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Report: Egypt tourism revenues drop nearly 30 percent in 2011 amid political unrest
CAIRO (AP) ' Revenues from Egypt's vital tourism sector plunged almost 30 percent last year, dragged down by the unrest following the ouster of former President Hosni Mubarak, the government said Thursday.
The shortfall has forced the country to turn to the International Monetary Fund to bridge a burgeoning budget deficit.
The decline in revenues caused by near-daily protests and strikes underscores the challenges as its military rulers and the interim government plot a course toward handing over power to an elected civilian administration.
Tourism Minister Mounir Abdel-Nour said that the number of tourists who came to Egypt in 2011 dropped by over 33 percent to 9.8 million, compared to 14.7 million in 2010. Revenues for the year amounted to $8.8 billion, compared to $12.5 billion in 2010.
The decline in revenues has led the country to turn again to the IMF after rejecting an earlier loan offer. Earlier in the week, an IMF delegation visited the country, and a formal request for a $3.2 billion support package was issued.
While many Egyptians were concerned that the potential loan would come with conditions imposing austerity measures, such as cutting subsidies on fuel and food, the IMF looked to allay those concerns by saying it wanted any Egyptian economic program being devised to have widespread public backing.
"The program developed by the Egyptian authorities and its key policies are currently being discussed with emerging political parties to ensure broad political support," Masood Ahmed, the IMF's director for the Middle East and Central Asia, said in a statement.
"This should help reduce uncertainty and boost confidence in the program's successful implementation."
Analysts, however, are skeptical that the IMF funds will be enough to cover Egypt's needs for 2012.
The country "will need at least double that amount to avoid a balance of payments crisis," said London-based Capital Economics in a recent research note. It estimated that Egypt will need roughly $11 billion in external financing in the coming year.
Capital Economics said that one potential sticking point could be that the IMF has indicated that any support package should be included as part of broader support from other donors ' meaning that it was not guaranteed that Egypt would be granted the loan.
Egyptian officials have complained for months that they have received little of the billions of dollars pledged in aid by donor nations last year as part of an effort to support the nascent democracies born of the Arab Spring uprising.
Ahmed said that the IMF mission also met with representatives of the Freedom and Justice party, the political wing of the once-banned Muslim Brotherhood. The party secured just under 50 percent of the vote in recent parliamentary elections, making them the single strongest voice in the incoming legislature.
Their strength has stoked worries that they could guide the country down an Islamist path, away from the Western-leaning platforms that provided investors with some semblance of reassurance under Mubarak's regime.
The Brotherhood has sought to allay those concerns. Mohammed Gouda, an economic expert with the FJP, was quoted Wednesday by the independent daily Al-Masry Al-Youm as saying that the party's economic plan to revive the Egyptian economy is tied to a respect for economic freedom and to creating a state that supports competition.