30 October 2019

 

Full Report

Predictions

  • End of UK flight ban to Sharm el-Sheikh will provide economic boost but austerity will continue to fuel popular socioeconomic discontent
  • Government suggestion that it will consider further IMF loan deal raises likelihood of more reforms, which will exacerbate economic pressure on citizens
  • Jihadists and Islamist militants will look to disrupt tourism to undermine economy, raising risk of attacks over coming months, particularly in Cairo

 

Analysis

The UK Government announced on 22 October the end of its suspension of commercial flights to the Red Sea resort of Sharm el-Sheikh, following improved security procedures at Sharm el-Sheikh airport and close co-operation with Egypt on aviation security. Three days later, Egypt’s Civil Aviation Ministry said that British airlines would resume flights to Sharm el-Sheikh in December.

The UK’s flight suspension had been in place since the downing of a Russian commercial aircraft in October 2015 that departed from Sharm el-Sheikh airport. Ansar Jerusalem (AJ), the Sinai-based affiliate of Islamic State (IS), claimed responsibility for the attack. Egypt responded by intensifying military operations in the Sinai, including killing AJ’s leader in September 2016, and significantly stepping up security in Sharm el-Sheikh, including at the airport and via the ongoing construction of a six-metre high concrete barrier around the resort. This prompted various states to reverse their own flight bans over recent years, and following the UK’s decision, Russia is the only European country that still imposes a restriction.

The UK’s move reflects genuine improvements in security at Sharm el-Sheikh. However, the timing of the decision is also likely in part politically motivated. Indeed, UK Prime Minister Boris Johnson likely hopes that the gesture will help strengthen commercial relations in future as London seeks to expand global trading opportunities post-Brexit. Cairo, for its part, has naturally supported the move. Although wider tourism has largely recovered from the negative impact of the targeting of the Russian jet in 2015 – with nearly 9 million tourists visiting in 2018, up from 5.4 million in 2016 – numbers travelling to Sharm el-Sheikh remain relatively low. The Government will therefore hope to see this trend reversed and an economic boost following the end of the UK’s flight ban. This will be particularly welcome given popular discontent with President al-Sisi’s rule, as highlighted by rare protests in September fuelled in part by anger over increased living costs due to IMF-mandated reforms.

The Government likely hopes that the resumption of flights in Egypt’s peak tourist season will have an immediate impact on visitor numbers. Regardless, the lifting of flight restrictions will improve wider perceptions of security in Egypt – particularly if Russia also announces a resumption of flights to Sharm el-Sheikh – likely helping increase tourist numbers over the long term. Al-Sisi will hope that associated economic benefits including employment opportunities will lessen popular discontent and limit the threat of further protests. However, ongoing austerity measures, which will only be extended further if the Government secures another IMF loan deal next year as indicated by the Finance Minister on 25 October, will continue to negatively impact citizens, sustaining the risk of popular unrest over the coming years.

Additionally, IS’s mainland Egyptian affiliate and AJ will both retain an intent to target tourist locations to try to undermine the economy and foment instability, and will likely be incentivised to carry out attacks following the recent death of IS’s leader in Syria. That said, a security forces crackdown has limited IS capabilities outside Sinai, and AJ remains confined to the peninsula’s North, particularly around al-Arish. The Movement of the Hands of Egypt (HASM), the militant youth wing of the Brotherhood, will however pose a greater threat than IS in mainland Egypt. HASM has shifted its targeting in the past year to include the tourism sector and has demonstrated an apparent intent to carry out major bomb attacks (see our 14 August Report). While the authorities will continue to foil most sophisticated plots, the threat of strikes, including shootings at tourist sites, will likely grow in coming months, particularly in Cairo and Giza.

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