Egypt's tourism revenues hit a record high of $13.6 billion in FY2022/2023. Spending less than 10% to increase the purpose of choosing this country as a destination sounds reasonable, but as long as the P&L balances, I don't see why not.

The problem is the rest of the balance sheet is pretty red. The government is spending $60B it does not have to build a new capital, and has already taken IMF lending. https://www.nytimes.com/2022/10/08/world/middleeast/egypt-ne...

Egypt’s debt to GDP ratio is falling and is lower than the USA.

https://www.statista.com/statistics/377984/national-debt-of-...

That's a pretty low bar, and more importantly, Egyptian debt is by and large not in Egyptian pounds, meaning they can't just print their way out of trouble.

The middle of the graph, the peak, is the current year.

It has not started falling yet, and it won’t particularly if they keep announcing new projects.

You need to worry about the rest of the spending. This project will bring many many times of its cost as profit over the years.

I think it is pretty safe to have doubts about Egyptian government profit projections. They also said the same thing about doubling the Suez canal but revenues did not meet projections and now they are planning to expand it again. https://www.middleeasteye.net/news/egypt-plans-expand-suez-c...

It won't if the rest of the country collapses from being overleveraged.

revenue is not profit

it is sort of for the government, most of it will end up being taxed one way or another, or at a minimum support people so the government doesn’t have to

Yes, Egypt has faced significant financial challenges. Recently, there have been substantial investments from the UAE, purchasing a city for $35 billion, with potential similar investments from Saudi Arabia. Despite these inflows, concerns about how these funds are managed, particularly regarding military influence, remain prevalent

> from the UAE, purchasing a city for $35 billion

Ras al-Hekma for those curious. It sounds like a terrible deal on all sides. It's a bad vehicle for UAE money, it leaves Egypt with "35% guaranteed profits" on a planned city, and the UN is busily green washing the entire affair to curry political favor.

> concerns about how these funds are managed

Egypt seems completely squeezed. It's uniquely impacted by both the war on Ukraine and Gaza with the IMF having to step in and give them $3 billion later upgraded to $8 billion in emergency relief. The money is going to evaporate. My concern is there won't be any local economy or businesses left under these policies when it all dries up.

> Ras al-Hekma for those curious. It sounds like a terrible deal on all sides

It actually makes sense.

Most tourism in Egypt comes from Eastern Europeans (especially Russians and Ukrainians), for whom Sharm al-Sheikh is their Cabo.

If you've looked at a map, it's also located in Sinai, where there's an ongoing Muslim Brotherhood turned IS insurgency (which also enflamed neighboring Gaza).

Moving resort tourism to much more defensible Ras al-Hekma works, and the UAE being the New York of the region had enough capital to co-invest to develop it (also didn't hurt to help line up politicians pockets).

And Egypt (with UAE, Saudi, and some Indian capital) has been building out alternatives like Siwa. I actually chatted a eco-lodge owner from Siwa while I was stuck at a layover in Istanbul Airport - a lot of their tourism it now targeting the domestic market, Gulf market, some western hippy types, and Indians.

> My concern is there won't be any local economy or businesses left under these policies when it all dries up

The Egyptian economy is stabilizing and UAE, Saudi, Chinese, and Indian money is flowing in as FDI [0], and pushing reforms accordingly.

Heck, Egypt's GDP Growth Rate in FY22 was 6.6% according to the World Bank, and has always been between 2.5-6% post-coup.

[0] - https://www.cfr.org/in-brief/can-egypts-economic-overhaul-st...

Ras el-Hekma is to the west of Alexandria, nowhere close to the Sinai.

They said Sharm al-Sheikh was in Sinai.

> where there's an ongoing Muslim Brotherhood turned IS insurgency (which also enflamed neighboring Gaza).

Is that Google AI search hallucinations? MB does not have anything to do with Sinai. There were insurgency fueled by several factors (some of them related to your normal normal Military Dictatorship)

> If you've looked at a map, it's also located in Sinai

I don't think you looked yourself in the map. It is located on the other side of Egypt. To the west of Alexandria.

> Moving resort tourism to much more defensible Ras al-Hekma works

More defensible? You really need to cross almost all of northern Egypt (practically invading it) to reach Ras- Elhekma from Sinai.

> And Egypt (with UAE, Saudi, and some Indian capital) has been building out alternatives like Siwa

I am not sure if by building out alternative you mean developing tourism destination because Siwa as a place where people live and flourish existed and was part of Egypt for thousands of years.

They commented Sharm al-Sheikh, not Ras el-Hekma, was in Sinai.

They commented that Ras el-Hekma is a more defensible location than Sharm al-Sheikh in general terms... which you seem to agree with based on your comment about needing to invade Northern Egypt to get to aras el-Hakem.

isn't 8 billion dollars like 4 miles of NYC subway? [0] in the grand scheme of bailouts and liquidity injections it doesn't sound all that critical to me.

[0] https://www.bloomberg.com/news/articles/2023-02-23/in-nyc-su...

Isn't the GDP of NYC alone 3x that of the entire country of Egypt? Yes.

The better question is what fraction of their GDP is this loan? Well, 1.6%. It's notable because while taking IMF loans has been a revolving door policy with Egypt this is the largest yet and the size was increased once already. It's being billed as an emergency loan because it is.

Egypts debt load has tripled over the past year or two and they're stuck at a 10% deficit that's slowly crippling the country.

I had some sense there would be a difference in GDP there, I appreciate the figure. I forget that deficits are different when you owe the money to someone other than yourself.

Yes. They have other boondoggles going as well, like a new alternative to Cairo: https://www.cnn.com/world/egypt-new-administrative-capital-s...

Inflation at almost 30% and lending rates around that as well. Taxes are being increased by more than 30% as well, mandated by the IMF for past borrowing.

Yes, likely because they overspend on things like 1B museums

It’s funny to me that people still think $1 billion is a lot of money for a government.

5 million people per year visit the MET in NYC, which is the 5th most popular museum in the world. Tickets are $30. Seven years of revenue is $1 billion.

Almost 15 million people visit the Pyramids of Giza per year. Egypt is the 9th most popular tourist destination in the world.

If only half of those people visit the new museum and spend $30 on admission that means they cross $1 billion in revenue in 5 years, and that assumes nobody buys a damn thing from the gift shop or donates to the endowment.

And the fomos who will visit Egypt just to see the new shiny thing.

They will be having them after this

I imagine the red sea shipping crisis and the new capital are probably a bigger part of the problem, but i cant imagine billion dollar museums are helping.

Egypt's one and only ever democratically elected president was overthrown by the current dictator, who is supported by the West. He doesn't have any incentive to fix any of Egypt's financial problems and is currently building a palace for himself away from the capitol with a gold throne

The "one and only ever democratically elected president" also had zero incentive to fix any of Egypt's financial problems and ... frankly ... was a terrorist candidate.

Sorry "islamist". Which is to say, he uses violence, massacres and even torture to achieve his political aspirations.

The first thing he did when elected was cancel elections, give himself unlimited power.

Ironically that was part of his downfall. Islamists believe there is only 1 islam. So did Morsi. And tried to ally Egypt to Iran. Tried to ally Egypt to the Syrian uprising (to ISIS, in other words). Islamic extremists in all these places, as it turns out, suddenly and violently disagreed with islam's "only one islam" fantasy, did not want to compromise and preferred to (physically) attack his government, with a few dozen dead as result. He lost control of that situation.

And then it turns out the Egyptian army, government did not like their president cooperating with islamists elsewhere, including Hamas, who were attacking and killing people left and right, with Morsi's support. Also he got terrorists inside Egypt, the "muslim brotherhood" to torture and kill his political opponents.

No offense, but Egypt, Egypt's people and the world dodged a SERIOUS bullet when this guy got deposed. A civil war would have been the minimum consequence of him remaining in power.

> he uses violence, massacres and even torture to achieve his political aspirations.

> The first thing he did when elected was cancel elections, give himself unlimited power.

Exactly like the current dictator of Egypt, El-Sisi the secularist, if you want to put things on that plane...

You act like Egypt dodged a bullet by having their own elected leader killed brutally in a violent coup. But the bullet was fired, and is still being fired on them as they're now led by a leader who is not beholden to them at all.

If Morsi was as terrible as you said and people hated him as much as you claim, he would have lost the next election. But there won't be a next election because the governments you didn't mention, who support the dictator, thought it would be better if Egypt never had another democracy so long as their political objectives are met.

I happen to believe in democracy, and I believe it is the best tool against terrible leaders. You may disagree, but don't try to paint your enemies as violent and irrational when you are the one who thinks force should be used to overturn the will of the people.