Tourism is 10% of the Egyptian economy

One in eight Egyptians works in tourism. A May report by the United Nations said poverty and food insecurity had jumped in Egypt over the past three years.

One in eight Egyptians works in tourism. A May report by the United Nations said poverty and food insecurity had jumped in Egypt over the past three years. It estimated 17 percent of the population struggle to secure enough food, up from 14 percent in 2009. The malnutrition rate has risen to 31 percent of children under five, up from 23 percent in 2005.

Tour operators hope stability will return by the end of August. Philip Breckner of Discover Egypt said that following the Foreign Office warning the company had to cancel a cruise on Wednesday. However, passengers who sailed on Monday were having such a good time that they had refused to come home early.

While the instability in Egypt is said to have pegged holiday prices back, the country cannot afford the tourism industry to take a greater hit from political turmoil because of the perilous state of its economy.

Tourism, which makes up more than 10% of Egypt’s entire economic output, had already been hurt by the threat from terrorism in the wake of the 1997 Luxor massacre and subsequent bombings in Sharm el Sheikh in 2005, though Abta said UK tourist numbers in Egypt had been “resilient” – especially in the sea resorts since 2011.

But in a country of 80 million people, the fundamental problem has been Egypt’s inability to improve the prospects of ordinary citizens.

After all, its GDP growth was measured at an annual rate of more than 5% in the first quarter of the year but the stark reality is that the proceeds are not reaching the workforce.

Half the working population are now said to be gripped by poverty on pay of less than $2 a day.

The economic machine – weakening at the time of President Hosni Mubarak’s toppling from power in 2011 – deteriorated further under the tenure of Morsi as he was forced to borrow to make up for rising costs and risk-averse international private investors.

Research by Barclays shows unemployment at 13.2% after the first quarter of the year – growing from 8.9% at the beginning of 2011.

Inflation was running at 8% in April while investment was down 10% in the first three months, with Egypt’s external debt rising almost 30% to $45bn over just one year.

Negotiations on an International Monetary Fund loan have stalled and the protracted discussions meant Morsi was forced to take money instead from countries including Saudi Arabia and Qatar to help pay for subsidies on food and fuel and higher debt bills.

The cost of servicing its debts means Egypt’s cash reserves are bleeding – more than halving from $34bn before Mubarak’s demise to $16bn in May.

The IMF has urged Egypt to raise taxes and cut spending but they are measures an angry population – let alone a new government – cannot afford.

Egyptโ€™s military removed Mursi from power yesterday, suspended the constitution and announced an early presidential election in a bid to resolve the nationโ€™s political crisis. A technocratic government will be formed and the head of the Supreme Constitutional Court will be in charge of running the countryโ€™s affairs, Defense Minister Abdelfatah al-Seesi said in a televised broadcast.

Justin Wateridge, managing director of Steppes Travel, said: โ€œTrouble is localized. It is possible to fly into and out of Luxor and avoid the crowds of Cairo and have Egypt to yourself.โ€

Thomson said it was reviewing Egyptian itineraries daily. Cruises due to visit Alexandria and Port Said, for example, are now calling at Agios Nikolaos, Crete and Haifa, Israel. It said about 8,500 of its nearly 9,000 holidaymakers in Egypt were in Sharm el-Sheikh, where it was โ€œbusiness as usual.โ€

Following the February 2011 downfall of President Mubarak, we were urged to visit Egypt โ€“ not just for its wonders but also to show solidarity with the people. When that call comes again I, for one, will be heeding it.

About the author

Avatar of Linda Hohnholz

Linda Hohnholz

Editor in chief for eTurboNews based in the eTN HQ.

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