ISMAILIA, Egypt (Reuters) - Nationalist celebrations to inaugurate a major extension of the Suez Canal intended to power an economic turnaround began on Thursday when Egyptian President Abdel Fattah al-Sisi boarded a historic yacht to welcome foreign dignitaries.
Dressed exceptionally in military regalia, the former armed forces chief, who led a military takeover two years ago but ran for president as a civilian last year, sailed to Ismailia to join leaders of France, Russia and Gulf Arab states for the ceremony.
The $8 billion New Suez Canal project was completed in just one year instead of three on Sisi’s orders, but economists and shipping analysts question whether there is sufficient traffic and east-west trade to meet its ambitious revenue targets.
The canal expansion is the centerpiece of a grand agenda to lift the most populous Arab nation out of poverty and secure Sisi’s grip on power after he ousted elected Muslim Brotherhood President Mohamed Mursi in 2013 following mass protests.
The spectacular inauguration was also intended to strengthen his international standing, with French President Francois Hollande and Russian Prime Minister Dimitry Medvedev among leaders attending.
Sisi set sail with a young boy dressed in military fatigues waving the Egyptian flag at his side aboard the yacht El-Mahrousa, the first ship to pass through the Suez Canal when the waterway was opened in November 1869.
Thursday was declared a public holiday. Cairo and other cities were decked out in bunting, with fairy lights hung from the Nile river bridges and banners proclaiming “From the mother of the world (Egypt) to the whole world”.
Newly delivered French Rafale fighters and U.S. F-16 warplanes staged a flypast, while helicopters flew overhead and naval vessels escorted the yacht in the televised ceremony.
The yacht was an ambivalent symbol, since King Farouk, the last monarch to rule Egypt, sailed into exile in Italy aboard it after being ousted by the military in 1952.
Egypt had been reeling from years of turmoil since the Arab Spring uprising that deposed autocrat Hosni Mubarak in 2011, and many of the country’s nearly 90 million population have suffered from a slower economy, a fall in tourism and high inflation.
The government believes the New Suez Canal and an industrial zone to be developed around it will seal Egypt’s deliverance from economic purgatory - to the scepticism of some.
The project involved extending a waterway parallel to part of the 19th century canal connecting the Mediterranean to the Red Sea, as well as deepening and widening the old channel - the shortest shipping route between Europe and Asia.
The project has been billed as a national accomplishment on par with President Gamal Abdel Nasser’s nationalization of the original Suez Canal in 1956 and building of the Aswan Dam.
State television broadcast shots of the new canal to the theme of the popular television series Game of Thrones.
In Cairo’s Tahrir Square a crowd of about 300 gathered in the square honking horns with the color of the Egyptian flag.
“This isn’t just for me, it’s for my children and grandchildren. This is for the whole world,” said 50-year-old Gamal Amin.
But not everyone was enthralled.
“There isn’t anything new to be celebrating. There are more important things for Egyptian people that this money could have been used for,” said Mahmoud, 24, walking past Tahrir.
For many Egyptians, as well as economists and experts, the immediate benefits of the expansion, funded largely by a public subscription in Egypt, are not obvious.
The Suez Canal Authority expects a windfall of additional revenue — $13.23 billion (£8.5 billion) in annual revenue by 2023 from just over $5 billion in 2014, with the number of daily vessels rising from 49 to 97 over the same period.
But sluggish world trade, competition from an expanded Panama Canal and a slower Chinese economy make it unlikely the project can achieve its revenue targets anytime soon or bring about a significant fall in unemployment from about 13 percent.
Some economists have branded the projections ‘wishful thinking’ especially since Suez Canal revenue growth has failed to keep pace with growth in world trade since 2011.
But British Defense Secretary Michael Fallon praised the project as a “modern wonder”.
Egypt and its Western allies are keen to burnish its image in the face of a region beset by turmoil. But Cairo too faces an ongoing and increasingly brazen two-year-old insurgency based across the Suez Canal in Sinai peninsula that has killed hundreds of police and soldiers.
In an ominous turn, Islamic State’s Egyptian affiliate released a video on Wednesday threatening to kill a Croatian hostage within 48 hours if Muslim women prisoners were not freed. Last month, the group managed to fire a rocket at an Egyptian navy vessel in the Mediterranean, near the coast of Israel and the Gaza Strip.
But Egyptian authorities say the safety of ships through the strategic canal has never been under threat.
Additional reporting by Jake Rashbass and Ahmed Aboulenein; Writing by Yara Bayoumy