The troubles of Port Said

On February 16, thousands of Port Saidis marched during the funeral of 23-year-old Mahmoud al-Nahas who had been shot by a stray bullet in the eye 21 days earlier. Nearly three weeks later four more lives were being mourned, two of them were a 16 and 22 year old, bringing the death toll of Port Saidi civilians to an estimated 47 (records vary). The violence, which has continued in the form of civil disobedience and protests, started when the city rioted on January 26 in reaction to the sentencing by a Cairo court of 21 Port Saidi men to death for their alleged role in the massacring of 74 Cairo football fans of the "Ultras Ahlawy" group on February 1, 2012. The violence over the past two months that has turned the city into a scene of a war zone and only started to dissipate after complete military occupation of the city four days ago is merely a symptom of Port Saidis’ growing resentment toward Cairo’s central government. Locals believe that President Mohamed Morsi and his government have scapegoated Port Said and pushed the city to the brink in order to avoid the wrath of the Ultras Ahlawy. In turn, locals have become determined to make Morsi and his government feel the wrath of their anger; they explicitly ignored his declared state of emergency and night time curfew. It would be a mistake to categorize the seemingly endless instability gripping Port Said as an isolated incident of the revolution. Rather, it is the product of decade-long grievances against unjust and haphazard economic policies left to boil under the city’s surface and widen the gap between Port Said and Cairo’s central authority.

As locals continue to raise the ceiling for their demands and Morsi continues to play the long game waiting for protests to die out, it becomes important to understand the root of the problems. At the heart of the city’s grievances is Cairo’s neglect to properly develop the city’s infrastructure and deliver on promises made as far back as 1986 when former President Hosni Mubarak assigned a cabinet committee to develop plans for the redevelopment of Port Said. To most people’s knowledge, the committee never executed a single project. While Cairo neglected promises of development made to cities like Port Said, it simultaneously provided business tycoons with unprecedented access and support for exclusive tourist and housing projects for the wealthy elite.

About 40 miles south of the mouth of the Suez Canal lay one such project: the massive Porto Golf Sokhna resort. Built over an area of nearly 2.2 million square meters and carved into the nearby desert mountain range, this lavish resort is a testament to the widening economic gap that developed during Mubarak’s last decade of rule. Porto Golf Sokhna is owned by former National Democratic Party MP Mansour Amer’s Amer Group, which also owns similar massive "Porto" projects dotting the country’s coastline and even Syria’s sea front. Amer’s "Porto World" was financed by alleged corrupt practices that allowed him to buy land valued at $1,400 per square meter for only $1 per square meter* in the case of Porto Golf Sokhna. Since coming into power, Morsi has yet to halt the resource taxing projects of Mubarak era-cronies or face the challenges of developing areas like Port Said head-on. In fact, as Port Said faced unprecedented water and electricity shortages in the summer of 2012, the golf courses and "Hanging Gardens" of Porto World were being developed.

The Porto franchises are a remarkable testament to the perception of the ongoing corruption latent within the present administration. The Egyptian government had historically told Port Saidis that there is little it can do to help them. On his first and last trip to Port Said in December 2009 since a 1999 assassination attempt — a visit so rare state media described it as "historic" — then President Mubarak told Port Saidis that he would try to solve their problems, but only to the extent that his limited resources would allow. Cairo’s seemingly intentional aloofness to the city’s problems and the former regime’s diversion of resources to its corrupt clients have helped fuel conspiracy theories in Port Said that Mubarak was intent on "punishing" the city due to the earlier assassination attempt. President Morsi’s finger wagging address following the January 26 protests — one which announced a month-long "state of emergency" and curfew with little regard to how it would affect daily life in the port — was a further indication of the ongoing unfair treatment facing Port Said.

The day following al-Nahas’ funeral, Port Saidis began an ongoing general strike — the first successful one since Mubarak’s ouster — shutting down state administrative buildings and shops, and threatening to disrupt Suez Canal traffic to demand government accountability for the violence and devastation that has gripped the city. This strike has not been the first of its kind; the city faced similar days of violent protests and rioting in January 2002 when Mubarak issued a decree canceling the city’s prized and exclusive duty-free status.

The port’s duty-free status is central to understanding the inhabitants’ economic mentality and the key role that the city plays in the Egyptian economy. Dating back to the era of late President Anwar Sadat, Law No.12/1977 exempted most imports to Port Said from tariffs — a measure which (it was hoped) would accelerate the city’s economic development and reward its people following the evacuation and destruction of the 1956, 1967, and 1973 wars. The city flourished thanks to its special status and became a destination for Egyptians wishing to buy cheap imported goods, which would then be taxed by customs agents as they left the city.

The city grew more and more dependent on its duty-free status, leading to less economic diversification. Port Said turned into a city of mostly traders and clothes vendors; while highly profitable, the city was rudely alerted by Mubarak’s 2002 decision as to its unsustainable situation. With seemingly little regard to the negative consequences that would befall the city, the president canceled the duty-free status after 25 years. The government cited a parliamentary report that claimed that the city’s duty free status threatened local textile industry and deprived the state of millions of pounds in custom duties due to alleged high rate of smuggling of cheap imported goods and garments into the country, something Port Saidi traders denied at the time. Pressured by massive protests, the government passed Law No.5/2002 three weeks later, stipulating that the duty-free status would instead be phased out in five years with import quotas for each year ending in 2007. Despite this, the damage was done and that year, some business owners claimed to have lost nearly 75 percent in sales — a situation that has not improved to this day. The government told Port Saidis that it had a plan to help diversify the city’s economy and build massive development projects by the end of 2007, but the plan was never fully executed. Sure enough, in 2006 (Law No.1/2006) the government was forced to extend the duty-free status to 2009; in 2009, the government was again forced to extend the status to 2012 (Law No.5/2009), this time as a "gift" to Port Saidis. Even then, violent demonstrations broke out to protest import quotas that had been lowered.

Following the Supreme Council of the Armed Forces’ (SCAF) rise to power, the duty free status was extended to 2013 (Law No.119/2011) as a means to avoid almost certain economic catastrophe in Port Said. With the election of a new parliament in 2012, Port Saidi MPs secured preliminary approval in May 2012 for proposed legislation to reverse Mubarak’s 2002 law and put in place a plan for an industrial free zone. The legislation was never implemented, due to the parliament’s dissolution in June 2012.

With the election of President Morsi, Port Saidis were cautiously optimistic — on his campaign trail, he had promised to reverse Mubarak’s 2002 law. After being sworn in, Morsi did raise some of the import quotas, but little action was taken beyond this; crime linked to the deteriorating economic conditions was on the rise. A few months later, Port Saidis felt cheated after the government of Prime Minister Hisham Qandil failed to address the reversal of the 2002 law and instead extended the duty-free status for yet another two years in November 2012; highlighting both the government’s recognition of the lack of economic alternatives for the city and its failure to properly address Port Saidi grievances. Following the decision, shop owners went on another strike and demanded that the governor step down; some warned that the city was about to "explode" due to its deteriorating economic conditions.

Less than three months before the outbreak of the current crisis, signs of Port Saidi anger began to show. Port Saidi MPs in the Shura Council demanded that the governor step down and warned of popular civil disobedience and paralyzing strikes in light of deteriorating economic conditions caused by port smuggling due to the deteriorating security situation after the revolution and government neglect. Thus, the intensity of the ongoing anger and frustration comes as no surprise. Though hardly practical, calls for independence or autonomy by some in Port Said over the perceived sense of injustice are certainly present. For now, the city is held together by the Egyptian military, and the only man that commands respect in its streets is not President Morsi but rather General Ahmed Wasif of the Second Army Division.

Despite this, there remain signs of hope and progress. As dozens of Port Saidis were getting shot, 23-year-old Emad ElSaid, for example, was hard at work with his colleagues developing a web design company, Pixelware, and launching his new website: http://www.madeinportsaid.com. On the phone, ElSaid explained how he and his colleagues came up with an idea to facilitate the technology transfer to Port Said’s economy and encourage young entrepreneurs to look into fields other than trade. ElSaid’s efforts might be small but symbolic of the determination of Port Saidis against any odds.

The government’s latest announcement of legislation providing for a continued duty free zone and appropriating more Suez Canal revenue to develop the canal cities has been rejected as a cheap and opportunistic attempt to buy the city’s silence. If anything, the knee-jerk reaction by Morsi to offer these belated economic incentives proves to Port Saidis that Cairo only cares about its centralized interests. For the city to begin to heal its wounds and trust the government once more, the cabinet must take serious and immediate action to completely address the demands surrounding the ongoing cycle of violence as well as resolve the city’s precarious economic straits. This is the only path to reinvigorate a city that is still waiting to realize its full potential.

Mokhtar Awad is a junior fellow in the Middle East program at the Carnegie Endowment for International Peace.

*Correction — the article originally inaccurately listed square mile rather than square meter.