unesco dollars to overcome it. even had to raise a dike to contain the rise of the waters of the river, cut the island of Agilkia to the size of that of Philae and transport piece by piece the monuments raised to the glory of Osiris. Thanks to this effort, twenty-four temples of Nubia have been moved. It was the price to pay to create the high dam. To build this dam on the Nile, contemporary Egyptians have been worthy heirs to the builders of pyramids. The dam itself is a colossal achievement. Saad al-'Alï, to give it its local name, is a real monster of granite: 43 million cubic meters, 980 meters thick at the base and 111 meters high; in short, seventeen times the volume of the Great Pyramid of Cheops.

Behind him, Lake Nasser, one of the largest artificial reservoirs in the world, has a capacity of 130 cubic kilometers. If the construction of the structure required the transplantation of 60,000 people - 15,000 were resettled in Sudan, the others in about thirty villages reconstituted near Kom-Ombo - the cultivable area was increased by 200,000 hectares. Because this giant reservoir that stores the waters of the Nile can at will irrigate areas yesterday desert.

This colossal achievement, which rightly ranks among the country's national pride, plays a political role. This dam-reservoir opened to Egypt the means of its agricultural policy, facilitated its agrarian reform and attached the rural masses to the raïs regime. Even if voices are rising among the residents of the Nile.

By breaking the course of the river, the dam interrupted the game of floods and floods that had always punctuated Egyptian life. He destroyed the natural fertilization of soils by silt carried by water. It led to changes in cultivation methods and disturbed the biological balance. But it has allowed Egypt to ensure its energy independence. The high dam alone is expected to produce a maximum of 10 TWh while total electricity production is 18 TWh. Connected with the Delta, the Aswan power plant also supplies a fertilizer plant located in this development zone, as well as the large aluminum factory in Nag-Hamadi. The plant's new production units are partly intended to electrify the proposed development area in the New Valley, west of the Nile.

The production of the high dam adds to that of the old power stations in the Nile Valley. In addition, the energy production drive has led Egypt to diversify its electricity resources. Four fuel-fired power plants were concentrated around Cairo, five near Alexandria and three along the canal.

Electricity of nuclear origin has led to the construction of a power station in Sidi-Kreir, in the Delta, where Egypt is planning the installation of another power station at el-Daba. A third is planned in Hurghada, on the Red Sea.

The discovery of oil in Sinai and the Libyan desert in the 1970s definitely seated the country's energy position. National oil satisfies a large part of Egyptian consumption. It has also become the first export item, even surpassing cotton.

In addition, the natural gas reservoir hit by drilling in the Kattara depression is shipping its methane via pipelines to factories in the suburbs of Cairo.

Aware of the need to develop its hydrocarbon resources, Egypt is increasing its research permits. It is planning the construction on the eastern shore of the Red Sea of ​​a vast complex at el-Tûr, the mushroom city of oil, as well as around el-Arich. Near the latter city will be put into operation a thermal power station supplied with water by reservoirs collecting seasonal rainfall of Mount Sinai.

Already, Egypt is one of the best-endowed countries of the African continent in terms of energy.




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