So why is Egypt building a new capital city right next to Cairo?

A model of the proposed city (we're assuming the web address won't loom quite so large on the finished article). Image: Getty.

According to the highly reliable source that is Wikipedia, Egypt has had 29 capital cities over the past 5,000 years. The incumbent, Cairo, has been in place since 950 AD, so, in the scheme of things, it was due a change-up. 

Perhaps that's why, last week at an economic development conference, the Egyptian government announced it was planning a giant new building project to the east of Cairo. The new city, which could eventually cover 700 km sq, doesn't currently have a name, and is being referred to simply as "The Capital" (we're really hoping this is a Hunger Games reference).

If all goes to plan, the city will serve as the new administrative and financial capital of Egypt. Amazingly, the ministry claims that development could be finished within five to seven years, and construction on the road that will link the two cities has already begun. 

You could be forgiven for being a little confused as to why a country would shift its capital of over a thousand years 50km to the east, seemingly for the hell of it. Here are a few reasons the project looks so appealing to the Egyptian government . 

Cairo is full

The population of Cairo's larger metropolitan area is nearing 20m, and, as a result, it's one of the most congested cities on earth: the World Bank estimated in 2010 that traffic costs amount to about 4 per cent of Egypt's entire GDP

In this sense, the new development could be seen as an extension of the old city, to cut down on overpopulation and congestion. The housing ministry claims the capital could house up to 7m people; the initial plans include 1.1m residences, 1,250 mosques and churches, and 663 hospitals. That said, "New Cairo", a relatively new development to the east, was built for millions of residents, but is still only home to a few hundred thousand.

Still, Cairo's population is expected to double over the next 40 years, so a new satellite city does make some kind of sense. But why move the country's capital too? 

The president wants to make a statement

Abdel Fattah el-Sisi was elected president in June 2014, and subsequently told the Egyptian people to prepare for the "hard work phase" in their country's recent history, to help the country's economy recover from the effects of the 2011 revolution. That revolution played out in old Cairo, and centred on Tahrir square, the site of many of Cairo's current administrative buildings. 

Mubarak, Egyptian president between 1981 and 2011, actually tried to build a new capital too during his own tenure, but that project failed. If Sisi can succeed, and physically move the government away from the ghosts of the revolution to boot, it'll show he can overcome Egypt's previous setbacks and political tensions and move the country – and, hopefully, its economy – forward. 

Image: Getty.

The Egyptian governemnt may not have to pay for it

The government has hired a Dubai-based real estate investment fund, headed by Emirati Mohamed Alabbar, the man behind the Burj Khalifa, to raise funds for the project and build it. By the end of last week's conference, around $12bn had been pledged by Gulf-based investors, which is over a quarter of the total (that's if the project stays within budget, of course).

The Egyptian people must be hoping for big foreign investment, too: Sisi has already cut food and energy subsidies and raised fuel prices to help the country's ailing economy, which has led some to criticise the announcement of a grand new city project while Egypt's poorest go hungry. 

The Suez canal is getting wider

Another important factor is the city's location: it will lie between Cairo and the Suez Canal, with its profitable trade routes. Under a new expansion project, the Egyptian government is expanding the canal, to allow boats to sail in both directions at once (it goes both directions at the moment, but along most of its length its only wide enough to go one way at once), potentially doubling the trade revenue generated. 

Here's the planned location, a short hop from both New Cairo and El Shorouk city (the two blobs just to the north of the new capital). 

This will bring the city much closer to the canal,  using up what is at present just a stretch of desert: 

It's been done before

...though not particularly successfully. Malaysia moved parts of its central governemnt from Kuala Lumpur to the newly built Putrahaya in 1999, while in 2005 the Burmese government shifted from Yangon to the brand new city of Naypyidaw (though that city is reportedly still half empty). Egypt, meanwhile, has built over 20 "new towns" over the past half century, most of which are still very sparsely populated. Looks like President Sisi has a real job on his hands. 

 
 
 
 

The Adam Smith Institute thinks size doesn’t matter when housing young professionals. It’s wrong

A microhome, of sorts. Image: Wikimedia Commons.

The Adam Smith Institute has just published ‘Size Doesn’t Matter’, a report by Vera Kichanova, which argues that eliminating minimum space requirements for flats would help to solve the London housing crisis. The creation of so-called ‘micro-housing’ would allow those young professionals who value location over size to live inside the most economically-active areas of London, the report argues argues.

But the report’s premises are often mistaken – and its solutions sketchy and questionable.

To its credit, it does currently diagnose the roots of the housing crisis: London’s growing population isn’t matched by a growing housing stock. Kichanova is self-evidently right in stating that “those who manage to find accomodation [sic] in the UK capital have to compromise significantly on their living standards”, and that planning restrictions and the misnamed Green Belt are contributing to this growing crisis.

But the problems start on page 6, when Kichanova states that “the land in central, more densely populated areas, is also used in a highly inefficient way”, justifying this reasoning through an assertion that half of Londoners live in buildings up to two floors high. In doing so, she incorrectly equates high-rise with density: Kichanova, formerly a Libertarian Party councillor in Moscow, an extraordinarily spread-out city with more than its fair share of tall buildings, should know better.

Worse, the original source for this assertion refers to London as a whole: that means it includes the low-rise areas of outer London, rather than just the very centrally located Central Activities Zone (CAZ) – the City, West End, South Bank and so forth – with which the ASI report is concerned. A leisurely bike ride from Knightsbridge to Aldgate would reveal that single or two-storey buildings are almost completely absent from those parts of London that make up the CAZ.

Kichanova also argues that a young professional would find it difficult to rent a flat in the CAZ. This is correct, as the CAZ covers extremely upmarket areas like Mayfair, Westminster, and Kensington Gardens (!), as well as slightly more affordable parts of north London, such as King’s Cross.

Yet the report leaps from that quite uncontroversial assertion to stating that living outside the CAZ means a commute of an hour or more per day. This is a strawman: it’s perfectly possible to keep your commuting time down, even living far outside of the CAZ. I live in Archway and cycle to Bloomsbury in about twenty minutes; if you lived within walking distance of Seven Sisters and worked in Victoria, you would spend much less than an hour a day on the Tube.

Kichanova supports her case by apparently misstating research by some Swiss economists, according to whom a person with an hour commute to work has to earn 40 per cent more money to be as satisfied as someone who walks. An hour commute to work means two hours travelling per day – by any measure a different ballpark, which as a London commuter would mean living virtually out in the Home Counties.

Having misidentified the issue, the ASI’s solution is to allow the construction of so-called micro-homes, which in the UK refers to homes with less than the nationally-mandated minimum 37m2 of floor space. Anticipating criticism, the report disparages “emotionally charged epithets like ‘rabbit holes’ and ‘shoeboxes,” in the very same paragraph which describes commuting as “spending two hours a day in a packed train with barely enough air to breath”.


The report suggests browsing Dezeen’s examples of designer micro-flats in order to rid oneself of the preconception that tiny flats need mean horrible rabbit hutches. It uses weasel words – “it largely depends on design whether a flat looks like a decent place to live in” – to escape the obvious criticism that, nice-looking or not, tiny flats are few people’s ideal of decent living. An essay in the New York Times by a dweller of a micro-flat describes the tyranny of the humble laundry basket, which looms much larger than life because of its relative enormity in the author’s tiny flat; the smell of onion which lingers for weeks after cooking a single dish.

Labour London Assembly member Tom Copley has described being “appalled” after viewing a much-publicised scheme by development company U+I. In Hong Kong, already accustomed to some of the smallest micro-flats in the world, living spaces are shrinking further, leading Alice Wu to plead in an opinion column last year for the Hong Kong government to “regulate flat sizes for the sake of our mental health”.

Amusingly, the Dezeen page the ASI report urges a look at includes several examples directly contradicting its own argument. One micro-flat is 35 m2, barely under minimum space standards as they stand; another is named the Shoe Box, a title described by Dezeen as “apt”. So much for eliminating emotionally-charged epithets.

The ASI report readily admits that micro-housing is suitable only for a narrow segment of Londoners; it states that micro-housing will not become a mass phenomenon. But quite how the knock-on effects of a change in planning rules allowing for smaller flats will be managed, the report never makes clear. It is perfectly foreseeable that, rather than a niche phenomenon confined to Zone 1, these glorified student halls would become common for early-career professionals, as they have in Hong Kong, even well outside the CAZ.

There will always be a market for cheap flats, and many underpaid professionals would leap at the chance to save money on their rent, even if that doesn’t actually mean living more centrally. The reasoning implicit to the report is that young professionals would be willing to pay similar rents to normal-sized flats in Zones 2-4 in order to live in a smaller flat in Zone 1.

But the danger is that developers’ response is simply to build smaller flats outside Zone 1, with rent levels which are lower per flat but higher per square metre than under existing rules. As any private renter in London knows, it’s hardly uncommon for landlords to bend the rules in order to squeeze as much profit as possible out of their renters.

The ASI should be commended for correctly diagnosing the issues facing young professionals in London, even if the solution of living in a room not much bigger than a bed is no solution. A race to the bottom is not a desirable outcome. But to its credit, I did learn something from the report: I never knew the S in ASI stood for “Slum”.