Until two months ago, very few in Egypt remembered the drinks from Spiro Spathis, a local company founded in 1920 by a Greek immigrant of the same name that claims to be the first soft drink, initially manufactured and marketed in the country from a factory on a popular street in central Cairo.
In recent weeks, however, the company says it is experiencing a kind of carom renaissance. A popular initiative to boycott products and brands that are in any way associated with Israel, launched in response to Israel's military offensive against Gaza, is in turn benefiting some national brands such as Spiro Spathis. The boycott campaign, whose impact is difficult to determine, has left other unusual images on social networks and local media: abandoned restaurants of chains such as McDonald's and Starbucks, calls not to consume Coca-Cola or Pepsi, and students at an elite Cairo university sabotaged the insurance company Axa during a job fair.
In a country where demonstrations are virtually banned, some have found a way to protest in boycotting companies with ties to Israel, as has happened in other countries such as Jordan, Kuwait and Morocco, albeit on very different scales. “When the idea of boycotting came up, with a few products like Pepsi and Coca-Cola, I started with all of them,” says Arwa, a young teacher from Cairo who preferred that only her first name be published. “Now I am more careful about what I buy and I think I have reduced my purchases and check more whether they are Egyptian products,” he adds. “The boycott is the least we can do for the brave Palestinian people,” he slips.
However, some believe that the boycott, however limited, could represent an additional obstacle at a time when Egypt is suffering from a crisis that has weakened the purchasing power of the majority of Egyptians and hit the sales of many companies. In this context, last November the Federation of Egyptian Chambers of Commerce (FEDCOC) called for the campaign to be suspended on the grounds that the companies targeted were franchises with Egyptian workers and paid their taxes in Egypt.
One blow after another
For the Arab country, the Israeli offensive on Gaza came as it was still trying to cope with the harsh setback caused by the economic turmoil caused by the pandemic and the Russian invasion of Ukraine, undermining the fragility of its economy and The unsustainable growth demonstrated the model that Cairo has followed in recent years. This was based on the accumulation of debt and heavy investments in large infrastructure projects with uncertain returns, while neglecting a large trade deficit that sought to be covered primarily by remittances, tourism revenues and volatile speculative capital; a formula that is very susceptible to external setbacks.
Despite being neighboring countries and having diplomatic relations for more than 40 years, in 2022 Israel accounted for less than 0.5% of Egypt's exports and only 1.5% of its imports, especially fuel, according to calculations by the UN Comtrade center. Database.
Still, the start of the offensive in Gaza sparked concern as it threatened to affect two of Egypt's most important assets: natural gas exports and tourism. But not only have the most catastrophic predictions not come true, but for now Cairo is able to deftly weather the storm while trying to take advantage of the opportunity to get more help from abroad. “So far the impact [económico] “The impact of the war in Egypt is minimal,” notes Alia Al Mahdi, former dean of the Faculty of Economics and Politics at Cairo University. “Apart from tourism, nothing has changed in terms of economic performance,” he adds.
In the financial year
In 2022-2023, natural gas was Egypt's main export, thanks to Israeli gas imports, which Cairo re-exports. When the Gaza crisis erupted, Israel halted production at its second-largest gas field and halted exports to Egypt via one of the two gas pipelines connecting them, reducing gas flows to almost zero. However, activities resumed in early November and the amount of Israeli gas has returned to levels similar to pre-war levels. “Egypt exported two shipments [de gas natural licuado] since November 21st But can you sustain it? I don’t think so,” said Peter Stevenson, an Eastern Mediterranean expert at the Middle East Economic Survey, a publication specializing in the energy sector. “This is primarily due to the decline in production in the Zohr gas field. I think the trend will broadly be down year over year.”
In the case of tourism, organizations such as the IMF predicted that the war in Gaza could deter potential visitors to neighboring countries. However, the Egyptian government assures that the impact on hotel reservations was less than 10% and that the number of tourists in October and November was higher than in the same period last year. “The only lightly affected areas are those in Sinai, such as Taba, Dahab, Nuweiba and Sharm El Sheikh. However, they represent less than 20% of total tourist reservations [del país], and most of them are not cancellations, but postponements,” said Moataz Sedky, co-chair of the Egyptian American Chamber of Commerce Travel Committee. Some of these cities are particularly popular tourist destinations for Israelis.
In recent weeks, Egypt has had to cope with another setback caused by the Gaza crisis: the disruption of shipping in the Red Sea due to attacks on merchant ships by Yemen's Houthi movement and the resulting decline in traffic through the Suez Canal an important source of income for Cairo.
According to naval monitoring platform Project44, the number of ships passing through the area has fallen by up to 40%. But in recent days several shipping giants, including Maersk and CMA, have announced their intention to resume traffic after the US announced a major military deployment, so the impact on Egypt's public arms remains to be seen.
At the same time, the crisis in Gaza and the specter of possible contagion in Egypt, which could exacerbate its critical economic situation and generate instability, have led its key international allies to show signs that they are ready to abandon the restraint they have maintained in the EU expressed last year. To save Cairo again without conditions. Now Gulf states appear more inclined to support Egypt in the form of new central bank deposits, currency support and new investments, as the IMF considers topping up a $3 billion loan signed in 2022.
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