Thoughts on the future of Sharm

[Red Sea Shadow]

Three, I probably have forgotten more about economics than you will ever learn
Four, you didn´t adress one of my points with a solid counter-argument

Because your points, in the humble opinion of a poor Egyptian guy, are nothing but a pile of crap. Although this is not an economics class, I urge you to go for a refreshment, because you've obviously forgotten too much.

You asked what type of contingencies are there and I answered. Like it or not, more interference in our lives is not going to happen.

 

[macrobubble]

Well, if they are a pile of crap, pointing out why they are, would really be helpful in a discussion. Just accusing me of writing "bull****" doesn´t qualify as being meaningful. If you think this is not the place to discuss this, I would be really interested to get your thoughts by PN.

If you feel, you can escape an interconnected world (financially and economically), well, I don´t think so. Egypt is not an island in a vast and empty ocean. Disconnecting Egypt from the "West", because of whatever reason, would only work if you are prepared to be completely independent from outside resources - which Egypt surely isn´t and can not be for a variety of reasons. This is not a question of "meddling", "interference" or "undue influence", but rather of logic:

Generally speaking in a capitalistic society there are four fields of economic enterprises:
1 - state employment (administration, security, bureaucracy in general, education etc.)
2 - agriculture
3 - industrial manufacturing
4 - service industry

There are of course overlapping areas, but simplified that´s the main areas of a national economy.
Now, state employment can indeed create a lot of jobs, albeit inefficient ones, underpaid ones and it´s just a means to have a nice looking unemployment rate. Has been tried in several countries - didn´t work longtime. It doesn´t contribute to the GDP and leads to a massive bureaucracy with all the resulting problems.

Agriculture in Egypt is limited to the available sustainable land. Roughly only about 7% of the egyptian lands is feasable for agricultural development. This prohibits a population of more than 80 million to mainly work in an agricultural state. Furthermore, even if this was possible, the production would be far greater than the in-nation demand. An old problem, that the EU had to face for decades. Overproduction means either export (which produce and to where?) at market rates or lower if you want to cut a share in an already established market. Overproduction means sinking income! Egypt can, for obvious reasons, never be an agricultural state.

Now, industrial production. If you want to produce, market and sell something, there are requirements:
there must be a demand for the product
they must be of aceptable quality
they must be offered at reasonable prices
they must, ideally, be unique for not to compete at an already saturated market
Furthermore you must have the infrastructure, the know-how and the human resources to manufacture and distribute your product.
Whatever Egypt wants to manufacture on a lager scale, there will be no internal market to speak of. Low average household income will prohibit reliance on in-nation consumption. If you export, you are in competition with suppliers, that can offer the same product at better rates. Most european countries had to learn this the hard way. Some traditional industries have been wiped out completely (eg. clothing, steel, mining, etc.). That only leaves unique, high-tech products which can not easily be manufactured in third world countries because of lack of know-how and a trained, educted work force. Machinery, cars, ecological alternative energy sources etc.
Even if that would work for Egypt, if you could overcome all these obstacles, you would have to rely on foreign markets and therefore on foreign money to a great extend! Talk about dependency and meddling...

Then, what seems to be the other option, is the service industry. Here lies the one and only chance to create income on a larger scale because here Egypt has something very unique:
easy access from Europe
Beautiful shores for all types of vacation and watersport
a rich, interesting history to explore
365 days of sun
afforddable prices for europeans, even those with average or below average income, that could not go to other, more expensive destinations.
Of course, pricewise there is an ever increasing competition with asian destinations (Thailand, Philipines etc.) but the short flying times and the possibilities to "escape" for just a week from cold Europe give Egypt a strategical advantage.

Of course it would make sense to diversify. But cutting of the "leg" of a secured income for the country before establishing all the requirements for alternative economic venture would lead to desaster! Egypt has to start (in my humble opinion) by creating a political environment that allows to improve the educational system by a great extend (which costs a lot of money, btw.!). An educated population is the foundation for everything Egypt might want to achieve. Then Egypt needs to attract investment in other areas than just tourism. It might be feasable for international corporations to establish manufacturing plants on a greater scale here. Delivering semi-products to Egypt for endproduction (what, as far as I know, is already done to some extend) for re-export. That can only happen if there is political stability and, again, a trained and educated work force. So, for the next generation, those, that are born today, there is hope of ending the complete reliance on tourism as the main means on national income. Now you might say that tourism only contributes by about 11% to the GDP - but that, i believe, take ionly the direct flow of money into account. There is a huge economy structured around tourism, that is not part of this statistc. For example all the food that goes into feeding the tourists counts toward "agriculture" in the GDP, whereas it is directly and indirectly created by tourism. There are other areas which profit directly and indirectly from tourism. The self employed taxi and pick-up driver, the tour guide at the pyramides and so on.

I say it again: there are not quick solutions! There never are...
Don´t throw away what you´ve got before something better is in place. Hope and wishful thinking are no substitute for economical realities.

To make this absolutely clear:
I wish Egypt and the egyptians only the best. I live here, I love it here and I don´t want to see this country suffer any further. I also understand that in the emotional upswing after getting rid of Mubarak every egyptian now wants to "reinvent" the country. Patience and realism are a far better advisor than emotions and euphoria. There are many opportunities now for egypt - choose wisely. Everybody has to live with the consequences...

 

[Red Sea Shadow]

PMs, as you suggested, would be just fine, if and only if you reveal your identity. I don't feel comfortable communicating with people I don't know.

BTW, I've never mentioned there's an immediate solution. I'm also not aware I've ever mentioned throwing away anything!

Finally, people who know me know very well that I'm not that emotional guy.

 

[Crowley]

I love these debates sometimes! Probably they shouldn't happen on this forum but there's a few people out there with a lot going on inside their skulls and actually I enjoy reading the various perspectives, even if they do get a bit heated sometimes. I'd like to hope that if we all ended up in the same place we could enjoy a couple of Sakaras (or the non-alcoholic version, for the more devout) and laugh about it afterwards

Having said that - my own rant, which I deleted and rep-posted twice because I was in two minds (actually 17 minds) about whether or not it should even exist here was born of a very frustrating day, a lot of worry about the future and, it has to be said, one too many Sakaras! The part about the Tiran Bridge being opened for religious tourism was, by the way, taken directly from the Spiegel article that I mentioned in the Tiran Bridge post - and this comes from Saudi, not Egyptand although both countries would inevitably benefit, it is Saudia Arabia that is pressing the case for a bridge that Mubarak quite rightly dismissed over 20 years ago when it was first proposed.

Tourism as it stands brings a huge amount of money to Egypt - but as I understand it, percentage-wise it doesn't really compare to the Suez Canal, for example. What it does create, though, is many thousands of jobs for Egyptians, who by default learn the languages and customs of other nationalities, and increases their overall level of education and future job prospects. Some of the guys that started working in Sharm as tank boys have gone on to own their own boats, even manage an entire fleet of boats, or become respected DMs and Instructors. Some of the guys who, 20 years ago started working as waiters in hotels, are now in senior management positions. These things can only be beneficial to the entire economy.

With regards to the ongoing - hmmm - "discussion", I think both Shadow and macrobubble have valid points, from very different perspectives. When it comes to foreign loans, well, America is currently financed to the tune of 1 trillion dollars by the United States of China and foreign aid, therefore, is a double-edged sword. I take a bank loan to buy a new motorcycle and pay it back over 5 years - I am happy, the bank is happy with accumulated interest, everybody is happy until I for some reason default, and the bank takes possession of my motorcycle - or in bigger terms, the entire country.

My worry for Egypt at the moment is that there is no plan. Or rather, there are lots of plans but nobody to implement them because on the one hand we have a lot of people shouting, and on the other hand we have an increasingly intransigent military government who are clamping down on the same protests that they effectively supported six months ago. It will take time - lots of time, but many people want everything to happen *now* - and the same is true of any country that might find themselves in the same situation - if I had to make a rather appalling analogy, it takes years to build a skyscraper that can be knocked down in a matter of minutes by a couple of strategically placed explosions.

Given that this is a dive forum, and specifically related to diving, I don't think we matter in the slightest. Tourism will survive as long as we have pyramids and boats and (At least for non-Egyptians) alcohol is not banned and the wearing of the Burka is not required... but it will be a harsh blow to the country if tourism suffers because nobody comes to Egypt because they perceive it as unsafe, or if there is further fighting. Referring back to a previous post, my good friend was born in the country of Yugoslavia, which was fast becoming a top tourist destination, and then there was fighting, and the country suffered immensely because of this. 20-ish year later the new countries of Serbia, Bosnia, Macedonia, etc., are seeing a revitalisation of the tourist industry, but so many people lost out and the countries are so much in debt that the nationals are really starting to struggle.

Tourism by itself, therefore, is not the answer. It is a good thing, and a lucrative industry, but if people perceive the environment as unsafe, they won't come, and overall foreign investment will slow down. Although the overall wealth of the country might be sustainable through other enterprises, it will still leave many people without work which through basic laws of supply and demand makes the rich more rich and the poor more poor.

I still have my fingers crossed, but I am making my own contingency plans.

Cheers

C.

 

[macrobubble]

Tourism by itself, therefore, is not the answer. It is a good thing, and a lucrative industry, ... Although the overall wealth of the country might be sustainable through other enterprises, it will still leave many people without work which through basic laws of supply and demand makes the rich more rich and the poor more poor.

"Recent 2010 data shows 32 percent of the labour force is employed in agriculture, 17 percent in industry and 51 percent in services."
link

And yes, having a Sakkara together would certainly mellow the atmosphere of any discussion!

 

[Rhone Man]

There seems to be a lot of assent for the principle that tourists will not visit a state based on Islamic law, no matter how attractive it might otherwise be to tourists.

The organisers of the 2022 World Cup must be desperately hoping that is not correct.

 

[Tigerman]

I wouldnt hesitate to visit a country based on islamic law, but I definetly wouldnt visit one that dont stamp your visa when you cross the border, but a bullseye on your forehead

One of the problems in Egypt is that many dont grasp the scale of the country and how far it is between Cairo and south Sinai. Its not like people stopped going to Greece because there was a war in Kosovo. People seem to think that a border by itself is a better barrier than a longer distance is.

As far as people being afraid of sharks, atleast it stop them from walking on the reefs, as its (mainly) snorkelers thats afraid of sharks anyways

 

[Doubler]

Professor Ghuzlan had no sympathy. Mr Mubarak should be hanged if convicted, although “beheading by the sword” would be more traditional, he said.

He sought to paint sharia as a merciful alternative to Egypt’s current legal system, saying a thief who stole only to feed his family would not suffer amputation.

Despite his words, Muslim Brotherhood rule would evidently be harsh. Adulterers would be whipped, alcohol banned, men and women separated in university classes and pre-marital sex and same-sex relationships would be forbidden.

From an on-line story today.

 

[Tigerman]

Alcohol IS (in theory) banned in Egypt already, there's just an exception made for tourist destinations and (again in theory) should only be sold to tourists..

 

[Red Sea Shadow]

I still have my fingers crossed, but I am making my own contingency plans.

Hope all goes well with both the original and the contingency plans, as you already have some sort of "revolution" in the UK