Egypt’s Minister of Planning and Economic Development Hala El-Said has showcased the country’s experience in handling the economic impacts of the novel coronavirus (COVID-19) pandemic.
The Egyptian government is keen to support the country’s tourism sector through the crisis by reducing the economic burden on various tourism facilities.
El-Said said that the government has taken proactive, flexible, and adaptable measures to cushion the pandemic’s impacts on different sectors, especially the tourism sector, as it is the most affected sector in the economy.
The minister’s remarks came during her participation in the discussion session entitled “Changing the Facade of Tourism and International Travel”, on Friday, which she attended on behalf of Egypt’s President Abdel Fattah Al-Sisi. The session, which was held via video conferencing, took place at the end of the third session of the Paris Peace Forum, which was held from 11-13 November
El-Said said that a dynamic tourism and travel sector represents the driving force for job creation and economic development, and that the contribution of tourism to global GDP was 10.4% in 2018. She also said that the sector is currently facing great challenges, with many countries imposing travel restrictions.
She also said that the tourism sector is strategic for Egypt due to its critical importance as a source of employment for millions of young people and as a reliable financial resource.
At the same time, however, it is a sector that is highly vulnerable to economic fluctuations and crises, being one of those sectors most likely to be affected by the repercussions of crises, and the last one in recovery.
El-Said added that the rapid spread of the coronavirus led to a major economic shutdown, which in turn caused the closure of companies and record job losses worldwide. She noted that in Egypt, the tourism sector employs 14% of the workforce, equivalent to 2 million direct jobs and 2 million indirect jobs.
In Egypt, tourism receipts for fiscal year (FY) 2019/20 were expected to grow by 27% to $16bn, compared to the previous year.
The spread of the coronavirus led to a 16.9% decline in average hotel occupancy rates during March 2020, with a decrease in the expected total revenues for the sector by 10 to 13% by the end of June 2020.
Regarding the state’s support measures, El-Said explained that precautionary measures and restrictions on hotel occupancy rates will increase the operating costs of companies. Thus, it requires a quick response so that the Egyptian government adopts a proactive and rapid strategy to mitigate the negative repercussions of the outbreak of the epidemic.
“About 412 measures have been put in place targeting the most vulnerable segments of the population, and include monetary and financial policies that focus mainly on the sustainability of economic activity and mitigating the effects of the coronavirus on the most affected sectors, especially tourism,” El-Said said.
The minister added that the government was keen to support the tourism sector to cope with the crisis by reducing the economic burdens on various tourism facilities and postponing the collection of licensing fees, other taxes, and sovereign fees.
She also referred to the Central Bank of Egypt (CBE) initiative, entitled the “Tourism Finance Initiative” that works like a credit facility to provide support to the continued function of hotels, and finances current operating costs.
El-Said added that with the suspension of international flights, the Egyptian government has sought to reduce the losses caused by the coronavirus. It has done so by encouraging domestic travel and tourism, while taking all precautionary measures following the health and safety standards of the World Health Organization (WHO).
She also pointed to the government’s establishment of a fund for “emergency subsidies for workers”, that supports regular employment in the tourism sector.
“To deal with this crisis effectively, it is necessary to prepare for an effective response to the outbreak of the disease, including operating electronic applications that track contacts with mapping,” El-Said said.
She stressed the need to move away from traditional tourism, towards new innovative ideas, and to emphasise the importance of digital transformation, innovation, and technology, given its integral role in shaping the new situation after the global crisis.
“Countries can organise 3D virtual visits and guided tours of archaeological sites, attractions, and museums through digital platforms, in addition to promoting tourist attractions at virtual events and exhibitions,” she said.
Over the past few years, Egypt has become a pioneer in hosting international conferences and youth forums in which heads of state and governments participate, in addition to young leaders from all over the world.
On the return of visitors and facing the negative repercussions on tourism, El-Said said that if the conditions relating to the coronavirus improve at the local and international levels, there will be a possibility for visitors to return to some countries, including Egypt.
The minister said that the government’s decision to resume international flights and reopen tourist sites and facilities was consistent with its broad strategy of maintaining a balance between preserving the health of citizens while supporting economic activity.
This has contributed to continued GDP growth, making Egypt one of the very few economies that have grown despite the crisis, according to the views of international institutions such as the International Monetary Fund (IMF), the World Bank, and others.
The minister noted the importance of relying on epidemiological maps and using them at the local level to guide decisions about resuming tourism and reopening sites and companies, in a way that will facilitate attracting tourists to areas that do not witness a pandemic.
She said that sustainability should be a guiding principle for building a stronger and more flexible tourism economy, and driving growth while providing great opportunities for the tourism sector.
She also emphasised that sustainable tourism is a key component of Egypt’s 2030 vision, as the vision recognises the importance of environmental and social aspects as basic topics in all development programmes. This is also a vital matter as the state seeks every effort to achieve sustainable and comprehensive growth.
El-Said added that planning for the future of sustainable tourism is consistent with promoting the principles of the circular economy and ensuring the sustainable use of resources. At the same time, it promotes green, environmentally friendly projects in the tourism sector and adhering to environmental laws for the sector.
In the same context, she explained that the Egyptian government recently ratified the Environmental Standards Manual for National Investment Projects’ commitment to green principles, with a basic pillar related to “diversification of tourism products and destinations”.
The minister noted the Egyptian government’s keenness to preserve the country’s biodiversity and natural resources while enhancing the national economy’s capabilities to attract more investments in the ecotourism sector and provide decent job opportunities.
El-Said concluded her speech by stating that cooperation and the exchange of global knowledge in science, information technology, and digital transformation are essential to face the challenges affecting the tourism sector and to achieve inclusive and sustainable growth.
“Coherence between tourism and sustainable development needs the consolidation of political will and the participation of various stakeholders, including governments, international financial institutions, companies, and civil society, which is what the Egyptian state is committed to achieving,” she noted.