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Egypt’s Economy Suffers $7 Billion Loss Due To Houthi Attacks On Red Sea Shipping

by THEFUTURE.TEAM

December 27, 2024

The Egyptian economy has faced significant setbacks in 2024, with losses amounting to $7 billion as a result of disruptions caused by Houthi rebel attacks in the Red Sea. These attacks have severely impacted the revenue generated by the Suez Canal, a vital artery for global trade and a cornerstone of Egypt’s economy.

Decline in Suez Canal Revenue

According to reports from Egypt’s presidency, Suez Canal revenue is expected to drop by 60% in 2024. The Houthi rebel assaults, which began in 2023, have led to the effective blockade of shipping in the southern Red Sea and parts of the Gulf of Aden. This disruption has forced many international trading companies to opt for longer, more expensive routes, further straining global supply chains.

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Impact on Egypt’s Economy

The Suez Canal contributes significantly to Egypt’s foreign exchange reserves. The ongoing crisis has exacerbated the economic challenges facing the nation, with the Egyptian pound hitting a record low, trading at just $0.020. Despite not directly targeting Egyptian assets, the Houthi attacks have disrupted shipping routes crucial for the canal’s operations, diminishing its role as a key trade passage between Europe and Asia.

Global Trade Implications

Handling approximately 15% of the world’s shipping traffic, including 30% of global container shipments, the Suez Canal’s strategic importance cannot be overstated. The disruption mirrors the economic fallout from the 2021 Suez Canal blockage, when a single container ship halted traffic for six days, pausing up to $10 billion in daily trade. Prolonged interruptions like those experienced in 2024 risk further elevating shipping costs, delaying deliveries, and impacting global economic growth, particularly in Europe.

The Wider Effects of the Crisis

The forced rerouting of ships due to security concerns has also inflated the price of goods and slowed delivery times globally. This has created a ripple effect, making the economic consequences felt far beyond Egypt’s borders. European markets, heavily reliant on the canal for efficient trade, are particularly vulnerable to these delays and increased costs.

A Critical Moment for Egypt

The ongoing situation underscores the fragility of Egypt’s reliance on the Suez Canal for economic stability. As the government navigates these challenges, the need for robust measures to safeguard this vital trade route and its revenues has never been more pressing. Addressing the impact of the Houthi attacks is crucial not only for Egypt’s economic recovery but also for ensuring the stability of global trade in the long term.

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Only 1% Of Cyprus Farms Use Precision Farming Technologies

Cyprus remains one of the European Union’s least digitised agricultural economies, with just 1% of farms using precision farming technologies in 2023, according to Eurostat.

The findings come as the EU continues to encourage the adoption of digital tools aimed at improving agricultural productivity, efficiency and sustainability.

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Internet Access Expands, But Digital Uptake Lags

Internet access has improved across the bloc, although adoption remains uneven. Eurostat found that 43% of EU farms had internet access in 2023, with northern and central European countries leading the way.

Denmark, Germany, Slovakia, Latvia, the Czech Republic and Austria all reported internet access rates above 90%.

Greater connectivity, however, has not translated into widespread digital adoption. Farm management information systems, which help farmers manage day-to-day operations, were used by only about 11% of EU farms. France was a notable exception, with around 60% of farms using the technology.

Precision Farming Concentrated In Larger Operations

Robotics adoption also remained relatively limited, with only about 7% of EU farms using robotic technologies. Overall, around 18% of farms with utilised agricultural area employed at least one precision farming technology or practice in 2023.

These included robotics for plant protection, band spraying, variable-rate application, precision crop monitoring and soil analysis. Despite representing fewer than one in five farms, these holdings accounted for around 44% of the EU’s utilised agricultural area.

The figures suggest that precision farming remains concentrated among larger agricultural businesses, where investment in digital technologies is typically easier to support.

Cyprus Lags Behind EU Leaders

Luxembourg, Finland and Estonia recorded the highest shares of utilised agricultural area managed by farms using precision farming technologies, each exceeding 75%.

At the other end of the ranking, Cyprus recorded just 1%, while Greece and Romania reported between 10% and 15%. The results indicate that Cyprus remains at an early stage of digital adoption in agriculture, even as precision farming becomes more widespread across parts of the European Union.