A New Capital Worthy of the Pharaohs Rises in Egypt, but at What Price?
By Declan Walsh and Vivian Yee, Oct. 8, 2022, NY Times

CAIRO — Sprawled across a patch of desert four times the size of Washington, D.C., a showy new capital is rising in Egypt, imperial in scale and style, embodying the grandiose ambitions of President Abdel Fattah el-Sisi and his mantle as the country’
s unchallenged ruler.

The new administrative capital just outside Cairo encompasses Africa’s tallest building, a crystal pyramid and a vast, disc-shaped palace for Mr. el-Sisi inspired by the symbols for an ancient Egyptian sun god. Six years in the making at an estimated
cost of $59 billion, it is the grandest in a slew of megaprojects being built by a president determined to reshape Egypt.

Eight-lane highways swoop across the crumbling streets of Cairo, skirting ancient tombs and the pyramids of Giza. Giant bridges, freshly built, span the Nile. A new summer capital gleams on the Mediterranean coast, just outside the city of Alexandria.

The projects, mostly constructed by the country’s powerful military, make Mr. el-Sisi the latest in a long line of Egyptian leaders, stretching back centuries, who have sought to mirror their authority in imposing structures that rise from the desert.

But as Egypt limps through a dire economic downturn, its finances dangerously strained, increasingly loud doubts are emerging about whether the country can afford Mr. el-Sisi’s grandiose dreams. ‌In the past six years alone, the International
Monetary Fund has given Egypt three loans totaling about $20 billion, even as American aid kept flowing in. Even so, the country is once again in trouble.

The president is “borrowing money from abroad to build a massive city for the rich,” said Maged Mandour, an Egyptian political analyst. But poor and middle-class Egyptians are paying the price tag for the megaprojects through taxes, lower investment
in social services and subsidy cuts, even if the economic rationale for the developments is questionable, he added.

Although the financing for the new projects remains opaque, they are funded in part by Chinese capital as well as high-interest bonds that will be costly for Egypt to repay in coming years. Some Emirati developers are also working in the new capital.

Egypt’s finances, overall, were fragile even before Russia invaded Ukraine in February. Mr. el-Sisi had borrowed heavily to fund the megaprojects, as well as billions of dollars in international arms purchases, helping to quadruple the national debt
over a decade.

Egypt is making too little to cover its debts.

Foreign investors have mostly stayed away from Egypt, deterred by the military’s tight grip on the economy. That, combined with a lack of focus on developing domestic industries, has meant the private sector, outside oil and gas, has contracted every
month for nearly two years.

The investment bank Goldman Sachs recently estimated that Egypt needed a $15 billion bailout from the International Monetary Fund to fend off its creditors. Egypt’s finance minister, who confirms that the country is seeking a new I.M.F. loan, says the
actual sum it will receive is much smaller, and diplomats put the amount at $3 billion.

Russia’s invasion of Ukraine sent Egypt’s financial house of cards tottering. As interest rates and food prices soared this summer, public finances became so strained that the government ordered malls, stadiums and other public facilities to ration
their air-conditioning and dim the lights so it could sell more energy abroad.

Now, economists warn, Egypt is one of a handful of countries that run a significant risk of debt default, and even Mr. el-Sisi’s boosters are fretting about the economic pain ahead.

“2023 will be dark and horrific,” Amr Adeeb, a popular television host and longtime supporter of the president, said recently.

As before, Egypt may be saved from disaster by its allies. Saudi Arabia, the United Arab Emirates and Qatar have invested at least $22 billion in the country this year. The United States, which backed an I.M.F. bailout in 2016, provides a steady stream
of military aid.

Though Mr. el-Sisi has faced rare criticism from some of his own supporters over the dazzling megaprojects, he has insisted they go ahead.

But that does not mean his ailing economy can support them.

While the government has promised that the new cities will deliver millions of jobs and urgently needed housing, economists say that a majority of jobs created so far are low-paid construction gigs.

Unless Mr. el-Sisi introduces bigger changes, like loosening the military’s economic grip and jump-starting private industry, they say that the benefits of the new projects will be short-lived.

Ordinary Egyptians, squeezed by climbing prices and plunging living standards, have paid for Mr. el-Sisi’s ambitious projects before. In 2015, he rushed through an $8 billion extension to the Suez Canal that was heralded as the “rebirth of Egypt.”
But it has failed to produce the promised windfall.

The Suez Canal generated $6.3 billion in revenues last year, far below the original government projections of $13 billion by 2023.

The first rumbles of discontent over the latest megaprojects sounded in 2019, when, during rare antigovernment protests in Cairo, demonstrators chanted slogans taunting Mr. el-Sisi’s wife, a reference to some suggestions that she had spent lavishly to
refurbish a presidential palace.

“So what if I have palaces?” Mr. el-Sisi said weeks later, after thousands had been jailed because of the protests. “They are for all Egyptians.”

As the fallout from the war in Ukraine drove up the price of staple foods this year, anti-Sisi hashtags made the rounds on social media, including “hunger revolution,” “leave, Sisi” and “the anger of the poor is inevitably coming.”

A new Egyptian capital was supposed to offer a respite from the fume-choked chaos of Cairo, where the population has topped 20 million.

Though the idea was first dreamed up by Hosni Mubarak, the authoritarian leader who was overthrown in the 2011 Arab Spring uprisings, Mr. el-Sisi has taken it to new heights: A Chinese-built skyscraper called the Iconic Tower soars to 1,293 feet, the
tallest building in Africa.

Tens of thousands of apartments have already been built, although few are furnished or painted, giving the new city the appearance of a vast construction site.

But computer renderings envision verdant boulevards, humming tram lines and the extensive use of digital technology: Some 6,000 cameras will monitor the streets of the new city; the authorities will use artificial intelligence to optimize water use and
waste management; and residents will submit complaints using a mobile app.

Mr. el-Sisi originally promised that the new capital would be funded by foreign and local investors and sales of government land in central Cairo. Egyptian developers, some with links to the military, were pressured by the government to help build it.

But with investor interest flagging, the president announced that the government would pay the military-owned Administrative Capital for Urban Development, the developer which owns and is overseeing the building of the new capital, about $203 million a
year to rent ministries and other official buildings in the new office district. This placed a direct burden on taxpayers.

Mr. el-Sisi insists that Egyptians will thank him one day.

“When we began building new cities, it was said that we are spending a lot of money for no good reason,” he said in February, defending the projects by reeling off the names of impoverished Cairo districts.

“How are they living?” he asked pointedly.

But how many ordinary Egyptians will feel at home in the new capital is debatable.

One afternoon as the city was being built, Mohammed Mahmood, 27, and Omar Shaikh, 28, a pair of construction workers in skinny jeans, stood amid the cranes and dust waiting for a bus home to Sohag, 350 miles down the Nile. With their belongings stuffed
into cloth sacks, they said they doubted they would ever return to the gleaming new city, where the cheapest apartment runs to $80,000, once construction was completed.

“None of this is for us,” said Mr. Mahmood, gesturing first to the marble-fronted buildings, then to a billboard bearing Mr. el-Sisi’s image: “It’s for him.”

Few dispute that Egypt, with its population of more than 100 million growing by more than 1 million annually, urgently needs more housing. But urban planners say Mr. el-Sisi would do better to fix his broken cities than to build new ones.

And the new capital’s cost goes beyond the finances.

Thirsty new cities threaten to suck precious water from the already-depleted Nile, the country’s chief water source. To make way for the new highways that ribbon through Cairo, leading to the new city, builders razed vast patches of trees in the
elegant old neighborhood of Heliopolis.

If nothing else, the new city is likely to become a symbol of Mr. el-Sisi’s increasingly imperialist rule.

Thanks to changes in constitutional term limits that he pushed through Parliament in 2019, Mr. el-Sisi could be in power until 2030, or longer.

A sprawling military complex on the edge of the new city, the Octagon, is seven times as large as the Pentagon — a new palisade of military power many miles from Tahrir Square in central Cairo, where revolutionaries massed in 2011 to overthrow Mr.
Mubarak.

Few predict that Mr. el-Sisi, whose draconian security services ruthlessly suppress any dissent, will face a similar revolt anytime soon.

But as the cost of the new capital rises alongside its mirror-fronted buildings, Mr. el-Sisi will have to face the discontent of Egyptians who resent the gap between his sweeping promises and the gritty reality of their own lives.

https://www.nytimes.com/2022/10/08/world/middleeast/egypt-new-administrative-capital.html

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