Egypt's Trade-Off

By EWI EXCLUSIVE | by J. Millard Burr
Tuesday, December 6th, 2011 @ 4:31AM

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November 30, 2011

Egypt’s Trade-Off
By J. Millard Burr*

It is sad to find that Egypt’s tourist economy and the tourism giant Thomas Cook & Sons have simultaneously hit rock bottom. Since the opening of the Suez Canal in 1869, and Cook’s introduction of the “world tour” shortly thereafter, Egypt and Cook have been ineluctably linked in the tourist mindset.

In recalling the quarter-century following World War II, the three names that can generally be counted on to revive a pang of nostalgia in the breasts of nearly all American tourists, adventurers and students who survived their grand tour of Europe were: American Express, Holland America Lines and the world’s best known name in travel, the venerable Thomas Cook & Sons.

Now Cook is once again floundering. The world’s oldest travel firm secured a rescue package from its lenders late Friday, November 25. Success followed days of frantic attempts to salvage the company, but analysts claim damage to the company name has been “severe,” and bankruptcy was only barely avoided.  In its 170 year history Thomas Cook has undergone a series of convoluted transformations, and it has survived many a downturn.  But it never once relinquished its marquee title.

Given the temper of our time, perhaps Cook’s recent brush with oblivion was to be expected.  Cook’s picturesque destinations — Egypt, Tunisia, Morocco, Greece — now offer torchlit barricades and street mobs spewing “off-with-their-heads” rhetoric. It is not exactly the stuff of tourist brochures.

The fear that Cook, the second largest travel agency in Europe, was on the verge of collapse caused immediate concern in Greece.  Annually, it brought more than one million tourists to the country, and its loss would have brought drastic repercussions.  Indeed, the tourist industry in all four nations has suffered drastically in the wake of the “Arab Spring” and the European recession of 2011.  But Egypt has suffered worst of all.

Ironically, in 2010 the Egyptian tourist industry had its best year ever.  Some 15 million arrivals were noted.  Overall, the economy had increased by a robust seven percent; oil and gas sales were up, as were Suez Canal revenues. Remittances from Egyptians working overseas were a steady influence on the economy.

In 2011 the tourist industry sector has suffered most in the economic downturn that followed Egypt’s January revolution.  One report at mid-year estimated that tourism revenue in Egypt would fall to $7.6 billion in 2011, down 35% from last year. It was hoped there would be a turnaround once the presidential election was held in September.  However, once that date was postponed, the expected rebound did not occur.

Recent reports indicate that through September of this year the number of tourists was down 42% from the previous year. And while few in the trade wanted to discuss the drop in remittances, the loss through September is estimated at $3 billion-plus.  The government has admitted the “economic slowdown,” but the reality has been much worse.  Unemployment is up, and foreign investment has been insignificant.

The crucial winter tourist season is approaching and is already considered a disaster.

An intriguing article on the impact of the Arab Spring on the tourist trade along the north coast of Egypt, to the west of Alexandria, appeared this summer. (  At El Masr, a resort located near Marsa Matruh, a famed Mediterranean tourist destination since Antony and Cleopatra, a visitor to the 550-room Hotel, noted a complete absence of tourists. With the exception of the party of three, there were absolutely, “no tourists to watch the soft darkness snuff out the iridescent turquoise of the sea.”

Only the starlings had returned to El Masr.

According to staff the hotel had operated at 40% capacity.  Staff wages had been cut.  Some layoffs had occurred. The hotel administrator was convinced that his usual British, German and Italian guests had chosen Turkey as their tourist destination. However, the question surfaces: Will the European tourists ever return to Egypt’s north coast.

The accidental tourist noted on a trip to nearby Marsa Matruh that he had entered “a conservative and religious place where black-robed women wear the veil,” and the ultra-conservative Salafist element were “hoping” to win pending local elections. Since the Arabization policies were implemented by Gamal abd al-Nasir in the nineteen sixties the Marsa Matrouh Governorate had been the preferred vacation destination of the Egyptian military.  Marsa Matruh itself still has a substantial military presence with presence of the Egyptian Air Force 102nd Tactical Fighter Brigade (F-7s, and Mirage 2000). The resort, enjoyed by Europeans, was also favored by summer tourists from Alexandria and Cairo who enjoy some of the most beautiful beaches on earth.

In contrast to Alexandria and Cairo where the Muslim Brotherhood predominates among Islamist leaders, Salafists are the most powerful element found in Marsah Matruh.  Dressed in long white robes and recognized by their long beards, the Salafist leaders reject modernity and preach a return to the ideals that prevailed during Islam’s first century. Their leader, Jabr Awad Allah, is a lawyer who has promised to ban booze and bikinis, and beaches for men and women will be segregated.  As he explains it, the Sharia, the Islamic legal code, will be practiced in his home, his community, and “in my country.”

Local politicians and Salafists in general had formerly been held on a short lease given the presence of a local National Security Agency bureau.  However, in February the bureau moved its operation to Alexandria, and the following month, after President Mubarak’s feared state security organization was disbanded and his Security Chief was hauled off to court by protestors, the Salafists were given new life.

Although a new national security agency was created to replace the old one, observers felt little had changed other than the name. Ostensibly, the new organization would respect human rights, while it ensured domestic security and combating terrorism. Nonetheless, an indication that the times were changing was the 9 July Salafist-led march through Marsa Matruh opposing the military in general and its leader Field Marshal Tantawi in particular.  Incredibly, there were no reprisals.

As elections are at hand, there are indications of a growing reaction to the Salafists as locals began to comprehend the economic consequences should they gain an election victory in the Governorate.  They now understand that should the Salafist slate take control of the governorate, one can kiss the tourist industry, and both European and Egyptian tourists, goodbye.

*J. Millard Burr, a Fellow at the Economic Warfare Institute, authored with Robert Collins, Alms for Jihad,,  Revolutionary Sudan and many other publications, and is a former State Department official.

Categories: Middle East Conflicts, Muslim Brotherhood

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