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Egypt suffers the repercussions of attacks in the Red Sea | Middle East, the eternal conflict

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The IMF has collated data illustrating how volumes transported through the Suez Canal have fallen compared to the same period last year. In the photo, cargo ships sail there one after the other. (Archive photo)

Agence France-Presse

More and more ships from around the world are avoiding the Suez Canal due to increased attacks by Yemeni Houthi rebels, a blow for the #x27;Egypt is going through its worst economic crisis, but with limited impact, according to experts.

Data from the International Monetary Fund (IMF) is clear: volumes transported through the canal fell by 35% last week compared to the same period in 2023. At the same time, volumes transiting the Cape of Good Hope off South Africa jumped 67%.

All Maersk ships transiting the Red Sea and Gulf of Aden will be diverted south around the Cape of Good Hope, Danish shipping giant Maersk said on Friday, the day U.S. Vice Admiral Brad Cooper has documented 25 attacks on merchant ships in just under two months.

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Since the start of the war on October 7 between Israel and the Palestinian Islamist movement Hamas in Gaza, the Israeli army has been shelling the small Palestinian territory. To show their support for Gaza, the Houthis, who are part of the pro-Iranian and anti-Israel axis of resistance, are increasing attacks in the Red Sea against commercial ships that they consider linked to Israel.

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Approximately 12% of global trade passes through the narrow strip of sea from Yemen to Egypt, according to the International Chamber of Shipping (ICS).

On December 17, the Suez Canal Authority admitted that 55 ships had been prevented from transiting. Since then, radio silence.

To the extent that the patrols in the Red Sea of ​​the international maritime coalition led by the United States have failed to reassure , players are ready to increase prices, estimates Paul Tourret, director of the ISEMAR Maritime Industries Observatory.

Yemeni rebels claimed to have fired drones and missiles at a US ship on Wednesday after British and US forces said they had foiled the largest Houthi attack in the Red Sea. The British and American armies claim to have shot down 18 drones and three missiles in the Red Sea overnight as part of a complex attack.

On December 31, Yemeni rebels carried out an attack against a container ship of the Danish carrier Maersk, which suspended the transit of its ships in the area for 48 hours.

Shipowners had very low prices due to the slowdown in European consumption. They explain that going around Africa is very expensive, but it turns out it's about the same price, because what they spend on oil, they save on fees. transit fees paid to Egyptians, the expert still assures AFP.

The American think tank Soufan Center lists at least 18 major maritime carriers having chosen to avoid the Red Sea and therefore add around ten days of travel, and as many filling of fuel tanks.

Despite everything, an increase in costs has been absorbed, experts unanimously assure.

Transport costs have almost tripled since the start of the Houthi attacks, notes the Soufan Center, but they remain lower than during the COVID-19 pandemic.

And for Egypt, revenues from the Suez Canal reached 749 million dollars in December 2023, compared to 737 million in December 2022, welcomes the Canal Authority, an immense work inaugurated in 1869 which reported on fiscal year 2022-2023 approximately $8.6 billion.

While these foreign exchange earnings are closely monitored in a country where importers and money changers are now struggling to find dollars, a port official wants to be reassuring: The crisis is temporary and still at an acceptable level, he told the &x27; AFP on condition of anonymity. But its impact will grow if it lasts, he agrees.

In 2015, President Abdel Fattah al-Sissi inaugurated his first megaproject: a new section of the canal intended to facilitate the crossing of ships. It absorbed nearly eight billion euros without, however, allowing a massive increase in revenues, only obtained each year by increasing transit costs.

But canal revenues are only part of Egypt's foreign exchange earnings. Combined with tourism revenue, they represent only half of the country's real windfall: remittances from Egyptian workers abroad.

On the other hand, debt service is exploding: more than 60% of state revenues in 2023 and 70% in 2024, according to the European Bank for Reconstruction and Development (EBRD).< /p>

For Mr. Tourret, canal revenues also serve to keep the lid on the social pressure cooker in Egypt, where two thirds of the population is poor or in the process of being so.

They directly feed the State which reinvests them in the army and social welfare . It's a real shortfall, one month is acceptable, but two months will be worrying, he says.

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