AN­CIENT AND MOD­ERN CAIRO

Egypt’s cap­i­tal is suf­fused with his­tory and tra­di­tion, but scratch the sur­face and a city un­der­go­ing change at a dizzy­ing pace is re­vealed

Business Traveller - - CONTENTS - WORDS TOM OT­LEY

The chang­ing face of one of the world’s old­est cities

Re­turn­ing to Cairo af­ter a break of more than a decade, it can seem like noth­ing has changed. The neg­a­tives still jump out at you: it’s chaotic, hot, over-pop­u­lated and un­der­served by its in­fra­struc­ture. At the pe­riph­ery of the city, ugly mod­ern blocks of apart­ments are built right by the side of the road, al­ways un­fin­ished. Things im­prove closer to the cen­tre with the faded grandeur of the 19th-cen­tury belle epoque streets. High­lights in­clude the relics of the an­cient civil­i­sa­tion of Egypt col­lected in the di­lap­i­dated Egyp­tian Mu­seum on Tahrir Square, while to­wards the city’s out­skirts are the pyra­mids. There’s al­most a lulling con­ti­nu­ity to these ob­ser­va­tions; vis­i­tors to Cairo have been say­ing the same things for more than a cen­tury. Yet Egypt has had a re­mark­able decade, and the tur­moil is still con­tin­u­ing.

Roll back to the 2011 revo­lu­tion, fol­lowed by elec­tions that brought the Mus­lim Broth­er­hood into power, and it seemed ev­ery­thing would change; and it did, with a few years of un­rest and in­sta­bil­ity. Then the Broth­er­hood were over­thrown in a mil­i­tary coup, and Ab­del Fat­tah el-Sisi was in­stalled as pres­i­dent.

This year he won the le­git­i­mate elec­tion prac­ti­cally un­con­tested, but en­thu­si­asm was still in short sup­ply for his elec­tion vic­tory. News­pa­per Al-Ahram said that only 42 per cent of the el­i­gi­ble pop­u­la­tion voted (though that is still around 25 mil­lion vot­ers), and more than one mil­lion Egyp­tians spoiled their bal­lot pa­pers. The pos­i­tives of this re­sult are that the se­cu­rity sit­u­a­tion is def­i­nitely im­prov­ing , and there are fewer atroc­i­ties. Speak to Egyp­tians and they will say they are glad there is sta­bil­ity, and that they sup­port the gov­ern­ment’s

mea­sures to main­tain se­cu­rity. Such con­ver­sa­tions are self-se­lect­ing, how­ever, since you are talk­ing to peo­ple who stand to ben­e­fit from that se­cu­rity. Go on­line and dis­sent isn’t hard to find, and that’s de­spite the gov­ern­ment crack­ing down on free­dom of speech and po­lit­i­cal ac­tivism. Egypt’s par­lia­ment gave the state pow­ers to block so­cial me­dia ac­counts and pe­nalise jour­nal­ists held to be pub­lish­ing “fake news” – and that in­cludes Twit­ter and Face­book ac­counts, and blogs with more than 5,000 fol­low­ers.

FAC­ING CHAL­LENGES

Ev­ery­one is against fake news, but a free press mat­ters. To take one ex­am­ple, the crash of Egyp­tAir Flight 804 from Paris to Cairo in 2016 killing all 66 peo­ple on board was blamed by the Egyp­tian au­thor­i­ties on ter­ror­ism and lax se­cu­rity at Charles de Gaulle Air­port. French air­craft in­ves­ti­ga­tor BEA dis­agreed and, in turn, crit­i­cised the Egyp­tian au­thor­i­ties. BEA be­lieves it was an on-board fire that caused the crash. What­ever the truth, af­ter vi­o­lent un­rest and bomb­ings in Cairo, it pro­vided more rea­sons for in­ter­na­tional vis­i­tors to avoid the coun­try.

Ac­cord­ing to the World Travel & Tourism Coun­cil’s (WTTC) lat­est eco­nomic im­pact re­port on Egypt: “To over­come these chal­lenges, a gov­ern­ment-spon­sored ‘Egypt in our Hearts’ ini­tia­tive sub­sidised do­mes­tic hol­i­days for Egyp­tians.” This con­trib­uted to a “five-fold in­crease in the city’s [Cairo] do­mes­tic vis­i­tor ar­rivals over the past decade – the high­est of all ten cities [the re­port mea­sured] across both the Mid­dle East and Africa re­gions. By 2016, na­tion­als ac­counted for two-thirds of all travel spend­ing in Cairo.”

But what about in­ter­na­tional vis­i­tors? Well, it’s not an em­pir­i­cal method of as­sess­ing the pop­u­lar­ity of a city break des­ti­na­tion, but find­ing a guide­book to Cairo isn’t easy, with edi­tions by well-known pub­lish­ers at least two years out of date. Mean­while, there is no short­age of po­lit­i­cal or his­tor­i­cal vol­umes de­tail­ing re­cent events, although in­evitably these be­come quickly out­dated as more tur­bu­lence over­takes their nar­ra­tives.

For­tu­nately, the im­prov­ing se­cu­rity sit­u­a­tion is en­cour­ag­ing vis­i­tors to re­turn. The lat­est WTTC fig­ures show that tourism’s con­tri­bu­tion to GDP in 2017 grew by 72.9 per cent com­pared to 2016. For the UK, 61,481 Brits trav­elled to Egypt in the first two months of 2018, an in­crease of al­most 40 per cent com­pared to the same pe­riod last year.

The WTTC does, how­ever, fore­cast that the tourism sec­tor’s con­tri­bu­tion to Cairo’s work­force at

1.6 per cent in 2016 will ex­pe­ri­ence an an­nual growth of 5.7 per cent – nearly dou­ble the 3 per cent an­nual growth pre­dicted for the whole coun­try.

POUND FOR POUND

Vis­i­tors will be en­cour­aged by the ex­cep­tional value for money the des­ti­na­tion now rep­re­sents. The de­val­u­a­tion of the Egyp­tian pound in No­vem­ber 2016 saw the ex­change rate move from nine to 18 Egyp­tian pounds to the US dol­lar. The im­pact of cur­rency de­val­u­a­tion made Cairo one of the least ex­pen­sive cities to live in and, ac­cord­ing to Mercer’s Cost of Liv­ing Sur­vey of 2018, it fell by 45 per cent and 22 places in the rank­ing as the Egyp­tian pound lost half its value. How­ever, with the re­moval of sub­si­dies on petrol and elec­tric­ity, and in­fla­tion run­ning at 11 per cent this year, most ben­e­fits are felt by for­eign­ers.

What Egypt wants, of course, is in­vest­ment: in power, in in­fra­struc­ture, in new cities. Egypt’s pop­u­la­tion is around 100 mil­lion, but the ma­jor­ity live in Cairo, Alexan­dria and the Nile Delta. The most ob­vi­ous con­se­quence of this, to tourists at least, is the ap­palling Cairo traf­fic, but to those liv­ing there, it’s the hous­ing that is more prob­lem­atic and, as peo­ple are forced fur­ther from the city cen­tre, this puts more strain on the road and rail in­fra­struc­ture as they strive to get to their place of work ev­ery morn­ing.

Cairo’s pop­u­la­tion has dou­bled in the past 20 years to 26 mil­lion. Ac­cord­ing to The Econ­o­mist ( June 14, 2018), Egypt has a short­age of three mil­lion homes and al­most one mil­lion Cairenes live in slums, which the gov­ern­ment con­sid­ers un­safe, with­out ba­sic ameni­ties such as sew­er­age sys­tems or clean wa­ter, while thou­sands are still mak­ing their home in the four-mile-long El’ Arafa ceme­tery on Cairo’s out­skirts. →

The un­fin­ished houses you see on the ring road around the city are ev­i­dence of this hous­ing short­age, with the com­pleted floors oc­cu­pied and fur­ther floors wait­ing for ad­di­tional money. The Econ­o­mist es­ti­mated that “of Egypt’s 43m homes, 9m are va­cant and half of those are in­com­plete”.

Just be­hind the five-star ho­tels on the Nile, such as the Con­rad Cairo, the St Regis Cairo and the Nile RitzCarl­ton, is Boulaq, an area that is home to thou­sands of peo­ple liv­ing in slum con­di­tions. It is prime real es­tate and the in­ten­tion is to turn it into a high-end area called the Maspero Tri­an­gle, ac­cord­ing to a Foster+Part­ners de­sign. Rent con­trols mean peo­ple live here cheaply, al­beit in poor-qual­ity ac­com­mo­da­tion, but the re­lo­ca­tion of these res­i­dents will turn it into a neigh­bour­hood for the well-off.

There are also plans for a new ad­min­is­tra­tive cap­i­tal twenty-five miles out­side of Cairo, which will see many gov­ern­ment de­part­ments and for­eign em­bassies and con­sulates re­lo­cate to a huge de­vel­op­ment fi­nanced and built by Chi­nese money, the in­ten­tion be­ing that it will even­tu­ally house five-mil­lion peo­ple. It’s a grand am­bi­tion, but pre­vi­ous new towns have not helped re­lieve the pres­sure on Cairo very much. Many busi­ness peo­ple will end up stay­ing close to where their com­pa­nies are lo­cated in New Cairo to the south east, where there is a Dusit, Westin and Re­nais­sance Cairo, in the af­flu­ent sub­urb of Maadi or the new satel­lite town 32km from the cen­tre that is known as 6th of Oc­to­ber.

Some respite will come from off­shore. In the past, Egypt en­joyed greater in­vest­ment when­ever the price of oil went up and stim­u­lated for­eign di­rect in­vest­ment from nearby Gulf states.

Egypt also has the ad­van­tage of mas­sive nat­u­ral gas fields, in­clud­ing Noor, dis­cov­ered by Ital­ian com­pany Eni off the coast of North Si­nai; and the Zohr field, also in the Mediter­ranean. These will al­low it to be­come a net gas ex­porter dur­ing 2019, and help Egypt’s aim of be­ing a re­gional oil and gas trad­ing hub. And, of course, Egypt con­trols the Suez Canal, still one of the world’s most im­por­tant trade routes.

BRI­TISH IN­VEST­MENT

The UK has cer­tainly iden­ti­fied Egypt as a fo­cus. The UK is Egypt’s largest for­eign in­vestor, rep­re­sent­ing 41 per cent of for­eign di­rect in­vest­ment last year; and this year Bri­tish Trade En­voy to Egypt, Sir Jef­frey Don­ald­son, headed the largest Bri­tish trade del­e­ga­tion in nearly two decades with the em­pha­sis on oil and gas, ed­u­ca­tion, in­fra­struc­ture and health. Over 50 com­pa­nies took part, in­clud­ing ex­ist­ing in­vestors in Egypt, such as Bom­bardier, Fu­jitsu, Mott Mac­Don­ald and GSK, as well as com­pa­nies look­ing to in­vest there for the first time.

This was fol­lowed by Bri­tish Min­is­ter for In­vest­ment, Gra­ham Stu­art, ex­plor­ing op­por­tu­ni­ties for in­vest­ing in knowl­edge-in­ten­sive sec­tors, such as ed­u­ca­tion, tech­nol­ogy and fi­nance. The Egyp­tian gov­ern­ment is promis­ing re­forms that should im­prove ease of do­ing busi­ness, in­clud­ing clear and pre­dictable pro­cure­ment rules, and strength­en­ing the pri­vate sec­tor with open and fair com­pe­ti­tion.

Stu­art also held a round ta­ble dis­cus­sion with rep­re­sen­ta­tives of multi­na­tional com­pa­nies that have Bri­tish in­ter­ests, such as Ac­tis, Bom­bardier, Fu­jitsu UK, G4S, GSK, HSBC, Shell, Su­mit­omo, Unilever and Voda­fone. They af­firmed Egypt’s strong in­vest­ment po­ten­tial and dis­cussed how the Egyp­tian gov­ern­ment’s com­mit­ment to the IMF re­form pro­gramme, and to im­prov­ing ease of do­ing busi­ness, will lay the ground­work for fur­ther

The Egyp­tian gov­ern­ment is promis­ing re­forms that should im­prove ease of do­ing busi­ness

...fall dur­ing the north­ern hemi­sphere’s cold sea­sons.

There has been in­no­va­tion in the tech­nol­ogy sec­tor and small ser­vice-ori­ented busi­nesses. Since 2010, pub­licly funded seed ac­cel­er­a­tor Start-Up Chile has worked with more than 1,300 small busi­nesses. “Chile­con Val­ley” has at­tracted en­trepreneurs from 80-odd coun­tries. The Ford Foun­da­tion funded the train­ing of Chilean agron­o­mists which led, in turn, to the in­tro­duc­tion of new va­ri­eties of crops, such as yel­low corn. But Chile has a ris­i­bly low re­search and de­vel­op­ment spend, slow­ing progress across all tech- and science-re­lated sec­tors.

DE­SIR­ABLE DES­TI­NA­TIONS

In 2012, Brazil’s largest air­line Tam and Chilean flag-car­rier Lan merged to form Latam, the largest air­line in Latin Amer­ica. With a fleet in ex­cess of 300 air­craft and a dozen cargo and pas­sen­ger sub­sidiaries across South Amer­ica, it has a turnover of just un­der $8.5 bil­lion.

Head­quar­tered in San­ti­ago, Latam has helped turn San­ti­ago’s in­ter­na­tional air­port into a promis­ing hub – new ser­vices in­clude non­stop to Mel­bourne and one-stop to Dubai – while en­hanc­ing the pro­file of both cap­i­tal and coun­try as a tourism des­ti­na­tion.

What it lacks in culi­nary and cul­tural draws, Chile makes up for in al­lur­ing land­scapes: the Ata­cama salt-flat, Elqui Val­ley and Tor­res del Paine na­tional park are world-class at­trac­tions. In 2017, Chile an­nounced a 2,400km Route of Parks link­ing up 17 na­tional parks. Wine tourism, space tourism and ad­ven­ture tourism are all growth ar­eas. Ac­cord­ing to Veron­ica Kunze, head of plan­ning and re­search head at Fede­tur, Chile’s main tourism trade body: “In­ter­na­tional tourism has grown con­stantly and this trend is ex­pected to con­tinue, par­tic­u­larly with re­gard to spe­cial in­ter­est tourism. More and more peo­ple want to en­counter na­ture away from civil­i­sa­tion, which is pre­cisely what we have to of­fer.”

In­bound tourism has more than dou­bled in the past ten years. From 2016 to 2017, there was a 14.3 per cent in­crease. While many vis­i­tors, both busi­ness and leisure, are from Ar­gentina and other near-neigh­bours, Chile is now a main­stream rather than mar­ginal des­ti­na­tion for trav­ellers. Kunze says tourism is es­ti­mated to be di­rectly re­spon­si­ble for 3.4 per cent of Chile’s GDP and 5.1 per cent of em­ploy­ment.

THE SO­CIAL COST OF STA­BIL­ITY

Chile’s pri­vate sec­tor has a mas­sive stake in schools and uni­ver­si­ties, ex­ac­er­bat­ing in­equal­i­ties with re­gard to ac­cess. Be­tween 2011 and 2013, Chilean stu­dents led a se­ries of protests de­mand­ing more of­fi­cial sup­port and fund­ing for pub­lic ed­u­ca­tion.

Both the protests and en­su­ing vi­o­lence on the part of riot po­lice stirred mem­o­ries of the Pinochet era. They also re­minded Chileans that the gen­eral was an en­thu­si­as­tic ex­po­nent of neo-lib­er­al­ism, im­posed “at the point of the bay­o­net” ac­cord­ing to one aca­demic. At the time, Pin­era’s ap­proval rat­ing plunged.

Since then, there have been nu­mer­ous marches, smaller in scale, against pri­vate ed­u­ca­tion, anti-abor­tion laws, sex­ism and sex­ual ha­rass­ment. In late July of this year, cost-cut­ting and planned job cuts prompted strikes at Codelco’s Chuquica­mata open-pit mine in Calama in the Ata­cama desert. The min­ing union called for a strike at BHP Bil­li­ton’s Es­con­dida, the world’s largest cop­per mine; at the time of writ­ing, gov­ern­ment-me­di­ated talks with man­age­ment were be­ing ex­tended.

Other prob­lems lie in wait along Chile’s long bor­der, from new co­caine-traf­fick­ing routes out of Bo­livia to en­vi­ron­men­tal chal­lenges borne of the reliance on ex­trac­tion in­dus­tries.

The big­gest ob­sta­cle of all, how­ever, is the coun­try’s ab­ject fail­ure to re­dis­tribute the newly ac­quired – and, in some quar­ters, very vis­i­ble – new wealth. In terms of in­come, ac­cord­ing to the World Bank, Chile is the 20th most un­equal coun­try in the world: the rich­est 1 per cent of the pop­u­la­tion gets 33 per cent of the na­tional in­come, while the top 5 per cent pock­ets 51.5 per cent.

“In­equal­ity is a malaise deeply in­grained in the sys­tem that not only has not been dealt with, but that has wors­ened over the years,” says Chile21’s Gi­a­ca­man.

Be­tween the two ex­trem­i­ties of Avenida Lib­er­ta­dor Bernardo O’Hig­gins is the laid-back, rather ro­man­tic bar­rio of Bellav­ista. Here you’ll find uni­ver­si­ties, bo­hemian bars, and Chilean poet and politi­cian Pablo Neruda’s for­mer San­ti­ago home, La Chas­cona, now a mu­seum.

This is the cul­tured, thought­ful face of San­ti­ago, and def­i­nitely the place to stop for a cof­fee on your long hike. It re­mains to be seen whether Chile will con­tinue to aim for the An­des, for­get­ting its bloody past and im­pov­er­ished mil­lions – or will seek a mid­dle way.

Tourism is es­ti­mated to be re­spon­si­ble for 3.4 per cent of Chile’s GDP and 5.1 per cent of em­ploy­ment

...in­vest­ment. Speak­ing at the time, Stu­art said: “With Egypt’s eco­nomic re­forms and the UK’s de­par­ture from the EU, both coun­tries are go­ing through im­por­tant pe­ri­ods of tran­si­tion. These changes pro­vide the op­por­tu­nity to tear down bar­ri­ers to trade and in­vest­ment, strengthen our eco­nomic ties and grow an­nual trade num­bers from their cur­rent level of £3 bil­lion. The UK is Egypt’s num­ber-one trade and in­vest­ment part­ner – and my gov­ern­ment is de­ter­mined to see that po­si­tion main­tained.”

The im­por­tance of cre­at­ing jobs is ob­vi­ous in Egypt, where unem­ploy­ment stands at 13 per cent, with 41 per cent of the 100 mil­lion pop­u­la­tion un­der the age of 20 and 61 per cent un­der 30. No won­der the coun­try is the lead­ing ex­porter of cheap labour to the Mid­dle East and neigh­bour­ing Mediter­ranean coun­tries – nearly ten mil­lion Egyp­tians live and work abroad, a sig­nif­i­cant brain drain on the econ­omy. It’s where many of us have met Egyp­tians – in se­nior po­si­tions in ho­tels around the world, but par­tic­u­larly in the Mid­dle East. Iron­i­cally, ho­tels in Cairo have trou­ble keep­ing staff since hospi­tal­ity doesn’t pay par­tic­u­larly well in the coun­try, so once trained they tend to move abroad.

For all the prob­lems Egypt has had, it’s the peo­ple that may be the so­lu­tion. Mak­ing gen­er­al­i­sa­tions about 100 mil­lion peo­ple is never a good idea, but the re­silience and hard work of those you meet is ob­vi­ous, as is their renowned sense of hu­mour. Egyp­tians might not greet you with a smile, but it doesn’t take long for one to ap­pear once you start chat­ting. Rea­son enough to re­turn, along with the new Egyp­tian mu­seum open­ing at the end of the year.

ABOVE: Gezira Is­land (in the fore­ground) on the Nile river, cen­tral Cairo BE­LOW: A high pop­u­la­tion den­sity and poor in­fra­struc­ture con­tribute to Cairo’s ma­jor traf­fic prob­lems

TOP: Egypt has a young pop­u­la­tion ABOVE: The af­flu­ent sub­urb of Maadi

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