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As Islamic Militants Beat A Retreat...The March Of Tourists Is Growing (Int'l Edition)


Business Week International Spotlight on Egypt

AS ISLAMIC MILITANTS BEAT A RETREAT...THE MARCH OF TOURISTS IS GROWING (int'l edition)

With the trial of Sheik Omar Abdul Rahman and others accused of conspiring to bomb New York's World Trade Center in full swing, Rahman's militant Muslim followers in Egypt are facing trials of their own.

In recent months, the government's security forces have cracked and weakened the Islamic Group, the leading extremist organization in Egypt, driving its members from Cairo and other cities--including the upper Egyptian city of Asyut, the hotbed of Islamic militancy. It was here, 340 kilometers south of Cairo, that Rahman, a theology professor at the University of Asyut, emerged as leader of the Islamic Group.

HIGH DEATH TOLL. Today there is peace in Cairo, Asyut, and most other cities as a result of a ruthless and systematic police campaign featuring informants and torture to get information before attacking. Gone are the bombings, assassinations, and battles between police and extremists that began in mid-1992 when the militants launched their drive aimed at overthrowing the government and installing a pure Islamic state.

Now, foreigners, government officials, secularists, and other militant targets walk the streets unharassed. In fact, there have been no attacks in Cairo since extremists stabbed novelist and Nobel laureate Nagib Mahfuz last October.

But even if it lasts, the peace hasn't meant an end to bloodshed. Egypt's security forces are fighting Islamic militants in Mallawi, 260 km south of Cairo, where many extremists fled. In January, 82 militants, police, and civilians died--the highest monthly death toll since the Islamists began their campaign against the government, which has so far claimed more than 640 lives.

While the militants are weakened, many Egyptians believe they won't disappear if the government continues to try to eliminate them by force. "They will become a problem again in two or three years unless the political, economic, and social conditions improve," predicts Moustafa Said, a political scientist at Cairo University. Islamic extremism feeds on the desperation of a poverty-stricken underclass struggling to survive. They distrust the government, so almost the only outlet available to air their discontent is the Islamic Group.

FRUSTRATION. Even at their peak, the extremists were incapable of overthrowing the government, since they had scant support among the majority of Egyptians and no hope of taking on the army. But they were plenty able to wreak havoc. Foreigners and the country's tourism industry, which at its height in 1992 pumped $3 billion into the country's economy, were an easy hit.

Analysts estimate that the Islamic Group's membership is now a few thousand and dwindling. With its power on the wane, the group must also cope with the frustration that its inspirational leader, Sheik Rahman, is on trial in a distant land.

The growth of Islamic militancy in Egypt has not affected businesses here, executives say, except for tourism. Tourists, who are notoriously skittish, stayed away in droves when the extremists began attacking foreigners three years ago.

But now, tourism is beginning to stage a recovery. In 1994, a total of 2.6 million people traveled to the land of the pharaohs, generating $2.5 billion. That was up from 1993, when 2.5 million visitors came, contributing $2.2 billion. But last year was still not up to Egypt's 1992 peak of 3.2 million foreign travelers.

Tourism from the U.S. has yet to recover from its free fall at the height of the militancy. In 1992, 160,000 Americans visited Egypt, while in 1994, just 125,000 traveled there. However, "we have had an increase in visitors this last year from Japan, Italy, and Switzerland," observes Adel Abdel Aziz, chairman of the Egyptian Tourism Authority.

A government-initiated marketing campaign has helped lure travelers back to Egypt's pharaonic treasures, its Red Sea coast, and the favored destination of scuba divers, Sharm El-Sheik on the southern tip of the Sinai peninsula, Aziz says, adding: "Attacking foreigners is against our tradition and culture."EDITED BY JOHN E. PLUENNEKE By Sarah Gauch in Cairo


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