Thursday, May 2, 2013

Where Did all the Jobs Go?: Lack of Tourists destroying Egypt’s Economy

           When the Arab Spring descended upon Egypt, political activists were enthusiastic about the possibilities that the new government offered. Unfortunately, two years of protest, high unemployment, and economic instability have left the Egyptians wondering if they were better off under Mubarak. Egypt’s economic woes have once again brought protestors to the streets demanding President Morsi’s overthrow.  Unfortunately, these protests are significantly worsening Egypt’s economic situation because the country is losing billions of dollars in tourism revenue.
            In 2010, the last year before the revolution, the tourism industry represented 13% of the country’s GDP. 14 million tourists traveled to Egypt that year and the industry directly or indirectly employed one in seven workers. Nowadays, the industry offers a different story. Nile cruise boats are left idle on the riverbanks and trinket-sellers practically mob any tourist in site. Tourist arrivals plummeted from 14 million to 9.5 million in 2011. Hotel occupancy rates are barely 15% in Cairo and below 5% in Luxor, home to the Valley of the Kings. But protests are not the only thing driving tourists away. Last February 19 people were killed in a hot air balloon explosion. In 2006, bombings in the resort city of Dahab killed 23 people. Islamist extremists killed over 60 tourists at an archeological site in 1997. The tourism industry was able to rebound from these incidents, although constant negative media coverage on the region could keep travelers away for longer durations.
            The issue of Egypt’s economy is especially important because political analysts are beginning to examine whether the Arab Spring actually increased living conditions throughout the Middle East. For Egypt, it appears that civil unrest and a polarized Islamist government have created conditions equal to or worse than Mubarak’s regime. It has been over two years since the revolution in Egypt and political activists have sacrificed too much to give up now. As their fight continues, Egypt’s GDP will continue to fall.
            The only way for Egypt’s economy to recover is through the achievement of long-term political stability. This is a particularly difficult solution because it appears that the two variables are contingent on one another. People are protesting because they have no job but they have no jobs because tourists are afraid of the protests. Tourism provides critical income for more than 70 industries and 20% of the states foreign currency. Foreign currency is especially needed now as the Egyptian pound continues to plummet. The Good news is: if your interested in Egyptian history, you may just be able to explore some of the Worlds most infamous historical landmarks all by yourself.



  1. I think that this is a big problem facing a lot of countries in the MENA region. Foreign companies look for stability when deciding where to invest and tourists look for security. Right now it seems that Egypt is lacking both. The same thing is happening in Tunisia too. The people are protesting the lack of the jobs and economic development, but right now the struggling Tunisian economy, the lack of government funds, and the lack of government consensus are preventing economic growth. The only way to fix the economy is by compromise and stopping the protests, compromise is hard to do when a country like Egypt has so many groups vying for power and criticism of the government is ceaseless.

  2. Tourism is huge revenue for many countries in the MENA region. However, it requires a stable state. Nobody wants to take a family vacation to a floundering country riddled with corruption and protests. While the situation here is no Syria it is still not a major appeal to tourists. Other countries in the region and their instability also affects Egypt's appeal. They must stabilize their economy through domestic means while also addressing their political and religious issues in order to recreate a functioning and safe society that foreigners want to come experience and enjoy. This issue is reminiscent of the "Bahraini Milkshakes" reading and how tourism is affected by state behavior and irresponsibility. If these beautiful countries want tourism revenue they must first address domestic issues in order to stabilize and then capitalize on foreign revenue. These are not small islands with nothing to offer but scenery, they are influential and important trading hubs, key import and export players, and have boundless opportunity for investment in both the public and private sector. In order to get on track Egypt must refocus its economy and take responsibility for its own demise while utilizing its many ways back to success in the world market, tourism will follow.

  3. Do you think that the lack of tourists can be a result of the struggle between the Muslin Brotherhood and the military? It is known that President Morsi has been trying to cover up the continuing protests and corruption by having celebrities like Beyonce come and perform in the country. Even though it can see as another ploy for the President to increase tourism, it seems that there are more ulterior motives now after the revolution than before. The military regime was not ideal, but it was transparent and the issues were visible to the rest of the world. Now, there seems to be more attempts to cover up the failing democratic processes. If they can draft the Constitution and establish a successful democracy, the economy can boost and be more invested in the international community

  4. I think the revolutions themselves might have created low interest from the international community to visit the country. Egypt is still currently pretty unstable and reaching their goals will take a long time. I believe the economy, as the regime, will continue improving in the upcoming years. The process will most certainly take a very long time though.