Impact of Terrorism on Egypt's Tourism

Tourism in the Arab countries has become almost the sole economic and social mechanism to reduce rapid urbanization processes and to facilitate a decent standard of living in peripheral areas. In the Arab region, this is the case in Aqaba (Jordan), Sinai and the Red Sea (Egypt) (Mansfeld & Winckler, 2015).

Unique sights and monuments, comfortable climate, all-inclusive hotels, diving, beaches – all of it and so much more makes Egypt a popular and very attractive tourist destination. However, in less than 10 years the situation in Egypt changed dramatically - the Egyptian crisis, protests, forced change of the president and so on. It made a significant impact on Egypt's economy because Egypt is still known as a popular tourism destination.

Situation in Egypt’s Tourism from 2010 to Nowadays

The history of Egypt began a long time ago on the banks of the Nile River. We all know the Great Pyramids of Pisa, the Great Sphinx of Giza, the Valley of the Kings. All these and many more attractive features drive tourists to come to Egypt from all over the world, mainly from European countries (Ibrahim, 2013), no doubt that Egypt became a popular country to travel to and. Furthermore, tourism effectively contributed in economic and development of Egypt, making the total contribution of tourism industry in 2017 was 11,0 % of GDP (WTTC, 2018) and by 2010 the industry employed approximately 10% of the total workforce (African Development Bank, 2012).

In the paper ‘‘Is Tourism a Catalyst of Growth in Egypt? Evidence from Granger Non-Causality and the Generalized Variance Decomposition Analysis’, written by Chor Foon Tang and Ilhan Ozturk, authors empirically investigate the role of tourism in Egypt’s economic growth (Tang & Ozturk, 2017). Their main idea was that the effect of tourism on Egypt’s economic growth can be explained via two separate sectors – tourism sector which relies on labor and capital; and non-tourism sector, which relies on labor and capital as well as the output of the tourism sector (Tang & Ozturk, 2017). The output of tourism sector will generate the spill-over effect or positive externalities on the non-tourism sector and affect the economy as a whole (Tang & Ozturk, 2017). The result was positive: not only economic growth, tourism, and capital stock are cointegrated, but model also showed bi-directional causality between tourism and economic growth. Furthermore, tourism explained most of the variations in economic growth, especially in the long-run (Tang & Ozturk, 2017).

The amount of arrived tourists, the amount of nights that they spend in hotels, and revenue in this activity in general – those are the main three indicators, which are usually analyzed to understand what currently is going on in a tourism industry.

If we look at Trading Economics' statistics on Egypt's income from 2010 to 2018, we see three significant drops - in 2011, 2013 and 2016. The number of arriving tourists and the number of nights that they have spent in Egypt have the same trend as the revenue from tourism in general. It means that all of those factors were subject to general changes. Those years were taken for analyzing because before that everything was relatively normal, the amount of tourists was only growing. At the same time, citizen’s discontent with the government was increasing, but presumably it had no effect on level of tourism before it escalated.

So, what exactly happened that Egyptian tourism industry still cannot return to the previous high level and still deals with consequences?

Rise of Terrorism

Even though there were tourism crises in Egypt before (the Luxor massacre in 1997, the Sinai bombings in 2004), tourism crises from 2011 are different because of their duration. Tourism industry started to gain its share back only in 2017.

First incident happened in 2010 in Tunisia and it was named ‘Arab Spring Revolution’ that started massive chain on events on North African and Middle East countries for the next 4 years. The begging of the Arab Spring revolution did not involve any terrorist attacks in Egypt in particular, however, for some of terrorist groups it helped to become stable and raise their masses. The reaction of tourists was drastic and immediate and still Egypt cannot return to the level prior this event.

It all began on January 25th, 2011, when Cairo protesters gathered in the symbolic Tahrir Square, demanding the change of the government and resignation of ruling at that time for almost 30 years President Muhammad Hosni El Sayed Mubarak. Those protests took 18 days and military authorities could not hold back. However, the heaviest and most violent hassle took place on January 28th, which was called the ‘Friday of Anger’ (Mohamed, van Nes, & Salheen, 2015). People started gathering on different locations of the city with national flags and anti-government slogans and moving towards the Tahrir Square, citizens were shouting from their balconies. Government switched off the mobile connection and the Internet, because protesters used them to organize the revolution and update on news. The number of demonstrators became bigger, than the amount of police forces, which were disorientated in the city, because of the many places of hassle, so the latter had to use weapons - rubber bullets, tear gas, batons, live ammunition, and water cannons (Mohamed et al., 2015).

Protesters all over the Egypt started to fire headquarters of the ruling National Democratic Party, tried to storm the Egyptian Ministry of Foreign Affairs, town councils are on fire, prison escapes, stealing from museums. It was chaos. Later police forces were withdrawn because they lost the control of cities, only to be replaced by military forces, curfew was imposed. Important to say, that the hassle in Cairo was the ‘flicker’ to start rallies all over the country – Ismailia, Alexandria, Suez, El-Mansoura and so on. Military authorities have been brought to resort towns to protect tourists and hold back protesters. Many countries advised their nations to leave Egypt as soon as possible. In some time, police and military forces started to move on protesters side, demanding the President’s resignation as well.

On February 11th, president Hosni Mubarak resigned and handed the control to Supreme Council of the Armed Forces, which controlled the Egypt before democratic election gave the Muslim Brotherhood the power of ruling.

In the wake of the revolution, the Islamists — the Muslim Brotherhood movement (led by Mohammed Hussein) and the Salafists — strengthened noticeably. There was a growing tension between the liberal and Islamic forces of Egypt over disagreements over the country's future. The rise of the Muslim Brotherhood led to the creation of Islamic political party called the Freedom and Justice Party and the election of the president from the party of Mohammed Morsi. Liberal parties wanted the new constitution, which should be adopted after the parliamentary elections, to include provisions for the protection of individual rights and religious freedoms. The army, which came to power, agrees with this. However, the Muslim Brotherhood and other Islamist parties are in favor of the earliest possible election and the declaration of Egypt as an Islamic state. However, democratic election did not help to stabilize country’s state and led to the new wave of uprising. The new president and the elected parliament made the creation of the new constitution under Sharia law a main focus of the new government. This led to increasing tension between Morsi, the Constitutional Council, the opposition to the Supreme Constitutional Court, and the military. Despite various achievements during his one-year presidency, Morsi’s increasingly repressive and cumbersome approach to governance, and his failure to manage well-entrenched elite interests, permanently undermined his capacity to govern effectively (Housden, 2013). No doubt, that those outbreaks negatively affected tourism in Egypt because the chaos was in every corner of the country.

Next event that negatively affected tourism in Egypt was the Egyptian protests that resulted in President’s resignation once again. There were many reasons for the second crisis: the Morsi administration’s dismissive attitude toward its critics; its inability to mobilize the machinery of state to address basic concerns of an impatient citizenry; the opposition’s reliance on extra-institutional means to reverse unfavorable electoral outcomes; state institutions’ disruptive foray into partisan politics; and collective resort to street action to resolve differences (International Crisis Group, 2013).

The drop in tourism this time was greater because the coup took place between two very strong opponents - President Mohamed Morsi, the country's prime minister Hesham Qandil, the Muslim Brotherhood on the one hand, and the commander of the armed forces, Abdel Fattah el-Sisi, and the interior minister, Mohamed Ibrahim, on another. Islamists on one side, military on the other. The latter was also supported by a nation that was unhappy with the imposition of Islamism through parliament and the Muslim Brotherhood.

On 1st July Egyptian people gathered once again demanding the resignation of a president, which gave the army the opportunity to issue the 48-hours deadline for an official statement from the government and meet demands, it was followed with the majority of ministers resigning. On the following day protests between supporters and opponents of Morsi’s regime took place and late night he came up with the TV statement that he would give his life to defend constitutional legitimacy (BBC, 2013).

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On 3rd July military tanks and vehicles drove through Cairo and Morsi had to declare resignation and had no other choice rather than agree to be put under home arrest. After that temporal government with initiative from Abdel Fattah el-Sisi started to trace Islamists from the Muslim Brotherhood Party, which resulted in the Rabaa massacre in August.

After being suppressed, Islamists from Egypt that were not killed or put in prison moved to countries where it is relatively easier to take control over the country, for example Syria, where Civil war began after the beginning of Arab Spring or Iraq. As central governments have lost control over territory and have lost their monopoly over the use of violence, Islamist groups have been the most prominent of those who have stepped in to fill the breach (Meacham, Q., 2014). Using fear and violence they have managed to take control over new destabilized territories, where Arab spring led to state failure.

It took Egypt a year and Sisi’s effort to slowly stabilize country’s state. For Egyptian people he became some kind of a hero: His triumph in the presidential elections held in May was not a surprise, given the broad public support he received for his role in the removal of the Muslim Brotherhood regime on June 30, 2013; and the fact that the Brotherhood was declared illegal and had been banned from participating in the electoral process (Aly, A. M. S., Monem, A, 2014).

Because of uncertainty and unpopularity, many countries advised their residents to avoid going to Egypt except urgent and business visits, travel agencies cancelled tours as well as excursions. Furthermore, Egypt had other problems facing the development of a sustainable tourism industry, such as: the shortage of an adequately qualified workforce, an underdeveloped transport network and infrastructure, impediments in the structural and institutional framework, the breaching of environmental regulations, and the high cost of doing business for SMEs (‘OECD Tourism Trends and Policies, 2010’, 2013).

Sinai Insurgency and Terrorist Attack in 2015

Sinai is historically known as a very unstable peninsula. The smuggler’s routes and underground tunnels run through it, there is underdevelopment and, as a consequence, local population’s poverty and unemployment. The majority of population is Bedouins and Palestinians, who are culturally detached from the Egyptians; furthermore, they believe that they are being marginally discriminated. This discontent turned to be one of the reasons why citizens started to smuggle, they are very easy to manipulate because smugglers provide them with money. However, at the same time this is a geopolitically significant region due to its geographical position between Africa and Eurasia via the Suez Canal. It is surrounded by Arab countries that still suffer from Arab Spring aftermath. The Sinai’s longstanding smuggling routes are being used by militant groups to stockpile arms for use in attacks in the peninsula (Dyer, E., Kessler, O., 2014). The majority of weapons smuggled into the Sinai arrive from Libya in the west, the Gaza Strip in the east, and the Sudan in the south (Dyer, E., Kessler, O., 2014).

After Morsi resignation on 2013, the activity of Islamist militants has increased. Every other month articles about the attacks appeared in the news. From that time and to the present day the biggest and probably the most powerful terrorist organization is Islamic State of Iraq and the Levant (ISIL) or also known as Islamic State of Iraq and Syria (ISIS). Their main goal in a long run is establishing the biggest Islamic state and ‘conquer the world’. In a short term they have two categories of goals. The first goal is to support organizational survival. This category includes recruiting new terrorists, winning support, especially financial, from peers, gaining access to safe havens, and attracting media attention to spread the group’s ideology (Neumayer & Plümper, 2016). The second one is to weaken governments of desired territories. This category includes killing selected representatives of the government, destroying infrastructure, reducing the military support the governments receive from other nations, reducing the financial capabilities of the government, and so on (Neumayer & Plümper, 2016). Also, it is obvious that they are also trying to badly influence activities that bring big revenues in countries’ budget and on which countries rely on. For Arab countries, as it was already previously mentioned many times it is tourism.

There were several terrorist attacks that ISIS took responsibility for and that led to death of tourists, from 2014 they happened every year. These are just a few of them: the downing of Metrojet flight 9268 in route to St. Petersburg on 31 October 2015; the suicide bombings and armed attacks in Paris on 13 November 2015; the armed attack in San Bernardino, California, on 2 December 2015; the suicide bombings at the Brussels airport and metro station on 22 March 2016; the suicide bombings and armed attack in Istanbul’s Atatürk Airport on 28 June 2016; and the massacre by truck in Nice on 14 July 2016 (Sandler, 2016).

The majority of terrorist attacks affect Western tourists and this is not accidental. Not only will this generate considerable media attention, but such attacks also target the major sources of tourist inflows and the victims come from countries whose governments often support militarily, politically or economically the governments in Islamic countries that the terrorists wish to overthrow (Neumayer & Plümper, 2016).

After the beginning of Arab Spring, the first attack happened on 16th of February in 2014 in Taba, one of the Sinai vacation destinations. The bus with Korean tourists planned to cross the Taba border and arrive in Israel. A bomb attached to the bus and detonated by either a timer or remote control caused the explosion. The bomb was reportedly placed on the bus at a roadside stop on the drive from St. Catherine to Taba, and detonated as the bus waited near the Taba Hilton Hotel to obtain permission to cross into Israel (Times of Israel, 2014). This attack led to the death of a driver and three Korean tourists, eleven of other twenty-eight tourists were injured.

The second terrorist attack let to death of 224 people and it was bombing of the Metrojet flight 9268. The effect of it was crucial for Egypt, because in 2015 before the attack, almost two thirds of tourists were Russians (Oxford Business Group, 2018). It is not a secret that it was one of the most popular vacation destinations amongst Russians, who therefore had a big impact on tourism revenue and hotel occupations.

On 31st October in 2015 the Kogalym Avia’s airplane operated a flight from Sharm El Sheikh to Saint Petersburg. There were 217 passengers, 24 of whom were children, and seven crewmembers, 212 of tourists were from Russia, four were from Ukraine and one person was from Belarus (Ministry of Emergency Situations, 2015). They were going back home from vacation on several Red Sea resorts. It happened right at the time, when Egypt was trying to tell the world that it is safe and open for tourism.

After almost 20 minutes of leaving Sharm El Sheikh airport the captain of the flight turned the airplane to the left to fly above the Sinai Peninsula, it was according to a flight plan. After that the crew had to contact Cyprus Air Traffic Control bit it didn’t, after that Russia’s Federal Air Transport Agency confirmed that the aircraft went off radar after 23 minutes of flight (RIA News Portal, 2015). According to the Flightradar24, the airplane abruptly started to lose the speed, voice recorder recorded a loud extraneous sound, and after a minute it crashed on Sinai Peninsula. It was later investigated that the wreckage of the aircraft was scattered over 13 kilometers.

Even though authorities from Russia and Egypt blamed technical difficulties at first, after almost four months of investigation by it was declared that there was in fact a bomb explosion on board, the bomb was in a can, hidden under suitcases and baby carriages. In investigation take part representatives from various aviation departments from Egypt, Russia, France, Germany, Ireland, USA and consultants from Airbus company and IASA. Shortly after the incident, ISIS took responsibility of this crash. Prime Minister Dmitry Medvedev was instructed to form a state commission in connection with the crash of the Kogalym Avia aircraft in Egypt. The head of state demanded to find, destroy the terrorists involved in the death of Russians and to strengthen avia attacks in ISIS in Syria. For any information about criminals, who are guilty of this attack Federal Security Service of the Russian Federation promise the remuneration of 50 million dollars (Federal Security Service of the Russian Federation, 2015).

The reaction of the world was immediately after the news that the cause of the disaster could be the explosion of a terrorist bomb. Many avia companies (Emirates Airlines, Flydubai, Lufthansa and so on) and countries (Germany, United Kingdom, Ireland, France and so on) cancelled all flights over Sinai Peninsula and those that were heading to and from Sharm El Sheikh. In some time, flights were permitted for foreigners to come back home but with enhanced security conditions. On 6th November, the President of Russian Federation, Vladimir Putin, after the suggestion from National Anti-Terrorism Committee, made a decision to suspend all avia communication with Egypt. Urgent flights from Egypt back to Russia were organized as soon as possible, Russians were allowed to take only hand luggage to the board, while suitcases were delivered separately by Ministry of Emergency Situations flights. Regular flights resumed only on 12th April 2018 only between Cairo and Moscow.

This time the drop was significant because the terrorist bombing was directly aimed at tourists, causing many countries to ‘block’ tourism with Egypt. Furthermore, the timing was also chosen ‘perfectly’ because right at that time Egypt tried very hard to show that after the Arab Spring it is safe to travel to and it has many pleasant features for tourists.

Future Plan and Prospects

As a policy implication, policy-makers in Egypt should find and implement the strategies which will promote tourism industry to obtain higher economic growth in the future. For example, more efforts should be concentrated on the means of security issues, tourism infrastructure, sites, facilities, and other that can enhance tourists’ choice of Egypt as their visiting destination. In addition to that, macroeconomic stability such as inflation rate and exchange rate must be under control as these are costs of tourism that will directly affect tourists’ choice of Egypt. Of course, more tourism campaigns and educational programs must be implemented to introduce and promote the uniqueness of Egypt to attract global tourism. To do so, the Egyptian government should encourage private and public organizations to improve the existing infrastructure and the country’s image in order to achieve higher room occupancy. As a result, tourism would be an effective vehicle to drive long-term economic growth in Egypt (Tang & Ozturk, 2017).

References

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