Violent clashes are over in Egypt, but economy is still hurting

The pyramids rose majestically into a cloudless blue sky, and the Sphinx appeared as beguiling as ever, but 35-year-old Mohammed Abdullah looked down from his camel in despair.

“Tourism here is zero now,” he said Thursday, waving his hand at empty parking lots, shuttered shops and restaurants, and riderless camels and horses that usually carry visitors. “I have no income.”

A victory march is scheduled Friday at Tahrir Square in Cairo to celebrate the end of the first week since mass protests forced longtime leader Hosni Mubarak to resign. But much of Egypt’s economy remains all but paralyzed from the monthlong political crisis, adding to the huge challenge the impoverished nation faces as it struggles to forge a democracy.

The Cairo stock market, which crashed at the start of the crisis, has been closed ever since. Food prices have risen in a country where 40% of the people live on less than $2 a day. Schools and universities remain closed. Banks have been shuttered for three weeks, forcing some factories to cut production or close. Most ATMs ran dry long ago.

“We have no cash,” said businessman Moaz Malek, who owns furniture, menswear and shoe stores. “We can’t pay people. We can’t do transfers abroad to our suppliers. And no one has the money to buy anything.”

Estimates vary, but economists say that the country has lost billions of dollars in revenue, production and capital outflow as a consequence of the political turmoil. Military officials currently running the government have slashed the official forecast for economic growth this year.

Washington has offered some help. On Thursday, Secretary of State Hillary Rodham Clinton announced that the Obama administration would allocate $150 million to “support the transition there and assist with their economic recovery.”

The challenge is immense. Labor unrest has disrupted key industries, including chemicals and cement, as unions have leveraged the general disorder to press their demands. Egypt’s ruling military council has urged strikers to go back to work, and even texted a plea to people’s cellphones, but few seemed to heed the call.

“The labor movement will not listen to the military,” said Essam Montasser, a prominent economist. “This is the only weapon people have to be heard.”

The latest turmoil hit the Suez Canal on Thursday when at least 1,500 canal workers marched for higher pay in three cities that flank the waterway. The protests did not affect the giant cargo ships and tankers that travel the strategic seaway between Europe and Asia.

Egypt’s largest exporter of textile and apparel, Arafa Holding, said it had reached a deal with striking workers over pay and work conditions, however, and would resume factory operations Saturday.

The tourism industry is the sector hit the hardest, and the crucial winter tourist season, when the weather is most temperate here, is slipping away.

Last year, about 14 million tourists, a record, spent more than $10 billion in desperately needed foreign exchange in Egypt. The industry provides more than 12% of all of Egypt’s jobs.

This year is starting as a calamity. Tourists fled the country or canceled planned holidays when the protests spread. Now, the usually packed Red Sea beach resort of Sharm el Sheik, far from Cairo on the Sinai Peninsula, appears a ghost town. The normally crowded temples and tombs of Luxor and Aswan look abandoned to the desert.

“Everything has stopped,” said Sami Adeel, a tour operator in Cairo, where dozens of army tanks and armored vehicles still guard some government buildings and intersections, and a midnight-to-6-a.m. curfew remains in effect. “Egypt is safe, but people are afraid to come.”

In Cairo, the Grand Hyatt and other five-star hotels that line the Nile are deserted, their marble lobbies desolate. The graceful falouka sailboats, huge floating restaurants, and other water craft that cater to tourists are tied to the quay, forsaken for now.

In Giza, just west of Cairo, Tumer Magdy has laid off all but three of his 25 employees at his family’s Pyramids Restaurant, a short walk from the ancient monuments. On Thursday, he said, no one had ordered a meal all day.

“Usually, this street was so crowded with tourists you couldn’t see the ground,” he said, pointing outside. A lone horse clopped down the empty street, echoing off the steel gates that shuttered nearly every carpet shop, perfume purveyor, cafe and souvenir shop.

The army sealed the complex around the pyramids after the protests began Jan. 25 and looters broke into several high-profile sites, including the Egyptian Museum off Tahrir Square.

The museum was still padlocked Thursday, but the pyramids were again open for business. Hundreds of tour guides, postcard sellers, horse-drawn carts, camel jockeys and others waited in vain for their first paying customers in weeks.

Most were despondent, saying they were living off savings or relatives, or had sold some of their animals. But Khalid Abdusalem, who hawks small statues and bags, cited a silver lining. He said that corrupt police, who usually demanded daily bribes, had not returned.

“That is one good thing,” he said cheerfully.

Several men acknowledged that they joined the so-called charge of the camel brigade Feb. 2, when about 50 riders on horses and camels raced through the throngs of anti-Mubarak protesters at Tahrir Square, provoking the crowd.

But camel driver Ali Abdul Hami, 37, said a local pro-Mubarak politician had convinced the group that he would kill a proposed scheme to build a tourist tram around the pyramids, which they opposed, if they rode to the square to complain that the protests were scaring off tourists.

“We wanted to keep our jobs, so we went,” he said. “We thought it would be peaceful. But then people in the crowd got scared of the camels, and they threw rocks at us. And we tried to escape, and we ran the wrong way. It was very bad.”

There were higher costs to the protests.

Egypt’s minister of health, Sameh Farid, said Thursday that at least 365 people died and 5,500 were injured in the recent clashes around the country. They are the first official tallies from the government and are in line with previous estimates from human rights groups.

One such group, the Arabic Network for Human Rights Information, said that as many as 500 protesters were still being detained by the army, and that 40 to 50 people remained missing.

Gamal Eid, executive director of the network, said the army was holding the protesters without charge and had not released their names. He said the military had not responded to repeated requests for information on the detainees.

“This is not an appropriate response as far as we’re concerned,” Eid said. “Even the army has to respect the law.”

Also Thursday, authorities arrested former Interior Minister Habib Adly and two other former ministers under investigation for corruption, the Associated Press reported.

bob.drogin@latimes.com

Times staff writer Raja Abdulrahim contributed to this report.