Al-Ahram Weekly Online   9 - 15 June 2011
Issue No. 1051
Published in Cairo by AL-AHRAM established in 1875

A city like

Ever since it was built during the construction of the Suez Canal, the fortunes of the city of Port Said have been linked to those of Egypt as a whole. Today, its free-zone status needs renovation, finds Osama Kamal

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Once Port Said city was the source of fashionable goods, but now the free zone needs a revamp. Street vendors have taken to the streets changing the merchandise and style as a whole

Port Said, a coastal city at the northern tip of the Suez Canal of only 600,000 inhabitants, is small by Egyptian standards. Yet, since its building 150 years ago its history has been intertwined with that of the country as a whole.

The city derives its name from the Khedive Said (1822-1863), the man who awarded the concession for the digging of the canal to Ferdinand de Lesseps, a French diplomat and entrepreneur. Before long, the city had acquired a polyglot community of Frenchmen, Greeks, Italians, Maltese and Cypriots. In Egyptian lore, its image is one of heroism, a bit of a Stalingrad perhaps, due to its role in the 1956 War, known in Egypt as the ‚êúTripartite Aggression".

Port Said is now less heroic and a bit down on its luck. Its fortunes are linked to a free-zone status that is so murky that the government has decided to handle affairs in Port Said on a ‚êúcase-by-case basis". The city's business situation is uncertain, and its inhabitants complain of what they consider to be government neglect.

The current confusion began in 1977, when the then president Anwar El-Sadat issued presidential decree number 12 turning Port Said into a free-trade zone. In 2001, nearly 25 years later, the government of the day issued Decree 5, abolishing the free zone. Since then, the city has been on a roller-coaster ride of changing regulations and vacillating policy.

Even before the 2001 decree, the Port Said business class had quite a few grievances. Duties levied on some of their products were as high as 200 per cent, undermining their domestic market. Some inhabitants think that the government's harsh approach was due to the resentment felt by former president Hosni Mubarak towards the city. When conversation turns in this direction, some retell the story of Abul-Arabi, a man who tried to kill the president in 1999, according to the official story. The non-official version, common in Port Said, is that Abul-Arabi was shot while trying to hand the president a complaint.

If truth be told, the government's attempt to do away with Port Said's free-trade status began much earlier than the alleged Abul-Arabi attack. In 1986, when Ali Lotfi was prime minister, he also tried to abolish the free zone. However, the protests by local people were so forceful that the government partially rescinded the measure. After that, the former regime dealt with the free zone erratically, allowing it to exist only for short periods of time, usually right before or immediately after elections.

Officially, the city's free-zone status is due to end in 2012, seven months from now. But Port Said's merchants are not taking this lying down, and they have threatened to disband the local chamber of commerce if the free-zone status is withdrawn. They have also forwarded strong demands to Prime Minister Essam Sharaf's caretaker government, including demands that Decree 5/2001 be cancelled and that the 1977 decree be restored in full.

Other demands include that import quotas for the city be increased to LE62 million, with each registered merchant granted an import licence of LE7,000-40,000, and non-city dwellers not be allowed to hold import licences. In response, the government has promised to extend free-zone status for two more years, while granting the city import quotas totalling LE45 million.

In a nearly empty coffeehouse bearing the name of legendary footballer Mahmoud El-Dizwi, former adviser to several Port Said governors Samir Moawad, 67, the author of a four-volume account of the city's history, recalls episodes from the history of Port Said.

The city was first designated a free-trade zone in 1902, when ships docked at nearby islands would exchange goods without going through customs. The transit trade made the islands a hub for commercial entrepreneurship, and the experience Port Said merchants gained was later drawn upon by other successful ports, such as those at Aden and Hong Kong.

However, when Egyptian legislators created the current free zone in 1977, they did not draw upon this pioneering experience but instead put together a flawed law, according to Moawad. This law allowed the prime minister of the day to interfere in the business of the free zone, and procedures were so poorly defined that they turned the city from an industrial free zone to a consumer free zone, which had not at all been the original intention.

As a result, the whole thing became a kind of free-for-all, open to anyone who could get their hands on import licences. Some people even got rich by hiring out licences to other traders, Moawad says.

At the time when the law was passed, Moawad had not yet started working for the Port Said governorate, and he was made an adviser only after having published an article, ‚êúTen Sins of the Free Zone of Port Said," in Al-Ahram Al-Iqtisadi. However, none of the recommendations he made were implemented, and what the city needs now, he says, is not the restoration of the old free zone, but rather the creation of an entirely new one, one that would be a production hub rather than a consumer transit point.

Mohsen Khodeir, a puppet seller on Nabil Mansour Street in Port Said, has been in his line of business since the mid-1970s. Demand for puppets is particularly high during the city's national celebrations, when the populace burns an effigy of British general Lord Allenby, a custom that started after the 1919 Revolution.

Khodeir is not a critic of the free zone in Port Said, but he says that the city lost much of its character when it was evacuated between 1967 and 1974. Having lived in other parts of the country, the inhabitants returned to Port Said with new lifestyles that were less cosmopolitan than before. For six full years after the 1967 War, Port Said was a ghost town, and many of its buildings were destroyed in the war.

Today, some of the city's inhabitants have set up a Facebook page to protest against the extension of the free-zone arrangements. Their argument, according to resident Hossam Farouk, is mostly cultural. ‚êúThe free zone has brought certain habits into Port Said that are not native to it, including a lack of community feeling and a sort of crass commercialism," he says.

According to Farouk, newcomers to Port Said have diluted its culture and brought a way of life with them that is alien to the city. Students skip college to go into trade at an early age, and skilled labour leaves the city to work in areas where talent is needed, he claims. The city itself has a claustrophobic feel because of the security barriers established for customs purposes.

However, Farouk's sentiments are not shared by younger street merchants. Mohamed El-Qoleyei, 33, sells garments on one of the city's street corners, a profession he shares with dozens of other young men in Port Said, their stalls cluttering the pavements on Al-Tegari and Al-Hamidi Streets.

"The free zone in Port Said is a source of much-needed income," El-Qoleyei says. "Whether it is productive, morally uplifting, or culturally conducive is none of my business."

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