Crisis and curfew in Egypt push business to the brink

Cairo’s inhabitants have abandoned the city’s cafes and restaurants because of a 7pm curfew

People gather on the street in Cairo. Photograph: Bryan Denton/The New York Times

People gather on the street in Cairo. Photograph: Bryan Denton/The New York Times

Fri, Aug 23, 2013, 01:01

Pizza Mia in the upscale neighbourhood of Zamalek has only two customers sitting in for lunch, both journalists, but dispatches a pile of boxed pizzas to families and firms nearby. “We have little business,” sighs the young man in charge. Due to the 7pm curfew, the tiny restaurant closes at six, so the staff can get home before Cairenes are meant to be off the streets. The 10-day curfew has compounded more than two years of economic pain.

Most people go out at night when the concrete and stone city cools and the breeze from the Nile winds through high rise canyons, drawing Egyptians out to cafes, river boats, and restaurants.


‘Staying in’
Jalal Abu-Gazaleh, an importer of gourmet foods, says, “The bulk of our businesses is hotels and restaurants. A customer who owns a chain of restaurants has no income so he cannot pay us. People normally go out in the evening here. Now they stay at home.”

Many businesses have a cash flow problem and cannot pay staff as well as suppliers.

“Our retail business is not doing too badly. Customers buy from our outlets and cook at home instead of going out.”

His partner Amgad Sultan adds, “People are respecting the curfew.” He recalls that a curfew imposed by ousted president Mohamed Morsi earlier in the year in Port Said after clashes was not only disregarded but challenged. “They played a football match that started when the curfew began.”

Insurance costs for both imports and exports are soaring as Egypt is now considered a “war zone”.

Their office closes down at 5pm so employees, who sit in ranks of computer cubbies, can get home in time.

Some foreign firms shut down operations last week but have reopened, on curfew schedule.

People without contracts are in great difficulty. While many have lost jobs because of the economic downturn, lay-offs have risen due to the curfew.


Curfew damaging
Over tea in a cafe attached to the nearly empty Hilton, British consultant Angus Blair says, “The curfew is very, very damaging. The whole service sector is being damaged . . . If the curfew goes on for long, the current 2 per cent growth rate could fall to 1.5 per cent.”

Lorries carrying food and other supplies into this vast city of 18-20 million people are given permits to make deliveries. However, the charitable enterprise that makes the croissants, bread and cakes for my boutique hotel delivers breakfast the afternoon before. Eight out of the hotel’s 28 rooms are occupied, a high rate these days in Egypt where tourist operators have stopped selling packages to Egypt.

In 2010, before the uprising against 30-year president Hosni Mubarak, Egypt received 14.7 million visitors, in 2011 the number fell to 9.5 million before rising to 11.2 million in 2012. Tourism normally accounts for 7 per cent of GDP.

Fruit and vegetable shops along July 26th Street in Zamalek are well stocked with mangoes, figs, cherries, oranges, and plums, grown in Egypt, as well as imported bananas and apples. Roving vendors sell arm-loads of roses while women display rounds of wholewheat bread on bamboo fruit crates. Here there is money to buy food but in Shubra, Boulaq, and the City of the Dead, people are on the brink of starvation. A charity visitor says she visits homes were children subsist on tea and bread.


Petrol consumption
Because of the curfew, Egypt has stocked up on fuel for vehicles and power plants. “There has been a 40 per cent reduction in petrol consumption,” states Fouad Mansour of managing editor of Ahram Online.

“This also saves foreign currency,” he says.

Some $12 billion (€9 billion) in aid from the Gulf is expected to see Egypt through this perilous period but staving off economic collapse does not amount to turning the economy around.

Saudi Arabia, the Emirates, and Kuwait are providing cash – of which $5 billion is already banked – while Qatar is shipping natural gas. Saudi Arabia has said more cash would be available if needed.

Egypt’s foreign reserves stood at $14.9 million at end of June and had been falling by $1-2 billion a month so Gulf money has averted national bankruptcy.