Why Egypt Can’t Afford Its $58B New Capital City Breaking Ground

Egypt’s New Capital: A Mirage in the Desert or a New Dawn?

Egypt’s New Capital: A Mirage in the Desert or a New Dawn?

Amidst an economic crisis, Egypt’s ambitious new administrative capital raises questions about its feasibility and the country’s future.

Over 20 miles east of Cairo, Egypt is constructing a new administrative capital from scratch. The nearly $58 billion plan includes a miles-long central park, a main business district with a Chinese-built tower, and a massive new headquarters for the Egyptian Ministry of Defense, known as the Octagon. But as Egypt faces an economic crisis after borrowing tens of billions of dollars, the feasibility and implications of this ambitious project are being questioned.

This article will delve into the reasons behind the construction of this new capital, the economic implications, and the potential societal impact. It will also explore the role of the military in this project and the potential political motivations behind it.

The new capital is not just a city; it is a symbol of Egypt’s future aspirations. However, with the country’s economic crisis and the significant wealth gap within the population, the question arises: who is this city for? The project has been criticized for being a city for the rich, with the average cost of an apartment starting at around $80,000, while the average household income in an urban community was just over $2,600 in 2020.

The new capital is being built by a company owned 51% by Egypt’s military, known as the Administrative Capital for Urban Development (ACUD). This involvement allows the military to benefit financially from the proceeds of land sales and contract cuts. The project was initially announced in 2015 by President Abdel Fattah el-Sisi, a former general who came to power in a military coup two years after the 2011 revolution.

Despite the economic challenges, the construction of the new capital continues. The project has been criticized for its growing budget, especially as Egypt plays a key role in mediating relations between Israel and Hamas. The cost of the new capital has been constantly changing, with reports today suggesting that the cost of phase one is more to the tune of $58 billion.

There are counterarguments that suggest the new capital could decongest Cairo and create new job opportunities. However, critics argue that the project is a way for President Sisi to distance himself from urban centers and potential revolts. Furthermore, the majority of the funds spent on the project so far have come from public funds, contradicting Sisi’s insistence that the state won’t pay a penny for the new capital.

For the average Egyptian, the new capital represents a distant dream. With double-digit inflation and a depreciating currency, the majority of the population won’t be able to afford to live in the new city. This raises questions about the societal implications of the project and whether it will widen the wealth gap even further.

In summary, Egypt’s new capital is a bold and ambitious project that has sparked controversy and debate. While it represents a vision for a new Egypt, the economic and societal implications cannot be ignored. The project raises questions about the country’s economic sustainability, the role of the military, and the potential political motivations behind it.

As the world watches Egypt’s new capital rise from the desert, the question remains: Is this a mirage in the desert or a new dawn for Egypt?

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