This paper examines the alternatives to Egypt’s Suez Canal and the geopolitics related to these trade routes. Geopolitics is the main determinant in developing any trade route or alternatives to the existing trade routes. After the Ever Given blockage in March 2021, the voices that were silent for some period again dominated the international media. They demanded that alternatives to the Suez Canal must be developed to minimize such incidents.
Russia has started promoting its Northern Sea Route (NSR) as a more feasible and less costly alternative to the Suez Canal. On the other hand, Israel has also started working on its Ben-Gurion Canal. These two alternatives are in competition with the Suez Canal. This paper analyzes the possibilities of the NSR and the Ben-Gurion Canal becoming a part of the world’s trade route and the related politics associated with these two alternatives.
After the Abraham Accords, Israel has an opportunity to develop its canal because now it has developed friendly relations with most of its Arab neighboring countries. Hence, its canal will not receive as much opposition as it faced in the past. On the other hand, the Northern Sea Route is being developed by Russia; China is helping Moscow in its development, mainly because of its interest in developing this alternative due to the Belt and Road Initiative (BRI).
This paper also provides a way forward for the Egyptian government and the Suez Canal administration to maintain the relevance of the Suez Canal in world trade.
Keywords: Suez Canal, Northern Sea Route, Ever Given, Ben-Gurion Canal
The Suez Canal is a man-made canal that connects the Mediterranean Sea to the Indian Ocean through the Red Sea. The Suez Canal is 193 km long and it makes possible a direct route for shipping between Europe and Asia, which effectively allows passage from the North Atlantic to the Indian Ocean without any need to circumnavigate through the African continent.
The canal is important for the world’s sea trade and the Egyptian government. The Suez Canal is the shortest link between the east and the west due to its strategic geographic location; it is a significant international navigation route joining the Mediterranean Sea at Port Said and the Red Sea at Suez. The unique geographical location of the Suez Canal makes it vital to world trade and to the Egyptian economy as well.
The significance of the canal has been growing with the evolution of maritime world trade. Maritime trade and transport are the least costly means of transport. So, more than 80% of the world trade is done through the seas. The Suez Canal route increases saving in terms of distance between the ports of the north and south of the canal, and it also saves time, fuel consumption, and shipping costs.
The Suez Canal is a waterway from which about 12% of world trade passes throughout the year. According to the reports published by the Suez Canal Authority (SCA), around 18,880 ships traveled through the passageway in 2020, carrying more than 1 billion tons of cargo (Martin, 2021).
Suez Canal is the longest canal in the world without any physical barriers. The incidents related to shipping and trade are very limited in number as compared to the other waterways. Navigation through the Suez Canal occurs day and night. The canal is capable of being expanded and deepened further when required, to adapt to the changes in the development of ship sizes and tonnages.
Furthermore, the Suez Canal has adopted a system known as the Vessel Traffic Management System (VTMS)—a system depending upon the most up-to-date radar network—through which vessels can be monitored and followed on every point of the Suez Canal and emergency measures can be taken in odd situations (“Why Suez Canal,” n.d.).
In March 2021, a cargo ship called “Ever Given” blocked the Suez Canal which cost around $9.8 billion to the world trade, each day. This sparked a debate over the development of other alternatives to the Suez Canal to prevent any such damages to world trade in the near future.
There are different alternatives to Egypt’s Suez Canal which include the Northern Sea Route, the North-West Passage, the Ben-Gurion Canal, the Panama Canal, and the sea route passing through the African continent. However, our paper has focused on the most preferable and shortest alternatives to the Suez Canal. This paper has focused on two alternatives: the Northern Sea Route and Israel’s Ben-Gurion Canal.
Northern Sea Route (NSR)
A possible alternative to Egypt’s Suez Canal is the Russian Northern Sea Route. When the Suez Canal blockage occurred in March 2021, Russian analysts started propagating the agenda that the Northern Sea Route can swerve the Suez Canal trade to it which is more feasible than the other alternatives. They propagated the idea that it is in the best interest of the great powers to develop alternatives if they want uninterrupted world trade.
Alexey Zubets, the Director of the Institute for Socio-Economic Research of the Financial Institute under the Government of Russia, argued, “Although the Suez Canal has been the most reliable transportation artery for the world but now its reputation has been shaken, giving an opportunity to not only Northern Sea Route but also to Russia’s inter-continental railway” (Sukhankin, 2021).
Similarly, Mikhail Nenashev, the head of the movement for the public support of Alexei Navalny, said, “This is a signal for world powers that if they do not develop the alternative routes like Northern Sea Route then huge economic losses are likely to occur in near future” (Sukhankin, 2021).
Benefits for States
Now the question arises, why must the states shift towards or choose the NSR over the traditional Suez Canal? What would be the benefits for states for shifting to the NSR? First of all, the main perimeter which states look for is the shorter distance. The traditional trade route from China to Norway is 21,000 km long and it takes 48 days to complete the voyage. If the same destinations are reached through the NSR, then the total distance between them is 12,800 km, covered in 35 days.
So, after the cost-benefit analysis, the states will most probably choose the NSR because the time, distance, and cost are much lower as compared to going through the Suez Canal. The time constraint, millions of dollars in savings, and less environmental pollution caused by ships are some factors that can propel states to choose the NSR.
For example in August 2010, the first high tonnage vessel from Murmansk to China used the NSR and saved 22 days as compared to the time taken by Egypt’s Suez Canal. Similarly, in 2009, a non-Russian commercial vessel used the NSR when it was going from South Korea to Norway, and saved $300,000 (Blunden, 2012).
Who Will Control the Trade Passing Through NSR?
Russia will control the world trade passing through the NSR; there are many reasons for this. As it is clear that Russia controls the whole NSR, from Novaya Zemlya of Kara Sea to the Bering Strait, and the NSR lies within the internal waters of Russia then, unmistakably, Russia would have influence over it (L.G., 2018). Russia has developed 7 military bases across the coast of the NSR and has deployed modern radars and aircraft carriers. All of these military installations are not just for strategic purposes but also for having oversight over all the world trade (The Moscow Times, 2021).
The problem with the NSR is the ice which is there for almost half of the year and if the states want to trade through the NSR then they need ice breakers to make their voyages feasible and free of impediments. Russia has the largest fleet of nuclear icebreakers in the world and these icebreakers are required for moving out of ice blockages.
Now, if Russia has all the means by which states can easily pass through the NSR then it is absolutely clear that states would need to be on good terms with Moscow. Otherwise, it wouldn’t be possible for these states to enjoy a safe passage. Moreover, trade involves disputes, and to solve disputes states need diplomacy. In diplomacy, states having some advantage use their influence to get desired outcomes. So if disputes emerge within the trade passing through the NSR, Russia will use this leverage to affect the geopolitics.
The Role of China
China is a possible and great ally of Russia in developing the Northern Sea Route. China wants to make this NSR a part of its historical Silk Road under its project Belt and Road Initiative and considers it a crucial part of its Polar Silk Road (Guo & Wilson, 2020). China has publically claimed that it is interested in doing business and is ready to cooperate with Russia to develop the NSR.
In November 2010, the Sovcomflot (Russia’s largest shipping corporation) signed an agreement with the Chinese National Petroleum Corporation to coordinate their efforts in developing the Northern Sea Route. It is in the best interest of China because of the fact that most Chinese trades go to Europe and once the Northern Sea Route gets developed, it will decrease a major cost of shipping for both China and Europe.
Now in May 2021, Russia has also become the chairman of the Arctic Council. This has threatened other members of the Arctic Council. They believe that Moscow will use this leverage to develop such rules and norms that suit its interest in the Arctic and will hamper the interest of other partners. China is also an observer in the Arctic Council.
Both states can use this opportunity to develop the Northern Sea Route as a major world shipping route. China also possesses short-range nuclear ice breakers and is working on developing long-range nuclear ice breakers which means China has serious ambitions in developing the NSR and extracting maximum benefits.
There are some hurdles in the development of NSR as a world trading route. Chief among these is ice which is present throughout the NSR for 6-8 months in a year. But climate change is solving this issue. The temperature in 2020 broke the records of the highest temperature. If climate change continued this way then this ice problem will eventually be solved.
Another issue is the conflicting claims of the US and the European Union (EU) over the Bering Strait (Blunden, 2012). They claim that the NSR passes through the international straits so Russia cannot own the entire NSR but on the other hand Moscow claims the entire NSR as their own. This can be the point of tussle between these global powers. If the US and EU are in conflict at a particular place and are against its commercial importance then the commercial attractiveness of the NSR will erode.
Ben-Gurion Canal is an Israeli project backed by the US to replace Egypt’s Suez Canal which connects the Red Sea and the Mediterranean Sea. The idea of a Ben-Gurion canal as an alternative to the Suez Canal emerged in 1960. The idea of this canal was proposed by Lawrence Livermore in the United States of America. He submitted a memorandum in which he proposed this canal to oppose President Gamal Abdel Nasser’s idea of nationalizing the Suez Canal in 1956.
The memorandum proposed that an alternative is necessary to ensure uninterrupted flow in the Gulf of Eliot. But this was a controversial proposal because it involved the usage of 520 nuclear explosions. This proposal had serious environmental consequences since the radiation emitted by nuclear explosions are hazardous. So this project was stopped because of these environmental consequences and due to opposition by the Arab countries allied with Nasser.
Can It Be a Suitable Substitute?
After the blockage of Ever Given in the Suez Canal, the idea of digging the Ben-Gurion Canal again became the headline in news reports. So Israel announced its plan for the canal and started working on it. Furthermore, Israel is proposing a railway network that would be extended to link the Red Sea and the Mediterranean Sea. However, some scholars argue that this rail network will not be a beneficial substitute because the distance will be twice as long as going through the Suez Canal.
Nonetheless, the Ben-Gurion Canal can be a substitute for Egypt’s Suez Canal because the rocky nature of its shores will rarely need any maintenance while the sandy shores of the Suez Canal require maintenance in a regular fashion. The Ben-Gurion Canal will be 100 km longer than the Suez Canal which is 193 km.
A ship estimated to be 300 m long and 110 m wide will easily pass through it. Like the income of Egypt’s Suez Canal, Israel has also predicted an annual income of $6 billion from the Ben-Gurion Canal. The estimated total cost for completing this project will be 16-55 billion American dollars (Frontier India, 2021).
The Ben-Gurion Canal will pose a threat to the commercial importance of the Suez Canal which is quite shorter and unable to provide a feasible passage to larger ships. Israel claims that the routine incidents of Egypt’s Suez Canal provide an opportunity for the Ben-Gurion Canal. The Israeli canal will ensure the continuation of the flow of world trade in a smooth manner.
After the Abraham Accords, Israel has an opportunity to develop its canal because it has developed good relations with the Arab nations. Some economists argue that the Abraham Accords was not a peace treaty; rather, it was an economic agreement that Israel signed with Sudan, UAE, and Morocco. So Israel wants to expand its influence and control the water routes, particularly the gates to the Mediterranean Sea.
After the agreement with Oman, it will be possible for Israel to control the sea routes between the Strait of Gibraltar and the Persian Gulf. Now, the political environment of the Middle Eastern region is in favor of Israel and the Suez Canal blockage has seriously opened a window of opportunity for the Ben-Gurion Canal (Bassam, 2021).
A Deterrent to China
Some argue that the Ben-Gurion Canal is backed by the US to counter the Chinese Belt and Road Initiative. China is working on a project that will construct a train network starting from China to West Asia and this will increase the possibility of China securing more sea routes in the world.
China has discussed with many countries, like Lebanon, and has briefed them about the benefits of this project. The Chinese railway project will ease the transport of goods and services between Europe and China. So, the US wants to build an alternative to counter the Chinese ambitions. But mainly, it would be an alternative to Egypt’s Suez Canal, and other regularities – like countering Chinese aims – are extra benefits.
Way Forward for Egypt and the Suez Canal
The reputation of the Suez Canal and its has been seriously damaged after the blockage of Ever Given. Now it has to ensure the world that it is still capable of ensuring a safe passage. It needs to reassure the world trading community that it has all the abilities to handle the crisis effectively and efficiently. It needs to develop the infrastructure for efficient working like the powerful tugs which can free a blockage.
The Ever Given incident cost Egypt and world trade around $10 billion per day. If such incidents occur again then it is possible that the Suez Canal will lose global clients. It needs to develop its ports and canal according to the changing demands, like increasing the number of containers on even larger ships.
For this purpose, expansion is needed in the Suez Canal as they did in 2015 when Egypt expanded the canal by around 35 km with a total cost of $509 million (BBC, 2015). A similar project is needed to increase the feasibility of passage through the Suez Canal. The NEOM city project of Saudi Arabia can increase the relevance of the Suez Canal to a large extent.
Egypt has invested around $10 billion and this project runs along the Gulf of Aqaba and the Red Sea which will increase the trade passing through the Suez Canal once this project starts. The Suez Canal Economic Zone project by the Egyptian government can further increase its development and capabilities.
Moreover, the Egyptian government will have to lower the trade barriers if it does not want states to adopt the NSR. Since the shipping cost through the NSR is already much lower than the Suez Canal, any further trade tariffs will increase the cost gap. So, this issue must be addressed by the Suez Canal Authority and the Egyptian government if they want to maintain the relevance of the Suez Canal in world trade.
The Egyptian government will also need to develop friendly relations with neighboring and European nations so that they do not choose the Ben-Gurion Canal or the NSR over the Suez Canal. They need to develop quick response teams in coordination with foreign experts to further develop the positive image and capabilities of the Suez Canal.
Egypt’s Suez Canal is currently an important trade route and can maintain its relevance as the most important shipping route if the above-mentioned measures are properly taken. Furthermore, the NSR and the Ben-Gurion Canal have much to work on and till then, the Suez Canal can be the only option for world trade. Although there are other routes like the Panama Canal and the Cape of Good Hope of the African continent, these are all long-distance routes as compared to the Suez Canal.
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