Sisi’s Big Buyoff: A New Egyptian Capital

Plans to build a new capital are an attempt to placate Egypt’s restive population.

Cairo Egypt
Cairo, Egypt at night, January 6, 2012 (Ville Miettinen)

Plans for a new Egyptian capital east of Cairo represent President Abdul Fatah Sisi’s most ambitious attempt to date to placate a restive population that ousted his two predecessors in street protests.

Unveiled at an investor conference in Sharm el-Sheikh on Friday, the new city — yet unnamed — would effectively extend Cairo as far as the port city of Suez on the Red Sea and house five million residents. Egypt’s government departments would move there to relief congestion in what is currently the third most densely populated capital city in the world, after Delhi and Paris. The overcrowded Cairo houses eighteen million people.

The project would also boost employment. A promotional website promises 1.7 million new jobs.

Which are desperately needed. An estimated 75 percent of Egyptians is under the age of 25. Although they are among the most highly-educated youngsters in the Arab world, with some 30 percent of Egyptians attending university, often free of charge, 39 percent of them were out of work in 2013, according to the most recent figures from the International Labor Organization.

High joblessness, the absence of affordable and quality housing, the perceived inability to start a family and general lack of confidence in the future contributed to the 2011 uprising that toppled Hosni Mubarak and posed the most serious threat to Egypt’s army regime in half a century.

Although the revolution was hijacked by the Islamist Muslim Brotherhood — which won the country’s first free elections since the military took power in 1952 — it were tech-savvy young Egyptians who wanted more from the future than the corrupt Mubarak government could offer them that started it.

Sisi knows he can contain the Muslim Brotherhood. As army chief, he overturned the elections, deposed its president, Mohamed Morsi, in 2013 and banned the group — again. (It was outlawed under Mubarak as well.) Probably thousands of its members were arrested and many remain in jail without ever having seen the inside of a courtroom. Sisi was elected president with strong popular support. If Egypt’s secret state can do one thing, clearly it is suppress an organization that made itself unpopular while in power anyway.

The economically illiterate Islamists were even less capable than Mubarak at delivering high enough growth for what is the largest Arab nation. They raised wages for civil servants when the budget was already more than 10 percent in deficit and imposed capital and price controls that drove up inflation, forcing even more Egyptians to turn to the black market for affordable goods. Egypt’s trade deficit exploded while food and fuel supplies were running short

Sisi’s administration has been wiser. It reduced fuel subsidies, which took up a fifth of government spending, and raised electricity prices. It introduced a 10 percent tax on stock market gains and plans to roll out a sales tax later this year. The International Monetary Fund said in February the reforms were starting to produce a “turnaround.”

Billions of dollars in aid from Arab Gulf states have also helped. The monarchies rushed in with cheap loans after Sisi removed the Muslim Brotherhood from power, an organization they despise. Saudi Arabia and the United Arab Emirates need Egypt — which has the world’s twelfth largest army — as an ally and bulwark against the rising tide of political Islam in the Middle East. They promised another $12 billion in investments and deposits on Friday to prop up Sisi’s regime. It is a company from Dubai that would develop the new Egyptian capital.

However, higher employment and growth will only go so far to meeting the aspirations of Egypt’s youth. A shiny new city in the desert could be a symbol of what Egypt can be, or at least the sort of country they want it to be: clean, modern, “wired,” Western.

But it is a tough promise to keep in a country that also has a quarter of its population living in poverty, where, according to a 2013 United Nations study, virtually all women suffer sexual harassment at some point in their lives, where 74 percent of Muslims think sharia law should be implemented and only 2 percent have favorable opinions of Jews. A new capital might be a nicer place to live; it won’t necessarily be a better one.

Sisi may buy his regime time, giving young Egyptians “sustainable” jobs in a “global city” where they can finally start a family. But once they start thinking about the Egypt they want their children to grow up in, will they still be content with a repressive government run by generals and crony capitalists?

Sisi better design his new capital without a Tahrir Square of its own.