CAIRO: Egypt's popular revolt has opened up new political perspectives for the biggest country in the Middle East but dealt the economy a serious blow, scaring off tourists and foreign investors alike. "The crisis is costing the economy at least $310 million (227 million euros) daily," since it broke out on Jan. 25, said a report from Credit Agricole, lowering a growth forecast for 2011 from 5.3 percent to 3.7 percent. Egypt, the Arab world's most populous nation with 80 million people, was already struggling pre-revolt with major socio-economic challenges, including high unemployment and inflation. But the government has undertaken a vast economic reform and liberalization program, with its public debt under control and growth bolstered by direct foreign investment and oil and gas exports. Nevertheless, around 40 percent of the country still lives around or under the poverty line of $2 a day, and ongoing demonstrations against President Hosni Mubarak risk further weakening the economy. Banks and businesses mostly shut down for 10 days, leading to a six-percent drop in exports in January, the industry ministry said. The Cairo stock exchange is to reopen Sunday more than two weeks after it closed after two frantic trading days saw losses of 70 billion Egyptian pounds, or $12 billion. Chaos, fear and attacks on foreigners in Cairo and Alexandria led tens of thousands of holidaymakers to flee Egypt, where tourism accounts for six percent of gross domestic product, at the height of the holiday season. "Prolonged political uncertainty and perceived violence could have a destructive impact on tourism earnings this year," said Credit Agricole in its report on Egypt. The sector brought in $13 billion in 2010, with a record 15 million tourists. "Losing the winter season could mean more significant repercussions, especially if coupled with a possible summer downturn as customers, planning and booking trips now, are put off by news coverage," said World Travel and Tourism Council spokesman Elliott Frisby. "Despite this, there is much to remain positive about. While part of Egyptian tourism may be on its knees right now, many key tourist destinations are isolated and away from the cities where incidents have taken place." Investors in Egypt, highly dependent on foreign earnings, will also be worried about the Mubarak regime's almost total cutting off of Internet access over a period of five days. The cut, described as unprecedented by Internet experts, cost the country $90 million, said the Organization for Economic Cooperation and Development, and will have scared off many people considering jobs in Egypt. Some big companies suspended their activities, including Danish oil and marine giant A.P. Moeller-Maersk, Italian cement maker Italcementi, and Japanese carmaker Nissan. Companies such as France Telecom, Russian oil giant Lukoil, gas producer Novatek and German energy group RWE have evacuated some or all of their staff. "It's not easy to gain back investors' trust," said Rashad Abdou, professor of Economics at Cairo University. "As for new investors, they'll think twice before they come to invest." The wider world would have major cause to worry if there was any risk of the closure of the Suez Canal, from which Egypt earned $4.7 billion in the fiscal year ending June 2009. Fears of such a closure, which would also have a major impact on the world economy, caused the price of Brent oil last week to jump above the key $100-mark for the first time in more than two years. But the Canal's closure has been ruled out for the time being, said Karine Berger of credit insurer Euler Hermes. She said the Egyptian economy has a good chance of getting back on its feet. "There will be real instability for six to 12 months, foreign capital will leave, it will be necessary to rebuild credibility with commercial partners, and that will take time," she said. "But if Egypt rebuilds political stability more or less quickly its economy will follow," said Berger. "Oil and the Suez Canal are structural trump cards that will remain, unless the government turns out to be suicidal." The farmers in Assiut voiced their support for the Tahrir movement, witnesses said, as did the Port Said protesters, who set up a tent camp in the city's main Martyrs Square similar to the Cairo camp. In Cairo, hundreds of state electricity workers stood in front of the South Cairo Electricity company, demanding the ouster of its director. Public transport workers at five of the city's roughly 17 transport hubs also called strikes, demanding Mubarak's overthrow, and vowed that buses would be halted Thursday.
