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EDITIONS
 Sunday, 29 December, 2002, 17:41 GMT
War threatens revenues on Suez Canal
British warship HMS Southampton sails along the Suez Canal
Warships on the Suez
The Suez Canal, Egypt's second biggest source of income after tourism, is looking at a 10% slump in revenues if the US goes to war with Iraq, the Canal Authority said.

Talking to reporters on the announcement of record earnings, the Suez Canal Authority's chairman, Lieutenant-General Ahmed Ali Fadel, said that the decimation of revenues would come in the early stages of any conflict.

What happened after that would depend on how long any military action lasted, he said.

The SCA had drawn up a "security plan to protect the canal", he said, although he was unwilling to elaborate on the details.

Record

The risk to revenues from the canal - which runs from the Mediterranean to the Red Sea across the isthmus between Africa and Asia - would spoil what seems to have been an exceptional year.

The canal earned Egypt $1.95bn in the 12 months to June 2002, up on the previous year.

The performance is only just shy of the $1.96bn brought in during 1993, the best year in the canal's 133-year history.

The boost to Egypt's coffers has come at a good time, too, given that the attacks of 11 September 2001 triggered a sharp fall in earnings from tourism

The country has had its share of bombings and shootings of Westerners in recent years, and the nervousness which followed the New York and Washington attacks rekindled concerns.

Visitors

Tourism is slowly returning to normal now, as recent figures for Egypt's reserves of foreign currency demonstrated.

The Central Bank reported on 26 December that reserves were $14.05bn in September, up $131m on the previous month and largely the result of rising numbers of visitors, according to economists.

But fears about war in the Middle East mean that the numbers have begun to fall again, meaning that both Egypt's most lucrative earners of foreign currency could be hit at the same time.

The number of visitors to Egypt fell to 498,000 in September from a record 574,000 in August.

Tourist nights totalled 2.96 million in September, down from 4.2 million in August.

See also:

04 Aug 02 | World at One
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