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
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.
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.
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.
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