CAIRO: Ramadan Ibrahim counts himself among the casualties of the Iraq war as he looks out at the Great Pyramids of Giza. The surrounding parking lots are empty, the tourist shops deserted. In his stable, all 45 of his Arabian horses are idling away the day in their stalls.
“Where are the tourists?” he asks, before answering himself: “Far away. In their homes. The war makes everyone think of nothing but war. We are not Iraq, but people think they will get shot if they come to Egypt. Will they ever come back? Only God knows.”
Usually in March and April, the height of Egypt’s tourist season, Ibrahim’s guides would be leading 15 or 20 riders through the desert on a sunny, cool morning like this. Hotels from Cairo to Luxor would be operating at full capacity. Restaurants along the Nile would be turning away customers. Flights in and out of Cairo would be over-sold.
But these days one of the world’s great tourist destinations has been all but forgotten, and economists estimate the war could cost Egypt up to $8 billion in lost revenue from several sources, including tourism, the Suez Canal and exports.
Egypt’s troubles reflect economic concerns facing the Arab world overall. A United Nations’ agency previously estimated that the 17 Arab countries could see $400 billion in lost productivity and the loss of 2 million “job opportunities” in the next decade because of war.
Most estimates projecting the war’s catastrophic impact, including the UN one, were made before the US-led invasion was launched March 20. Because the war ended up being of short duration, did not spill over Iraq’s borders and resulted in a regime change, economists believe the losses may have been overstated. They say it will be impossible to accurately tally up the costs and assess the long-term economic effect until Iraq’s future is clearer and the implications of Saddam Hussein’s overthrow on regional balances is apparent.
“There is an enormous amount of uncertainty as to what institutions, what form of governance, is going to emerge from the post-war situation,” Jean-Louis Sarbib, a World Bank vice president, said in Washington two days after Baghdad’s fall on April 9. “The situation is too unclear for us to say which way the chips are going to fall.”
While reconstruction of Iraq could give an economic boost to the region, in the short term analysts expect declining tourism, investment, trade and transport.
Iraq was Jordan’s major export market, and it was one of Egypt’s largest trading partners. Iraqi oil, some of it smuggled, was an underpinning of the Syrian economy. Egypt, Jordan, Lebanon, Tunisia, Morocco and Dubai, a Gulf emirate, are expected to suffer most because they are heavily dependent on tourism.
In Egypt, tourism is a $5 billion-a-year industry that employs 2.2 million people and is one of the country’s major sources of foreign exchange. Last year tourism hit record levels in several Middle East countries as many Arabs, particularly those from the Gulf states and Saudi Arabia — who traditionally vacation in the West — decided to stay closer to home. The reason: security concerns and fears they would receive a hostile reception in the United States in the aftermath of the 9/11 terrorist attacks.
“The problem isn’t cancellations; it’s no new bookings,” says Riyad Lotfi, general manager of the Sheraton Royal Gardens in Cairo. “People check out and no one’s coming to replace them. That’s left hotels with about a 20 percent occupancy rate.”
Industry officials say because of war-related concerns, Egypt will be lucky to attract 3 million tourists this year, compared with 5.2 million in 2002. Tourist revenue may fall by nearly half. Reduced hotel rates and an international advertising campaign using CNN and other media outlets have apparently done little to reverse the downturn.
“We don’t believe lower prices will do much to help, because the key is the intent to travel,” said Ali Chiati, co-director of Travco, one of Egypt’s major travel wholesalers. “Right now, people don’t seem to have the intent to travel. They are not in a mood to enjoy themselves. They know the mood on the Arab streets isn’t healthy with a lot of anti-American and anti-British feelings.
“So people would rather stay home. They’re waiting for the mood in the streets to improve and the chaos in the Middle East to subside before they start thinking about coming back.”
Although the State Department has issued no travel warning for Egypt and there is no indication that the 15,000 Americans who live in this security-conscious country feel endangered, the Iraq war marks the fourth serious setback for the tourist industry in 12 years, following the Persian Gulf War of 1991, the killing of 58 foreign tourists by Egyptian extremists in Luxor in 1997 and the 9/11 terrorist attacks in the United States in 2001.
The Arab world’s war-related uncertainty is particularly worrisome in an economically troubled and woefully underdeveloped region with little industry .
Egypt’s economy has been in a downturn for three years. The region’s other dominant economy, Saudi Arabia, has seen its per capita income tumble since the heady oil boom, and the quadrupling of oil prices, in the 1970s.—Dawn/The Guardian News Service (c) Los Angeles Times