1. News & Issues

What Is Egypt's Suez Canal?

By

Question: What Is Egypt's Suez Canal?
Answer: The Suez Canal is a 100-mile artificial waterway (160 km) connecting the Gulf of Suez and the Red Sea to the south, at the port city of Suez, with the Mediterranean Sea to the north, at Port Said. It was opened to shipping in 1869, when it was just 30 feet deep (9 meters) and 100 feet wide (30 meters). The canal significantly reduced travel time between Europe and East Africa, India, the Far East and Japan.

The Suez Canal's 19th Century Origins

Notions of a canal were first thought out by followers of Socialist French thinker Claude Henri de Rouvray, Comte de Saint Simon (1760-1825). But it was designed by French diplomat Ferdinand de Lesseps, who was close to Egyptian viceroy Muhammad Said Pasha. Egypt was part of the Ottoman Empire at the time. It approved the project, whose cost (the equivalent of $100 million at the time) was borne by Egyptian taxpayers and thousands of underpaid and unpaid workers and peasants forced to labor on the canal. Tens of thousands of workers died on the job.

Once it opened, the canal was administered by the Suez Canal Company, also known as the Compagnie Universelle du Canal Maritime de Suez (The Universal Company of the Maritime Suez Canal). It was administered for 87 years by French and British interests, profiting mostly French, British and other western stockholders. Profits were reportedly so large in 1912 ($27.8 million, the equivalent of $614 million in 2008 dollars), that the company lowered tariffs on shipping. In 1954, the canal's gross receipts added up to $92,730,574.

1956: Abd el Nassser Nationalizes the Suez Canal

On July 26, 1956, Egypt's Gamal Abd el Nasser nationalized the canal in retaliation for the refusal by the United States and Britain to finance construction of the Aswan Dam on the Nile, a project valued at $1.3 billion at the time.

"This money is ours and the Suez Canal belongs to us," he told hundreds of thousands of Egyptians in a speech in Alexandria the day of nationalization, as Egyptian police seized canal company offices in Cairo, across the street from the United States Embassy compound, and at Port Said, Ismailia and Suez. "The Suez Canal was built by Egyptians," Nasser continued, "and 120,000 Egyptians died building it. Thus, we shall build the High Dam our own way."

Broken American Promise

The United States had initially promised Nasser $70 million to help build the first phase of the dam. The World Bank, controlled by the United States, had pledged a $200 million loan for the second phase. The pledges fell through when the United States declared, somewhat arbitrarily, that Egypt would not be capable of carrying the project to completion.

In reality, the United States was punishing Egypt for its arms deal with the Soviet Union as well as its refusal to join United States-led efforts to align Middle Eastern countries against the Soviet Union.

The Second Arab-Israeli War

Nationalization incensed the French and the British, whose citizens were the chief stockholders in the Suez Canal company. Independently of the United States, France and Britain began military plans to retaliate against Egypt, massing troops on Malta and elsewhere. Then the two countries invited Israel to join the plans. On Oct. 29, 1956, Israel attacked, capturing most of the Sinai Peninsula and the Gaza Strip. Dwight Eisenhower, fresh from his reelection as president of the United States, pressured France and Britain to withdraw their troops, which they did--ending British and French colonialism in the Middle East.

That did not ingratiate America in Arab eyes. As Milton Viorst writes in Storms from the East ,[blocquote shade=no] Washington seemingly failed to grasp the damage done by the Suez attack. In continuing to demand that the Arabs choose the West over Russia, it took a righteous gamble, and, measured by the response of the Arab masses, it lost. Woodrow Wilson had long ago abdicated his place as a hero among Arabs. Suez confirmed America, in Arab eyes, as the heir to the Western imperial tradition. Even today, with the Cold War long over, America has not reversed that perception.

The Suez Canal Today

The Canal is now 590 feet wide at its narrowest point and 53 feet deep. Some 20,000 ships pass through annually, earning Egypt $1 billion in 1987 and $2.57 billion in 2003.

  1. About.com
  2. News & Issues
  3. Middle East Issues
  4. Countries
  5. Egypt
  6. What Is Egypt's Suez Canal - History and Politics of Egypt's Suez Canal

©2014 About.com. All rights reserved.