ASWAN // When the Aswan High Dam was completed 40 years ago last week, its colossal scale placed it alongside the Great Pyramids and the Suez Canal in Egypt's pantheon of historic engineering achievements. It also turned a section of the Nile into one of the world's largest man-made lakes and a bountiful new food resource for Egypt's burgeoning population. While the dam managed to restrain the Nile's water, the government has grappled for decades to effectively manage the fisheries that grew in its shadow.
On the vast surface of Lake Nasser, Egypt's recent economic history sees a reflection of itself. Like many of the young industries that flowed from a once centrally planned economy, the fisheries of Lake Nasser have endured decades of public mismanagement followed by halting attempts at reforms that have left both fishermen and private investors feeling jilted and deprived. Fishermen and fisheries experts now estimate that at least half of the lake's yearly catch is extracted illegally by poachers seeking to avoid strict regulations and price controls - a situation that hampers the government's attempts to manage the lake while threatening its vitality as a food resource.
Olfat Anwar Habib, the general director of fisheries at the Lake Nasser Development Authority, one of several government organisations that oversees the lake's fishing industry, said: "We have black markets, and smuggling is the big reason for the production decreasing. We write down and do data analysis for every location at every harbour, but the fish production through smuggling cannot be recorded,. "We don't know the percentage of smuggling, but about 10 years ago, it was at about 200 per cent of legal fish production. But recently it decreased to 50 or 60 per cent."
Ten years ago local officials first began to consider the lake's fishing business as the domain of private enterprise. That thinking was part of a larger economic policy trend that began 20 years ago, when policymakers started to relax price controls, subsidies and restrictions on trade and investment. Those reforms were concomitant with structural adjustment programmes demanded by international financial institutions such as the International Monetary Fund, which offered US$372 million (Dh1.4 billion) in loans to a profligate Egypt in 1991.
The changes brought to the Lake Nasser fisheries replaced a strict, state-managed system of fishing licences and price controls. The state-owned Egyptian Company for Fish Marketing (known as Tawsik) and a pseudo-governmental distribution firm, Misr Aswan Fishery and Fish Processing Company, handled all legal distribution of Lake Nasser's fish to markets north of Aswan. According to a 2008 study of the economics of Lake Nasser's fisheries by the WorldFish Centre, a non-governmental advocacy organisation based in Malaysia, the Egyptian government's primary aim was to promote Lake Nasser's fish as a source of protein to meet the demands of the largely impoverished, rapidly growing population.
Despite controls on consumer prices for fish having been lifted several years earlier, fishermen's co-operatives on Lake Nasser were required to sell their catch to Tawsik and Misr Aswan at about 25 per cent below market rates. And the fish had been plentiful. In 1991, fishermen managed to extract 29,642 tonnes of fish from the lake despite the strict regulations and the widely acknowledged incompetence of Tawsik and Misr Aswan, which were accumulating millions of pounds in debt to the fishing co-operatives.
But the abundance did not last. By 2000, landings had decreased to 8,281 tonnes, far below the lake's 35,000-tonne maximum annual yield. "When that happened, there was a big question for the government: why? So the government nominated a committee to study the reason for this sharp decrease," Ms Habib said. In the end, she said, the committee blamed over-regulation, which had led to the rampant smuggling that had depleted fish reserves.
"When they submitted their report to the prime minister, he decided free marketing, free pricing. From that date, it was a new era for the fisheries in Lake Nasser." The government split up the lake's surface into six sections and invited "investment companies" to claim parts of the lake - a stab at resolving a classic "tragedy of the commons" scenario, in which conventional economic thinking dictates establishing property rights over shared resources. Finally, workers established an auction at the harbour - a move that allowed fishermen to negotiate market prices for themselves.
But the fish traders and fishermen, many of whom are migrant workers from far-away cities in Upper Egypt, showed little acumen for market economics. Prices spiralled, sometimes to as much as 30 Egyptian pounds (Dh19) a fish, Ms Habib said. Nevertheless, liberalisation had an "instantaneous effect", according to the WorldFish report. Official landings increased by 300 per cent between 2000 and 2002.
Almost as soon as it began, the new system, with its unwieldy prices, was scrapped in favour of a new price-setting regime (the prices are reset monthly at levels consistently below market rates). Meanwhile, the four private investment firms protested loudly when they discovered that, contrary to the government's previous assurances, their allocations on the lake's surface, far from the fish-rich khors, the shallows inlets on the lake's edges where fish spawn, yield very little fish.
Mohammed Ibrahim, the assistant general manager of the Grand Lake Company for Fisheries, one of the private investors, said: "They brought companies from Denmark and consultants from India. They spent a lot of money, but there is no fish in the deep water." His company has lost about 7 million Egyptian pounds since 2005. Nevertheless, he is locked into a 25-year contract. "I am very afraid that the future of this company is now very bad, " he said.
The same might be said for the future of the fish business in Lake Nasser and the men who rely on it. WorldFish estimates that fish production in the lake remains at about 20 per cent of its total potential. The smuggling, meanwhile, continues, even as law enforcement officials arrest about one smuggler a day. Saad Ahmed Ali, a hired hand on one of the fishing boats, said: "The smugglers offer to buy the fish for slightly higher prices. They just collect all the fish in one or two days and then leave." Mr Ali said he supports his wife and three children on the 250 pounds he earns each month. "The lake's management is not good. It needs to be changed."