Since the beginning of 2009, the blare of ships' horns passing through the Suez Canal has become less frequent, so it came as no surprise when latest figures showed a drop in canal revenues. The canal, completed by French engineers in 1869, means ships avoid the lengthy trip around Africa to pass from the Mediterranean to the Red Sea. And it provides Egypt with an important source of revenue.
Last January, those revenues fell 20 per cent to 332.4 million dollars, compared to 414.2 million the same month last year. They were also down from 391.8 million dollars in December. Since the global financial crisis began leaving its mark on the growth rate of the economy, the government has stressed that Egypt's banking sector is sound.
In a country where the main foreign exchange sources are tourism, the Suez Canal and exports, there has been a 6-7 per cent growth in the economy over the past three years. But now, both the government and experts believe that growth rate for fiscal 2008-2009 will barely reach four per cent. Thus, economists have been watching Suez Canal revenues closely as a gauge of the effects of the crisis, plus the danger of piracy off the Somali coast.
However, the canal's revenues contribute 3-4 per cent of gross domestic product (GDP), prompting some economists to argue that the canal should not be viewed in the same light as tourism, exports or remittances from Egyptians abroad.
"The effect of the crisis on the local economy should be looked upon as one package. You worry about tourism, you worry about exports, and you worry about Suez Canal," said Rashad Abdou, a professor of Economics at Cairo University. "The fact that the canal's revenues are decreasing is important because it is part of the bigger picture of the negative effect," Abdou said.
Abdou argues that if there is no crisis, canal revenues will not be under the spotlight, "because in other times, when other sectors boomed, they helped pushing growth."
The waterway always had a symbolic importance for Egyptians since it was nationalised by late president Gamal Abdel Nasser in July 1956. "People talk a lot about the canal. They have this misconception that the canal's revenues are the most important source of income for Egypt. I hear people saying if the Suez Canal's revenues were distributed on Egyptians, they would not need anything else," Abdou said.
"Such visibility keeps it under the spotlight, but experts know that alone it does not have a very deep effect,". The canal authority left its transit tolls for 2009 unchanged despite expectations that the global financial crisis would reduce traffic.
The fee structure for the canal depends on the size of a ship, its weight, or its draught. The number of vessels using the waterway was 1,313 in January, down from 1,560 in December and from 1,690 in January 2008. The drop has also been attributed to the threat of piracy off the Somali coast - but Abdou does not believe this has had any major effect.
"Piracy is just part of the problem. Its effect is very small compared to the effect of the global slowdown. Yet, in times of crisis, even the slight effect of the piracy is felt," Abdou said.
"Shipping company owners think twice now. They say there is the crisis and piracy and some of them would prefer to take the long way around Africa, through the Cape of Good Hope, to avoid piracy in the Gulf of Aden, near Somalia; and by that they manage to escape one side of the problem."