Thursday, December 11, 2008

Egypt - Old Nation, Old Cars, and cheaters everywhere

Egypt history is amazing with 4 thousand years of 'civilisation'. However, the current situation is really pathetic and very very sad indeed.
Pyramids and temples can stand centuries in great shape but the new buildings look like going to tumble anytime soon. The most noticable is the number of old cars on the road. These cars are older than myself with no traffic light in the whole Cairo.
As tourist or foreigners, you shall not trust anyone who look very friendly and approachable. These egyptians may cheat you in slightest opportunities. I was cheated in numerous occassions and this is a muslim country, a land of anbiyas!

More from my son's blog here.


The traffic is as jammed as ever and the noise is still a constant accompaniment to daily life, but things seems different in Cairo: the mood of the city more sombre, as if people know there’s something wrong, that bad times are coming and there’s not a lot they can do about it.
The headline economic figures still point to growth next year of more than five per cent – a two point decline from this year – but the government keeps having to revise it downwards, and while the rest of the world is struggling with the fall-out from the actions of some incompetent bankers, Egypt is having to cope with not just the global credit crisis but a whole mess of local problems that seem likely to have a significant and detrimental impact on the country’s prospects.
First, there’s tourism. The industry has been thriving for the past few years. Revenues increased by 32 per cent last year, and the number of visitors was up by 25 per cent to just under 10 million. In fact, the country’s tourist infrastructure was barely able to cope, as anyone who has tried to book a last-minute room in Cairo during the high season can testify. But already this season there are fewer people clogging up the five-star lobbies, while the talk among the tour companies in places such as Luxor is, “Where has everyone gone?”
Last August the investment bank EFG-Hermes said it expected tourism to grow next year by 18 per cent: that would still bring in a much-needed $12.5 billion in revenue, but now seems optimistic – remember, this assessment was released in August (which now seems a lifetime away), before the collapse of Lehman Brothers, which might as well mark the official start of this current mess. People in a wintry Europe might dream of an Egyptian sun, but the collapse of the pound means that those living in the UK are looking at pictures in their holiday brochures that have just become 25 per cent more expensive. The euro has fared better, but the economies of Germany, Italy, and Russia, from where the bulk of the tourists visiting Egypt come, are still in trouble – and in troubled times, people are sure to cut down on their holiday spending.
So far so bad: but then we get on to the other areas where things are heading for a downturn. Oil and gas exports brought in $25 billion last year, but that was during those heady days of a barrel costing more than $100. Now it’s $50, and no matter what Opec decides to do it seems unlikely to rise significantly higher. Remittances from Egyptians working abroad brought in $3.3 billion, more than half of it from Saudi Arabia. Now that GCC governments have begun to confront what’s facing them economically, nobody should count on the same amount next year.
The Egyptian stock market, in particular the benchmark Case 30, has also collapsed back towards where it was when the economic reforms began in 2004. Some people I know in Cairo, who were caught up in the idea that the market could only ever go up, have lost tens of thousands of dollars: and they weren’t the mega wealthy – just people who thought the good times would keep on rolling. As if all that weren’t enough, there’s another problem no one saw coming – the Somali pirates.
Revenue from the Suez Canal rose by 24 per cent last year to $5.2 billion. To be fair, the government had been expecting a decrease after a slowdown in international trade, but to be hit by piracy? It’s true that the Somalian pirates have been around for a while, but their capture of the two million barrels of oil being carried by the Sirius Star changed the rules of the game.
The Egypt government is now talking about using the military, but it’s a question of “You and whose navy”, since there are a couple of million square miles to police and even a multinational task force couldn’t stop all the attacks. And it’s beginning to hurt Egypt: several shipping companies are already refusing to send their ships through the canal, and others will no doubt join them if the attacks continue or if something spectacularly nasty happens to the Sirius Star.
It’s difficult to know what the government can do. Over the past few years they have been trying to reduce the country’s dire poverty levels through the creation of a high-growth economy that was designed, eventually, to raise everybody’s standard of living. Instead, what happened was that the already rich got a lot richer while the poor have had to cope with inflation at around 20 per cent, the removal of subsidies, and large increases in the cost of their essential goods – such as food, fuel and (since this is Egypt) cigarettes. The one upside is that inflation is coming down – but at what cost?
It was the rising of the star Sirius that used to mark the annual flooding of the Nile – which would determine how the country fared over the next year. Egyptians can only hope that with the capture of the Sirius tanker the old Gods are not sending a message that their country is about to enter the dog days.