The road to economic recovery may be hard but Egypt is making progress. Egyptian business activity shrank at a much slower rate in November 2013, suggesting that the economy may be improving, according to the seasonally adjusted HSBC Egypt Purchasing Managers Index (PMI).
Non-oil private sector rose to 49.5% points in October 2013, an increase from 44.7 points in September 2013 (readings above the 50 mark indicate an improvement in business conditions). This is the result of the bold steps taken by the Egyptian government to transform its economy.
It is undeniable, however, that most disruptions affected normal business operations. Banks and financial institutions in Egypt are thus increasingly looking at alternative ways of providing uninterrupted services to minimise service during disruption times.
With more banks and financial institutions investing in new technologies and providing online and mobile banking as advanced services to customers and as additional platforms of remote access in critical situations, receiving and making business payments in a timely fashion is now much easier even through trying times for the country.
On top of this, Saudi Arabia, Kuwait and the United Arab Emirates have pledged a total of $12 billion in loans, grants and fuel shipments. With aid from its Gulf allies, Egypt’s economy can climb out of crisis.
Internally, the Egyptian government is taking steps to repair the business environment and attract investments back to Egypt by improving security, removing logistical bottlenecks and investing in new projects, including developing roads and transport, support for the local industry and development of health services. These initiatives are likely to create jobs, raise living standards and hence reduce social tensions.
Egypt can also rely on many economic growth engines, including tourism, manufacturing, agriculture, industry and finance. Tourism is the most important source of revenue for the Egyptian economy, contributing to approximately 11.3% of the country’s GDP, accounting for approximately 45% of non-commodity exports and employing about 4 million people.
The lifeblood of Egypt’s economy, tourism is also recovering thanks to the new governmental strategies: the Egyptian Tourism Federation is working in partnership with the British Council and Edinburgh College’s Centre of Tourism and Hospitality to deliver expert training in sustainable and green tourism practices to the next generation of Egyptian tourism workers.
The minister of tourism, Hisham Zaazou, has also recently visited many countries in Europe, North America and Asia to convince them to lighten or lift travel warnings to Egypt. In addition, the tourism ministry is working with the Ministry of Civil Aviation to offer special discounts to draw tourists to the country.
In an effort to draw tourists from Arab countries, direct flights were being added between Egyptian tourist destinations and Riyadh, Jeddah, Kuwait City and Amman. The Ministry of Tourism is now also working with tour operators to provide attractive packages to Egypt, especially to the Red Sea region and South Sinai.
As an extra incentive, the cost of domestic flights was recently discounted by 50% during a three-week promotion, provided those who bought the tickets also purchased a tourist package.
Although the country has surely seen more serene times, these efforts by the Egyptian government, its people and allies will help restore confidence in the Egyptian market and drive economic growth in the long term.