Aug 30, 2019

Having conquered numerous industrial sectors of the Egyptian economy, the Egyptian Armed Forces increasingly has its sights set on Egypt's all-important tourism industry. President Abdel Fattah al-Sisi, by decree, recently transferred control of chunks of Red Sea real estate — including entire islands and towns — to the nation's military. With these transfers, Red Sea residents fear losing their livelihoods to the investment priorities of the military, an economic behemoth that will now control the development of the transferred properties, prime land in one of Egypt's leisure and tourism hotspots.

According to data collected by CEIC, a London-based economic consulting firm, Egypt's total tourism revenue for 2018 totaled some $12 billion. That is a 50% increase over 2017 revenue, which stood around $7 billion. In addition, the Central Bank of Egypt reported that tourism revenue was up 36.7%, to $5.4 billion, for the first half of this fiscal year compared to the same period for the last fiscal year. The most recent annual report by the Cabinet indicated that for 2018 the Ministry of Tourism itself collected $9.8 billion from entry fees to museums and monuments and peripheral sales and other ticketing.

On Aug. 5, Egyptian President Abdel Fattah al-Sisi issued presidential decree no. 380 (2019) to transfer control of 47 state-owned islands in the Red Sea to the Egyptian armed forces, declaring them “strategic lands of military importance.” The decree, of which Al-Monitor secured a copy, notes that the islands are tourist destinations, offering snorkeling and safaris. The day before, Sisi had issued another presidential decree, no. 378 (2019), transferring 16,000 feddans in Zafarana to the armed forces along with 45,000 and 14,000 feddans in Gamsha Bay, north of Hurghada. All the plots had previously been under the purview of civil ministries, including the Ministries of Tourism and the Environment, and are situated on the Red Sea. Earlier this month, Al-Monitor reported on a presidential decree issued in July transferring authority over the Port of el-Arish and surrounding residential areas in the capital of northern Sinai governorate to the armed forces.

Hurghada and el-Gouna are the most notable leisure and tourist destinations on the Red Sea, but it appears they will soon have competition. The military is currently working on El-Jalala, a megaproject in Ain Sukhna overlooking the Red Sea near the Suez Canal that is said to include the biggest tourist resort in Egypt. The fates of Gamsha Bay and Zafaran are all but set that they will be developed for the enjoyment of tourists in search of leisure.

The latest land transfers, a member of the tourism chamber of the Federation of Egyptian Chambers of Commerce said, “raise fears about the future of civilian-owned companies operating in this area.” “There are companies that have actually been affected by the National Service Products Organization [NSPO] joining other economic sectors,” he noted, speaking to Al-Monitor on condition of anonymity. “Now, it appears to be the tourism sector’s turn.”