Egypt reopens slowly to revive coronavirus pandemic-hit economy

Egypt shuttered shops and cafes in late March but is slowly reversing some of these measures. (Reuters)
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Updated 06 May 2020

Egypt reopens slowly to revive coronavirus pandemic-hit economy

  • ‘Many other businesses continue to remain open, albeit with reduced staff, and construction is continuing’
  • ‘The state must encourage the private sector on a macroeconomic scale so that it can overcome the crisis’

CAIRO: Egypt’s economy had just started to recover after years of political turmoil and militant attacks when the coronavirus crisis hit, impacting especially its vital tourism sector.
Now President Abdel Fattah El-Sisi’s government has loosened a strict curfew for the Muslim holy month of Ramadan in an effort to kickstart North Africa’s largest economy.
Having shuttered shops and cafes in late March and forced millions of civil servants to stay home, it is slowly reversing some of these measures, bringing back many state workers and extending the trading hours of shops and malls.
The blessing for the emerging economy of more than 100 million people, experts say, is that activity has kept ticking over in agriculture and construction, and especially in the vast informal sector.
“Twenty-five percent of the workforce is in agriculture, which remains unaffected,” said Angus Blair, a business professor at the American University in Cairo.
“Many other businesses continue to remain open, albeit with reduced staff, and construction is continuing.”
Egypt’s main sources of foreign currency have been tourism, remittances sent home from workers abroad, and Suez Canal revenues — which have all dropped sharply during the global lockdown in travel and trade.
But more than half of Egypt’s private sector is made up of the so-called informal economy — ranging from streetside fruit sellers to day laborers on construction sites to one-man auto repair businesses.
Around four million workers make up this shadow economy comprised of low-paid irregular laborers.
“The large informal sector, while finding conditions slower, will continue to function,” predicted Blair.
The challenge is huge for Egypt, where nearly a third of people live below the poverty line, many more face precarious conditions and social order has traditionally been maintained by a strict military apparatus.
Slow growth and fewer jobs may have “a temporary impact on poverty rates in the country,” warned Alia El-Mahdi, former dean of Cairo University’s faculty of economics and political science.
“The state must encourage the private sector on a macroeconomic scale so that it can overcome the crisis.”
The El-Sisi government approved a $6 billion (100 billion Egyptian pounds) aid package to stem the fallout of the coronavirus, which has caused 400 deaths and nearly 7,000 infections according to official data.
This included payments of 500 pounds a month to informal workers who lack any social insurance to fall back on.
Cairo also sought a fresh loan from the International Monetary Fund last month and cut its interest rates in March to encourage lending for individuals and businesses.
The biggest cash-cow, tourism, has however taken a heavy blow as the COVID-19 pandemic shuttered travel worldwide.
It was all the more painful after the country famed for the Pyramids, Nile river cruises and Red Sea resorts had last year booked tourism revenues topping $12.6 billion, the highest in a decade.
Mahmoud Al-Dabaa, a travel agent in the popular seaside resort of Sharm el-Sheikh, said he was shocked at how the once bustling travel destination had turned into a ghost town with deserted beaches.
“It’s the first time I see Sharm completely empty like this,” he said.
Dabaa had expected this season to also be profitable, but a string of canceled bookings signals a bumpy road to recovery.
On Sunday, the government announced that hotels may start operating again for domestic tourists, provided they stick to a limit of 25 percent of capacity until the end of May.
From the start of June, this will rise to 50 percent, reflecting the authorities’ confidence they can keep infections under control while jump-starting the tourism sector.
Egypt hopes to get back to the relatively better times of recent years, which saw annual economic growth rates above five percent.
The government has been implementing financial reforms since 2016 when it secured a $12 billion IMF loan, and investors have flocked back in recent years, driving a booming construction sector.
As recently as January, Egypt was ranked among the top ten countries in Morgan Stanley’s Emerging Markets Index.
Planning Minister Hala El-Saeed has estimated that the economy will slow down to about 4.5 percent growth in the third quarter because of the aftershocks of the virus.
But Blair said he was optimistic of a gradual recovery, judging that, if the constraints loosen further in June, a broader revival of commercial activity could “drive economic growth further late in the third and fourth quarters this year.”


Egypt arrests alleged serial sexual predator

Updated 04 July 2020

Egypt arrests alleged serial sexual predator

  • Allegations have been widely circulating on social media detailing horrific sexual abuse and related blackmail suffered by women at the hands of the same man
  • Trending hashtags carrying the alleged abuser’s name widely circulated on Twitter and Facebook, urging government action

CAIRO: Egyptian authorities on Saturday arrested a man who allegedly sexually abused dozens of girls and women, in a case that has sparked outrage online, a security source said.
Allegations have been widely circulating on social media since Wednesday detailing horrific sexual abuse and related blackmail suffered by women at the hands of the same man.
One allegation claimed that he attempted to abuse a 14-year-old girl.
“The person accused of harassing the girls has been arrested and will be facing the prosecution following the allegations carried on social media,” the security source said.
“Those affected should submit formal reports of the harm they endured,” the source added.
The source did not identify the suspect.
According to the social media reports, the first of which was published on an Instagram account, the abuse had been going on since at least 2018.
Trending hashtags carrying the alleged abuser’s name widely circulated on Twitter and Facebook, urging government action.
Egypt’s National Council for Women (NCW) lodged an official complaint with the public prosecutor to investigate the allegations on Saturday.
“The NCW has followed the social media account on Instagram, which was launched by girls and women complaining that a man raped some of them and sexually assaulted and harassed others,” it said on Facebook.
It also said that several victims, who reached out to the council, recounted that the man “blackmailed and threatened to defame them using photos and clips documenting his heinous crimes.”
The council urged the women to submit official complaints to the prosecutor.
Some online reports suggested the perpetrator was a university student.
The American University in Cairo acknowledged the suspect had studied there but said he left the university in 2018.
He “is not a current student at the American University in Cairo,” a statement said.
Sexual harassment is highly prevalent in Egypt.
United Nations surveys have found that most Egyptian women have been subject to harassment, ranging from catcalling to pinching and groping.
Egyptian authorities have criminalized sexual harassment since 2014, but many women complain that the problem remains rampant.