Thursday 27 January 2011

Guest post: will Tunisia’s politics spill over into Egypt’s economy? | beyondbrics - FT.com

While the impact of the political unrest in Tunisia on its economic performance in 2011 is likely to be relatively significant, the potential economic impact of Tunisian political contagion on the Egyptian economy is not – despite the fact that on a basic level a link is undeniable. Planeloads of returning tourists provided eyewitness accounts of the violence in Tunisia on most European news channels in early January.

When followed up with a day of protest in Cairo and other Egyptian cities on January 26, complete with the riot police firing canisters of tear gas on protestors, the idea that political unrest could potentially ruin a much longed-for summer vacation is clear.

Clearly, fewer tourists arriving in Egypt would affect growth and the current account in 2011. But the fall-off in arrivals is likely to be limited. Egyptian tourism marketing highlights the ‘Red Sea Riviera’ and the call of history, both of which seem a long way from the unrest in Tunis.

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