Throughout history, the Suez Canal has been the site of power struggles mainly because of its strategic importance. It was a source of disagreement between Britain, France, and Egypt, since Egypt and France’s decision to build the canal had harmed Britain’s position in the area.
A contract was later reached between the major European nations and Egypt over using the Suez Canal, and everyone was granted permission to use it. This convention was soon impacted by the rising wars of the period, and the power struggle between leaders of nations had a significant impact on the Canal’s operation and prestige. Then, in 1956, Egypt was given exclusive control of the Suez Canal.
Location of the Suez Canal
The Suez Canal is the first man-made canal that separates Europe from Africa at the point of the Isthmus of Suez, Egypt. It connects the Asian continent with Europe and Africa. This canal links the Gulf of Suez, Red Sea with Port Said, Mediterranean Sea.
It is one of the world’s critical and strategically important chokepoints. A chokepoint or narrow passage connects two or more areas and is strategically important. It also disconnects the bulk of Egypt from the Sinai Peninsula. The Suez Canal Company controls this canal, but Dubai also has 49% shares.
The canal is almost 193.3 km or 120.1 miles long, with a mean depth of 24 m. There are almost three shallow lakes that are present in the Suez Canal: lake Manzala, lake Timsah, and Bitter lake.
History of Power Politics
Historically, trade routes from Asia to Europe included traveling across the Indian Ocean to Africa, crossing the South Atlantic Ocean, and then continuing to Europe. Britain controlled an important port in South Africa known as Port Cape Town, and because the voyage was long, all the vessels had to stop there, generating much money for the British. However, it used to cost a fortune to trading partners.
Convention of Constantinople
As the canal’s administration was in the hands of the rightful owners, i.e. France and Egypt, the great nations, notably the United Kingdom, were concerned because they too wanted to be one of the canal’s controllers. As a result, on October 29, 1888, all of the leading European nations signed a pact known as the Convention of Constantinople.
The treaty was signed by Germany, Austria-Hungary, Spain, France, Italy, the Netherlands, the Russian Empire, the Ottoman Empire, and the United Kingdom. This treaty ensured the free navigation of these powers on the Suez Canal even during the war.
Wars and the Suez Canal
History is replete with examples demonstrating the convention’s incapability, as we can see how in specific conflicts, it was available to use for one party but forbidden for the other. For example, during the Spanish-American War of 1898, Spain worshipers were not permitted to utilize the canal. Similarly, in the case of the Italian invasion of Ethiopia in 1935 or the Japanese war of 1905, both parties could exploit it.
However, when WWI broke out, the convention became completely effective as Hitler and his Italian allies wanted the rule over the Suez Canal. After battling with the Ottoman Empire in WWI in 1915, Britain gained control of Egypt. So, as Hitler began pushing toward the canal, Britain fought back, and the canal stayed under British control. The British were able to control the Suez Canal only till the 1950s.
Anglo-Egyptian Treaty 1936
In 1936, Britain and Egypt signed the Anglo-Egyptian Treaty of 1936 in London, ending Egypt’s British occupancy after 54 years. According to this treaty, the number of British armed forces in Egypt was reduced and a 20-year military alliance was signed. Egypt was not able to achieve complete sovereignty because Britain could implement martial law in Egypt in the event of an emergency owing to the military alliance.
Suez Canal Crisis 1956
The British wished to renew the Anglo-Egyptian Treaty in 1956. However, Egypt’s then-president Kernel Nasser did not wish to do so because he was more socialist and opposed to Israel’s pan-Arabism. Thus he refused to renew the pact and demanded the removal of British forces.
Kernel Nasser was adamant about nationalizing the Suez Canal, which meant for the canal’s administration to be entirely under Egyptian control rather than the Suez Canal Company. Britain, France, and Israel developed the campaign to respond to Kernel Nasser’s strategy by limiting oil supplies. They also paid Israel to attack Egypt via the Sinai Peninsula, allowing France and British troops to take the canal zone.
On October 29, 1956, ten Israeli battalions crossed the Sanai Peninsula and the Suez Canal to access Egypt. Kernel Nasser emerged as an Arab leader driven by Arab nationalism at the United Nations and opposed Britain. Then, during the 1967 Six-Day War, Israeli forces again tried to take control of the Sinai Peninsula, but Egypt shut the canal, refusing to allow Israel to utilize it.
In 1975, the Canal was reopened. Now, the Suez Canal is working under the Suez Canal Authority of Egypt which was established in 1956 for the independent working of the Suez Canal.
The US’s Plan for the Nuke Canal
The United States intended to build another canal via Israel connecting the Red Sea from Akaba to the Mediterranean Sea. It proposed using 520 nuclear bombs to build a river between the Red Sea and the Mediterranean Sea, but this scheme never materialized. The plan’s memorandum is titled “usage of nuclear explosion for excavation of the Dead Sea Canal across the Negev desert.”
According to some experts, an alternative to Suez Canal would have been precious; with cargo ships obstructing the Suez Canal, the globe would have had another alternative commerce route. However, some academics have condemned it, claiming it to have been hazardous to marine life and the environment.
Global Trade and Suez Canal
Almost 12% of world trade goes via the Suez Canal, and almost $1 trillion in products are exchanged. It is the world’s busiest shipping route. According to estimates, about 19000 ships used the route alone in 2020, which implies nearly 50 ships transited from Suez port to said port or vice versa daily.
According to the Suez Canal Authority, about 1 billion tons of goods passed through this canal in 2019, four times that of the Panama Canal. Suez Canal has a record for transporting nearly 7 to 10% of the world’s oil and 8% of liquefied gas. Container ship capacity has more than quadrupled in the previous 25 years, reaching 220,000 tonnes.
China is also the most frequent user of the Suez Canal, accounting for over 10% of Chinese commerce. The Suez Canal is a location in Egypt where China is investing as part of its Belt Road initiative’s Maritime Silk Road project. China’s access to the Suez Canal, the Gulf of Aden, and the Red Sea are critical to the success of the Belt Road Initiative.
Suez Canal Blockade
A recent incident in the Suez Canal occurred on March 23, 2021, when a 20000 TEU cargo ship was stuck in the canal. It is one of the world’s largest ships that was horizontally stranded for 6 days in the canal. Almost ten tugboats were stationed near the disaster site along with the necessary equipment and specialists to move the ship. The event’s consequences may be observed in terms of economic loss because all vessels could not arrive at the ports on time, affecting the whole supply chain.
Economy and the New Suez Canal Project
Despite being a critical chokepoint in the world, the Suez Canal’s annual income is less than $5 million, since large ships cannot pass through the canal. The Egyptian government has tried to expand and deepen the Suez Canal, but large cargo must still follow the long route around the Cape of Good Hope for commerce.
A proposal for a new Suez Canal or Suez Canal construction project was presented by former Egyptian minister Hassaballah El Kafrawy. According to the chairman of the Suez Canal Authority, this project will be completed by July 2023. This significant development took place after it cost the Egyptian government up to $90 million in missing toll income as hundreds of ships waited to pass through the closed canal or chose alternate routes.
The plan is to build a new canal parallel to the old one in order to optimize the benefits of the present canal. The new canal will stretch from 60 to 95 kilometers. It will surely cut the time necessary to go from one canal to the other while also increasing cargo capacity in the waterways. This project can potentially enhance Suez Canal earnings from $5 billion to around $13 billion.
The construction of the new Suez Canal project is estimated to cost almost $8.2 billion, which equals 60 billion Egyptian pounds. The Egyptian government issued investment certificates worth 60 billion to Egyptians (individuals, firms, and legal entities) through four state-run Egyptian banks. Such initiatives will impact the banking industry and its capacity to finance the private sector in the face of public-sector rivalry.
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