The hits just keep on coming for a country that many believe is experiencing a second revolution, represented by never-ending Friday protests of “anger” and “wrath.” Besides the tens of thousands that descended on Tahrir Square at the beginning of July, many other things have appeared on the radar that undoubtedly concern those in power as well as citizens hoping for elections soon. But few may impact the economy as much as the ongoing strikes at the Suez Canal.

On strike since mid-June, laborers who are members of the Suez Canal Shipyards Workers’ Union have been negotiating with the Suez Canal Authority. They have done so to show their solidarity with protesters in Suez, Port Sokhna and those across the country. They are putting pressure on the Supreme Council of Armed Forces (SCAF) to give in to the demands of the January 25 Revolution as well as respect their rights as workers.

While the demands of the revolutionaries are well documented and include ending the emergency law, democratic elections and justice for martyrs, the workers’ wants have been largely overshadowed. This is surprising considering that the waterway is such a vital component of Egypt’s economy. The Daily News Egypt reports that workers are looking for a 40% salary increase, improved working conditions as well as better life and health insurance plans. They are also requesting that colleagues be released from detention for their part in protests during January and February, and the fair and just treatment of those injured during the revolution.

While Business Today cannot say whether their demands are justified in every case, it seems that refusing this group of workers is economic suicide. The men and women at Suez are responsible for some of the greatest contributions and are looking at the greater picture. Revenues from the canal equal approximately 3% of Egypt’s GDP purchasing power parity, according to Naeem Holding, an investment house based in the United Arab Emirates and Egypt. Canal revenues rose to $445.2 million (LE 2.65 billion) in June from $436.6 million (LE 2.6 billion) the previous month. In 2010, the figure equalled $383.7 million (LE 2.29 billion), a 16% year-on-year gain.

Egypt’s GDP is set to grow a meagre few percentage points for FY2011/12, with revenue figures most likely contracting. The workers’ strike can only exacerbate this problem. The immediate benefit to solving this problem is the boost in foreign currency acquisitions — a major concern since the fallout of the revolution.

The difference between a complete shutdown of the country’s vital waterway and its current status of lower productivity amounting to millions of pounds of losses is that the conduit remains open, for now. Negotiations with the SCAF and the Suez Canal Authority are ongoing and, not surprisingly, both are slightly more optimistic than their employees.

One party that will be glad when the disagreement ceases to exist is the Suez Canal Shipyards Company, one of eight companies associated with the canal authority. Based in Port Tawfik at the south end of the canal, the strikes are driving its quarterly losses and threatening the existence of an institution that has been around since the mid-19th century. Should these companies cease to remain in operation or see canal traffic diminish, their base of customers would then have to debate whether to brave the coasts of Somalia and travel around the Cape of Africa or find other means of transport. That losing these monies would be catastrophic is an understatement.

This economic doomsday scenario is only exacerbated by the fourth bombing of the El-Arish natural gas pipeline. The attack in the northern Sinai peninsula by supposed terrorists now calls into question Egypt’s ability to safely transport gas to Israel and Jordan. Should gas exports dry up, and as seen, the number of Suez Canal containers decrease as well, the country could be in danger of losing two trusted sources of income.

The economic ramifications of the workers strike and decreased productivity and traffic in the Suez, coupled with attacks systematically crippling the country’s gas exports, will continue to stir unrest throughout the country, particularly for foreign investors. To change this negative trajectory, Egypt must speed negotiations with workers, prove it is willing to take the protesters seriously and better protect its pipelines or risk economic disaster. bt