INSTRUMENTO 4 - MODELO DE COTIZACIÓN PARA SALON, EQUIPOS Y ALIMENTACIÓN)

3-1 Introduction

An abundance of major historical sites and a rich cultural heritage have made Egypt a unique tourism destination. The prominence of the tourism industry has had such an impact on the overall national economy that it has been regarded by many observers as the economic lifeblood of the country. The crucial significance of the tourism industry has not been overlooked by Egyptian political dissenters. Although hitherto unsuccessful, they have at times attempted to further their political ends by carrying out terrorist attacks on this vulnerable industry.

This chapter attempts to offer some general insights into the dimensions of Egyptian national culture, the tourism industry in present-day Egypt and the effects on it of terrorist incidents. It begins with a brief overview of the geographical, economic and political context, proceeding with a review of Egyptian national culture as perceived by Hofstede (1980; 1983; 1984) and others, as set out in Chapter 2 (section 2-6). It then discusses the changing fortunes of the tourism industry in the past three decades. The analysis is largely based upon official data provided by Egypt’s Central Agency for Public Mobilization and Statistics (CAPMAS) and the annual analysis of the Economist Intelligence Unit (EIU). On occasions, complementary aggregated data have been adapted from other sources, such as the Business Source Premier and Regional Surveys of the World, the Middle East and North Africa (2008). The analysis is split into three periods, comparing international tourist arrivals and receipts. These results are then represented in a graph tracing the trends over the past three decades. The next section deals with the main tourism stakeholders in Egypt and the final section discusses the emergence, evolution and challenges of terrorist groups in Egypt and their attacks on tourism

104

destinations. It then reviews counterterrorism strategies, which have oscillated between

‘carrot’ and ‘stick’, assessing the degree to which each has been successful.

3-2 Egypt

The Arab Republic of Egypt is located in the north-east of the African continent and on the Sinai Peninsula. It has land borders with Sudan in the south, with Libya in the west and with Israel and Palestine in the east. Its shorelines extend along the Mediterranean Sea to the north and the Red Sea and the Gulf of Aqaba to the east. Since most of the country is desert, the population is distributed very unevenly, being concentrated in Cairo and Alexandria and around the River Nile and the Suez Canal. These areas are among the world’s most densely populated regions (Ellicott, 2008). Egypt’s geographical situation, the distribution of its population and especially the total reliance on the Nile for irrigation have resulted in a strongly centralised administration and allowed the government to extend its authority to the peripheries (Goldschmidt, 1988).

In 2008, the total population of Egypt was 81,713,520, making it one of the most populous countries in the region. A large proportion of the population is young: half of Egyptians are under twenty years of age and two-thirds are under thirty, a demographic imbalance that severely strains the economy (CAPMAS, 2008). Egypt’s government is hardly able to meet the demands for food, shelter, education and jobs. Around three million Egyptians have migrated to other Arab countries, particularly the oil-rich states, in search of work. Their remittances to their families constitute a major source of national income (Conrad, 2005).

Much like elsewhere in the world, the economy has come to play a crucial role in Egyptians’

lives. The long history of colonial exploitation and the enduring legacy of authoritarian rulers forestalled the industrial development of Egypt in the nineteenth century. At the turn of the twentieth century, industrialization began to take root, with rapid growth in the textile

105

industry, which was comparatively satisfactory before the socialist government of Abdel Nasser (1956-1970) took power (Al-Awa, 2006). Nasser’s sixteen-year rule was characterized by the militarization of politics and the concentration of power through the supremacy of the executive branch. Under Nasser, the state took control of the economy to ensure equitable development, a policy known later as Arab Socialism. Nasser was a charismatic leader and earned a reputation as a champion of Arab interests, but his economic policies brought the country to the verge of bankruptcy (Fahmy, 2002a). His death in 1970 was followed by profound political and economic changes in Egypt. By initiating the economic policy of enfetah (openness) or liberalization of the economy, his successor, Anwar El Sadat, began a series of fundamental reforms of the economy. In addition, Sadat’s regional foreign policy, including a peace initiative and rapprochement with Israel, enhanced the international image of Egypt (Al-Awa, 2006). From 1981 to 2011, under President Hosni Mubarak, Egypt followed the same route and strove for the same goals; however, Ellicott (2008) argued towards the end of this period that there was a long way to go, as the country was still grappling with chronic problems emanating from within and from abroad.

3-3 Egyptian national culture

In Egypt, loyalty to one’s group takes precedence over the individual’s interpretation of the requirements of his or her job. Among Arabs, a friend is someone whose company is enjoyed.

However, equally important to the relationship is the duty of a friend to give help and perform favours to the best of his or her ability (Nydell, 1987). The position of friendship as a cornerstone of Egyptian culture has a major effect on selection and promotion practices. Not surprisingly, nepotism is common in many Egyptian organisations and saving face is of utmost importance in the national culture. Egyptians hate to say no, a phenomenon which may appear to westerners as dishonest and lacking in integrity, but is instead the result of a strong desire to preserve harmony. It is no surprise that Hofstede (1980; 1983; 1984)

106

classifies Arab societies such as Egypt as collectivist in nature, noting that workers from collectivist cultures tend to be more involved and identified with their workplaces. In contrast to individualism, collectivism requires the members of a group to work together for survival.

As an Arab nation, Egypt has a culture characterized by high power distance (Hofstede, 1984), as explained in Chapter 2 (section 2-6-2-1), one characterised by the acceptance of a superior’s opinion simply because it emanates from one’s superior. In a high power distance culture, superior and subordinate consider each other as unequal: indigenous organisations centralise power more and subordinates are expected to be told what to do (Hofstede, 1984).

Order—a phenomenon critical to Egyptian organisational practice—is preserved more by autocratic decision making than by establishing and following rules and regulations. In high power index countries like Egypt, employees are frequently afraid to disagree with superiors, who are often seen as autocratic or paternalistic.

The Arab cultural cluster also scores highly on Hofstede’s (1984) uncertainty avoidance index (section 2-6-2-2). One of the factors that might have lowered the Arab region’s collective score is its affiliation with the fatalistic tendencies inherent in the form of Islam prevalent in Egypt. Muslims generally do not question events and are more likely to accept the uncertainties of life. Nonetheless, the relative immobility of the Egyptian people because of their dependence on the Nile may have reduced their tolerance for uncertainty and change as compared to many other Arab countries where nature is harsher. Such is likely to be the case in the Gulf region, where physical movement in search of work and food has historically been a more critical issue.

It should be noted that when Hofstede conducted his original cultural research, Egypt was combined with other nations (Saudi Arabia, Lebanon, Iraq, Kuwait, Libya and the United Arab Emirates) in a category which he called “Arab speaking countries”. While there may be

107

some similarities among these countries, these are not sufficiently strong or comprehensive to justify combining them uncritically in this way, give the loss of information that this entail regarding the differences in culture between them. To elucidate some of the unique cultural characteristics of Egypt, Hatem and Hearn (2003), in a comparative study of American and Egyptian culture, identify as many as sixteen cultural dimensions which can be used to explain the national culture of Egypt, including three of those proposed by Hofstede. The full list of sixteen is: individualism, communication and language, dress and appearance, food and feeding habits, time and time consciousness, work habits and practices, relationships, values and norms, environment, beliefs and attitudes, action, power distance, competitiveness, structure, thinking, religion and humour. The use of these dimension places Egypt within a national cultural taxonomy in an almost opposite position to that of the countries chosen for Hofstede’s original study in three of the four cultural dimensions of the Hofstede framework (power distance, individualism and uncertainty avoidance). This means that any effect of the national culture of Egypt should be examined closely in its own right, because of the major differences in cultural dimension scores of these countries compared to Egypt.

3-4 The recent development of tourism in Egypt

Between 1982 and 1990, the number of international tourist arrivals in Egypt rose from 1,423,251 to 2,600,117, an increase of 182 percent. Given that international tourists are the most significant source of tourism revenue in Egypt, the revenue from international tourism had reached about 2.5 billion US dollars by 1990, making it one of the most lucrative sectors of the Egyptian economy (Table 3.1) (SIS, 2009). Such great progress was in part because of the Egyptian government’s economic initiatives of liberalization, as indicated in section 3-2 (Al-Awa, 2006; Wahab, 1996, in Pizam and Mansfeld, 1996: 175-186). However, the tourism industry proved to be one of those most susceptible to instability in the region. The triggering

108

of terrorist activity in the Middle East after the mid-1980s and the growth of anti-American sentiment in the region, intensified by the US air strikes on targets in Libya in 1986, resulted in a reduction in the number of tourists, particularly US citizens, travelling to these areas. For instance, by the end of 1986, American visitors recorded a 50% decline in bookings to Mediterranean countries and a 65% reduction to Egypt (Sonmez 1998: 427).

Table 3.1: International tourism arrivals and receipts in Egypt, 1982 to 1990

1982 1983 1984 1985 1986 1987 1988 1989 1990

International Arrivals 1,423,251 1,497,932 1,560,932 1,518,426 1,311,250 1,794,953 1,969,493 2,503,980 2,600,117 Receipts (x 1000 US dollars) 304,100 288,840 409,600 315,300 379,600 885,900 900,600 1,071,800 2,502,200

Source: CAPMAS

The 1990s began with a dramatic sequence of events: the Iraqi invasion of Kuwait in August 1990, followed by the dispatching of international troops to the region. Not surprisingly, the tourism industry in Egypt was affected considerably by the consequences of this event (Conrad, 2005). In February 1991, international tourist arrivals in Egypt fell to 57,000, compared with 208,000 in February 1990. Following the end of the Gulf conflict, however, tourist numbers recovered quickly, reaching 2,214,277 on average (Table 3.2). Interestingly, in 1991, despite considerable falls in international tourist numbers, the corresponding revenue did not fall but actually increased slightly, largely because of the unprecedented growth of luxury hotels in Egypt as a result of the opening of the sector to private investment, after decades of tight public control. As Vignal (2010) reports, since the 1990s the number of 4 and 5-star hotels as a proportion of the total number of hotels has risen significantly, from 11% and 15% respectively to 16% and 21% in 2008. She argues that the effects of investing in the hotel industry became evident in the early 1990s, more particularly in 1992, when the Egyptian tourism industry witnessed a record figure of more than 3 million arrivals.

109

However this flourishing of the tourism industry was short-lived, as it crashed again when tourism destinations were targeted by Islamist terrorists (Al-Awa, 2006). The number of international tourists visiting Egypt fell by about 22% in 1993, while revenue fell by 38%

(Table 3.2). Having failed to eradicate the problem of terrorism through its campaign against militant Islamists, the government allocated 25 million US dollars to a venture to promote tourism in 1994, with the aim of restoring revenue from this sector to its 1992 level (Wahab, 1996 in Pizam and Mansfeld, 1996: 175-186).Notwithstanding this initiative, the number of international visitors in the first three months of 1994 was 15% lower than the 1993 level. In January 1993, the World Bank had approved a loan of 130 million US dollars for the development of new tourism infrastructure, within the framework of a programme valued at some 805 billion US dollars (EIU, 2004). Recognizing tourism as one of the cornerstones of the national economy, a comprehensive plan was prepared for the fiscal year 1994/1995 to enhance the efforts in three main aspects of tourism: development, promotion and public awareness (El Beltagui, 1995). The Ministry of Tourism was among the pioneers of a policy of privatization. In addition, an overall national tourism development strategy drawing on marketing techniques was adopted. This strategy laid out the priority zones and determined the detailed rules for investors while taking into account a sustainable development strategy by protecting the natural and cultural resources (SIS, 2009).

The Ministry of Tourism also undertook practical measures in the promotion of the tourist industry through an ambitious plan, one important element of which was to strengthen Egypt’s international image as a conventional tourist destination. Furthermore, it attempted to raise public awareness of the significance of tourism through the mass media. Ten public information films were produced in 1993-1994 and repeatedly shown on the main Egyptian TV channels. An agreement was also made between the Ministry of Tourism and the Ministry of Education to incorporate tourism issues in the curricula of primary and secondary

110

schools (El Beltagui, 1995). By mid-1995 several developmental plans with the aim of enhancing tourism infrastructure had been implemented in Abu Soma and the Red Sea coast at Sahl Hashish. According to a Tourism Development Authority report, during these years some 27 new projects were also undertaken on the south Sinai coast (EIU, 1998). The consequences of such measures were obvious: in 1995, international tourist arrivals increased by 25% over the previous year, reaching 3.13 million, a pattern repeated in the following year, with some 3.9 million tourist arrivals and an estimated revenue of 3.7 billion US dollars (Table 3.2).

Table 3.2: International tourism arrivals and receipts in Egypt, 1990 – 1997

Source: CAPMAS

The strong recovery of the tourism industry was halted by yet another dramatic setback in late 1997. Constant fears for the safety and security of travellers followed a terrorist attack on a German tour bus in Cairo in September of that year, in which nine German tourists and one Egyptian lost their lives. These fears were aggravated the following month by the massacre of 58 tourists and 12 Egyptians in Luxor (Essner, 2003: 9; Wheatley and McCauley, 2008).

Many tourist agencies cancelled trips and many potential tourists from across the world withdrew their plans to travel to these destinations. For its part, the government took immediate and extensive measures, including attempts to compensate for the loss of external tourism by boosting internal tourism in the region (SIS, 2009; Conrad, 2005). Egypt Air, which had lost many foreign tourists, offered half-price tickets for domestic tourists. Key among the recovery measures taken in these years were numerous discounts on a range of goods and services to encourage potential travellers to return to the region. The official

1990 1991 1992 1993 1994 1995 1996 1997

International arrivals 2,600,117 2,214,277 3,206,940 250,776,2 2,581,988 3,133,461 3,895,942 3,900,000 Receipts (x 1000 US dollars) 2,502,000 2,529,000 2,375,000 1,779,300 2,298,900 3,009,100 3,700,000 3,700,000

111

statistics estimate that a cost of 1.2 billion US dollars resulted from the decrease of tourist numbers from 3.9 to 3.7 million and from other expenses (CAPMAS, 2008).

In 1999, the tourism industry underwent a significant recovery and the former construction plans for the industry were accelerated. The statistics for that year confirm that around 4.8 million tourists visited Egypt and brought in revenue of about 3.9 billion US dollars (CAPMAS, 2008). Investment in the industry in the following years was unprecedented. For instance, the value of a single contract for development of luxury accommodation in Port Ghaleb on the Red Sea was around two billion US dollars. Such investments proved to be effective, as tourist arrivals increased to 5.5 million in 2000, bringing in an income of almost four and a half billion US dollars (EIU, 2000).

No sooner had this recovery begun, however, than the sector was plunged once again into decline by regional and international crises, namely the renewed conflict between Palestinians and Israelis marked by the second intifada of September 2000 and the attacks on the USA in September 2001. A number of projects were put on hold and many travellers cancelled their flights as a result. By November 2001, international tourist numbers had fallen by 54.5% compared with the same month the previous year. Thereafter, international tourist arrivals began to rise steadily again, so that by August 2002 arrivals were a remarkable 15%

up on the previous year. However, revenues were taking longer to return to pre-September 11^th levels, as a result of increased discounting (Table 3.3). Once again, the government took recovery measures in 2002 to make up for the heavy losses of international tourist revenues.

Due to the global value of the Egyptian heritage, prestigious international organizations showed a willingness to invest in the tourism industry in Egypt. A prime example is UNESCO, which supported a 350 million dollar project to reconstruct the Great Egyptian Museum near the Pyramids at Giza. The second Gulf War in 2003 affected the tourism industry in Egypt to some extent. In the same year, Egypt was host to an international

112

conference on the promotion of sustainable tourism, which contributed immensely by offering a positive image of the Egyptian tourism industry (SIS, 2009). In 2004, tourist income reached 6.1 billion US dollars, which was the most important current-account credit in the economic history of the country. International tourist arrivals increased by 35% in 2004 to 8.1 billion, a second successive record (EIU, 2004).

The Egyptian government has since maintained support for the industry by targeting the markets in European and Arab countries and removing the existing barriers to foreign investment (Al-Ahram, 2007). Two successful measures taken by the government were to sponsor the travel of tourism journalists and to allow German and Italian visitors to use identity cards rather than passports. Among the most important government measures have been its investments in human resources, such as the signing of a contract with Cornell University to offer training courses for Egyptians in the hospitality and tourism industry.

Similar educational contracts have also been signed with countries having long experience in the tourism industry, such as Greece and France. In addition, a five-year campaign with the aim of raising the awareness of the public was undertaken in April 2006. Within these programmes, Egyptians are given training in the significance of the tourism industry in the national life and how to communicate in a hospitable manner. Such training has been incorporated into the primary school curriculum. The campaign also makes full use of televised and printed media (Conrad, 2005). Another campaign has been undertaken to enhance tourism at international level, with the hiring of the UK-based DDB International.

Marwa Fayed, senior account manager, notes, “The campaign borrows some of the same concepts used by Malaysia and India ... We are trying to make Egypt into a brand” (cited by Meed, 2007).

113

Finally, according to recent statistics, in 2006 tourism revenue reached 7.6 billion dollars, Egypt’s largest source of export earnings. International tourist arrivals rose by 5 percent to 9.1 million, a third successive record (EIU, 2008).

Table 3.3: International tourism arrivals and receipts in Egypt, 1998 – 2006

Source: CAPMAS

Figure 3.1 shows graphically the data presented in Tables 3.1, 3.2 and 3.3, indicating the way in which steady overall growth in international tourist arrivals and revenues has been punctuated temporarily. Yet, as the overall trend shows, terrorism attacks in Egypt have not halted the long-term growth of tourism in the country. The destinations targeted by terrorist

Figure 3.1 shows graphically the data presented in Tables 3.1, 3.2 and 3.3, indicating the way in which steady overall growth in international tourist arrivals and revenues has been punctuated temporarily. Yet, as the overall trend shows, terrorism attacks in Egypt have not halted the long-term growth of tourism in the country. The destinations targeted by terrorist