Damn the Accountants! Full Speed Ahead on the Suez Canal Expansion

A Washington Post story on Egypt's addition to the Suez Canal reminds me of stories about stadiums, arenas, and convention centers. First, there's a leader with an edifice complex:

There was no public feasibility study, just an order from the new president. He wanted Egypt to dig a new Suez Canal. Oh, and he wanted it completed in a year.

That was last August. And on Thursday, with much pomp and circumstance, President Abdel Fatah al-Sissi inaugurated the new waterway — an expansion of the original, really.

And then, as noted above, there was no real study. In the United States elected officials usually commission bogus studies that economists laugh at.

There's the hoopla in place of sound economics:

For the past few weeks, the country has been bombarded with messages, slogans and propaganda — all extolling the virtues of what the government is calling Egypt’s “gift to the world.” The canal will double shipping traffic and change the world, officials say. In a countdown to the opening, the flagship state newspaper said: “48 hours… and the Egyptian dream is completed.”

Just this week the mayor of St. Louis, saved by a judge from having to endure a public vote on taxpayer funding for a new NFL stadium, exulted:

“Having an NFL team in a city is really, I think, a huge amenity,” he said. “It’s one of the things that make living in a big city fun.”

Like the stadiums, the new canal path wasn't needed:

But less important amid the hyper-nationalist fervor, it seemed, is the fact that the $8 billion expansion of one of the world’s most important waterways probably wasn’t necessary....It will probably shave only a few hours off the time that vessels wait to traverse the canal. Global shipping, economists say, has been sluggish since the 2008-2009 world financial crisis.

As with stadiums and other grand municipal projects, economists scoff at the purported benefits:

“This is politics. [The government] wants to give the impression we are entering a new phase of the Egyptian economy,” said Ahmed Kamaly, an economics professor at the American University in Cairo. Egypt’s economy tanked with the turmoil of the Arab Spring, with foreign reserves plummeting and the tourism industry suffering.

“It’s all propaganda,” Kamaly said of government’s grand promises of a revived national economy. “The benefit is overestimated.”

Egypt wants to be known as a modern country. Well, spending taxpayers' money on white elephants is certainly a characteristic of rich, advanced countries. But $8 billion is a lot even in the white elephant league.