The political crisis gripping Egypt has stoked renewed fears for the country’s faltering economy as investors and tourists run for cover.
United Kingdom tour operators have up to 25,000 UK citizens currently visiting Egypt.
At least 1,000 were in the volatile Luxor and Cairo areas, according to the travel association Abta.
It has told Sky News that companies have made arrangements to get those customers out of the country – with Thomson the latest to effectively evacuate guests as the coup to oust President Mohamed Morsi unfolded.
Abta said the vast majority of UK tourists were in the Red Sea resorts, such as Sharm el Sheikh, which were excluded from the latest Foreign Office guidance advising against travel to most areas of Egypt.
Anti-Mursi protesters chant as they celebrate near Tahrir square after the announcement of the removal from office of Egypt’s deposed President Mohamed Mursi Major gripes behind anti-Morsi protests were rising unemployment and prices
Holidaymakers booked to travel to the capital and other potential flashpoints can receive full refunds from operators or re-book.
While the instability in Egypt is said to have pegged holiday prices back, the country can not afford the tourism industry to take a greater hit from political turmoil because of the perilous state of its economy.
Tourism, which makes up more than 10 per cent of Egypt’s entire economic output, had already been hurt by the threat from terrorism in the wake of the 1997 Luxor massacre and subsequent bombings in Sharm el Sheikh in 2005, though Abta said UK tourist numbers in Egypt had been “resilient” – especially in the sea resorts since 2011.
But in a country of 80 million people, the fundamental problem has been Egypt’s inability to improve the prospects of ordinary citizens.
After all, its GDP growth was measured at an annual rate of more than five per cent in the first quarter of the year but the stark reality is that the proceeds are not reaching the workforce.
Half the working population are now said to be gripped by poverty on pay of less than $2 a day.
The economic machine – weakening at the time of President Hosni Mubarak’s toppling from power in 2011 – deteriorated further under the tenure of Morsi as he was forced to borrow to make up for rising costs and risk-averse international private investors.
Research by Barclays shows unemployment at 13.2 per cent after the first quarter of the year – growing from 8.9 per cent at the beginning of 2011.
Inflation was running at eight per cent in April while investment was down 10 per cent in
the first three months, with Egypt’s external debt rising almost 30 per cent to $45bn over just one year.
Negotiations on an International Monetary Fund loan have stalled and the protracted discussions meant Morsi was forced to take money instead from countries including Saudi Arabia and Qatar to help pay for subsidies on food and fuel and higher debt bills.
The cost of servicing its debts means Egypt’s cash reserves are bleeding – more than halving from $34bn before Mubarak’s demise to $16bn in May.
The IMF has urged Egypt to raise taxes and cut spending but they are measures an angry population – let alone a new government - can not afford.