Egypt has an awful lot going for it if it can find itself. You see, it has available labor, a great strategic location for trade, and a real opportunity to see inflows of foreign capital to build it up. However, it obviously has its challenges now. The riots have hurt its standing, and caused investment money to re-consider. It’s tourism industry, which historically has been a solid inflow of money, will take a lot to heal now after all the protests, riots, and potential collapse of the government was played on international TV.
There was an interesting article on April, 4, 2010 in the Knowledge-AT-Wharton Online Business News titled “Is China Still Competitive for Global Manufacturers?” which explains how increasing labor costs there give opportunity for rise of other future emerging nation superstars. Yes, Egypt was on the list amongst others, but will it now be dropping off that list, I ask? You see, the Egyptian stock market took a hit, bond markets there, and economically speaking its lost significant ground in just a short time.
Indeed, tensions were high, and they still have challenges there, but things were looking up with lots of investment dollars flowing in. There have been several articles in the Wall Street Journal about China’s large investments into Egypt, many worth $100s of millions of dollars in setting up factories, infrastructure, etc.
Of course, with the huge demonstrations, protests, and riots, all bets are currently off, and as far as tourism goes, it’s just a disaster, as bad as a Hurricane hitting Miami, and even worse, because it’s going to take a while for tourist and traveler trust to return. Similarly, if you will recall the high-profile lobby bombings of major hotels there a few years back – people don’t forget that easy.
Luckily for Egypt those pyramids are a world-wonder and a compelling reason to visit and they’ll most likely be there for another 20,000-years for future travelers, but today Egypt has some work to do to restore global confidence. Meanwhile their ability to borrow will be tougher and the cost to insure against default will make it even more difficult from an ROI, risk and reward standpoint. The Egyptian airlines which have had decent expansion – will now probably have their worst quarter on record, which is bad timing with all the other factors currently.
Indeed, it is my hope that you will please consider all this and think on it. And maybe this is a good lesson for those who wish to disrupt civilization and society using the mass mob mentality of protests and demonstrations. Because in the end, everyone loses.