Date: 5/8/04
www.washingtontimes.com
Last year's U.S.-led war against Iraq and the outbreak of severe acute respiratory syndrome combined to deal a severe blow to the travel industry worldwide, but Egypt defied the trend, attracting a record 6 million foreign visitors, a 16.4 percent increase over the past year.
The sharp depreciation of the Egyptian pound, which followed the floating of the currency in January 2003, and an aggressive and international advertising campaign contributed to the sector's strong performance as the country's top foreign-exchange earner, bringing in $4.3 billion.
Mamdouh El Beltagy, who was the tourism minister until early this month and is now Egypt's information minister, estimated that the number of tourists this year will exceed 7 million. He said that in the first five months of 2004, Egypt had 3.2 million foreign visitors, up 68 percent from the same period last year.
By all indications, he said, the sector is on track to meet and even surpass the government's conservative five-year tourism goal of about 7.5 million tourists and $6.9 billion in foreign-exchange earnings by 2006-07.
Despite the region's hazards, Egypt's average rate of tourism growth was 9.2 percent during the period from 1993 to 2003, he said. This was more than double the Egyptian economy's overall growth rate in that period.
The upward trend in tourism contrasts sharply with more sluggish sectors of the economy -- from manufacturing plants to banks and insurance companies -- still weighed down by government-run enterprises.
In contrast, tourism is fully liberalized with no limits on foreign direct investments, the right to liquidate and transfer capital and profits abroad, and a generous 10-year tax holiday, he said. Moreover, the sector has fully recovered from the 1997 Luxor massacre, which brought the industry to its knees, and the September 11, 2001, terrorist attacks on New York City and the Pentagon, which adversely affected tourism to Egypt for nine months.
In light of the terrorist threat, the government has spent huge sums to repair Egypt's image and beef up its security and anti-terrorism capabilities.
Indeed, Egyptian officials like to point out that the country has not had a single terrorist incident since the Luxor attack, in which 62 persons were killed by Islamist militants. The upturn in tourism also helped cushion the loss of trade with Iraq, Egypt's largest trading partner.
The infrastructure demands for the increasing inflow of tourists -- modern airports, road networks, ports, telecommunications, intentional-standard hotels, catering and tour facilities -- is having a positive spillover effect on the rest of the economy.
Egypt's infrastructure "had to radically change" to cope with the influx of tourists, especially in remote areas, Mr. El Beltagy said.
"Egypt has always been visited for its history and culture," he said, adding that the country also is developing vacation resorts on the Red Sea Riviera, such as Sharm el Sheik, and on the Mediterranean coast. The country also is developing safari and ecotourism and health tourism, he said.
Looking ahead, Aviation Minister Ahmed Shafiq Zaki said renovations and the addition of a third terminal at the Cairo International Airport, financed by a $335 million loan from the World Bank, will increase its capacity to handle more than 20 million passengers a year -- double its current capacity -- and make it a regional hub for Africa, especially North Africa.
"We need to provide better services in the tourist domain," he said.
He said that Egypt is preparing with joint-venture partners to build a new airport in the Suez region. Plans also are under way to increase the main air-cargo hub in Cairo and expand the hub for cargo and passengers near Sharm el Sheik.
Capt. Sherif Galal, chairman and chief executive of national carrier EgyptAir, told The Washington Times that the airline plans to increase its fleet to 70 aircraft by 2007, up from 37.
Most of the fleet consists of Airbus aircraft, of which six more are on order.
But Capt. Galal did not rule out buying Boeing aircraft if the Seattle-based manufacturer could match the terms of Airbus.
"If Boeing gives us a good offer, we will look into it," he said.
In June, the Bush administration offered to provide Egypt with $2 billion in loan guarantees.
Fayza Abul Naga, minister of international cooperation, said this was the first time that such an offer was made by the United States. She called it a "very positive sign and a show of confidence on the ability of the Egyptian economy and reforms."
In 2003, U.S. exports to Egypt totaled $2.7 billion and imports from Egypt were valued at $1.1 billion.
The United States also has authorized a grant of $300 million approved by Congress before the outbreak of the Iraq war. |