Egypt 'to seek aid' after tourism slump

Tourists have stayed away since 11 September

Egypt is poised to receive international help in tackling a funding gap blamed on slump in tourism following the 11 September attacks, a World Bank official has said.

The country, which last month devalued its currency to encourage foreign investment, it to ask organisations including the European Commission for extra cash, Mahmood Ayub said.

Mr Ayub, World Bank country director for Egypt, said Cairo is to plead for help in meeting a $2.4bn current account shortfall when donor states and organisations meet at the Red Sea resort of Sharm el-Sheikh next month.

"They should be able to get $2bn from these sources without any problem," Mr Ayub said.

The statement comes two days after the African Development Bank agreed to lend Egypt $1.6bn to finance infrastructure and human development projects over the next three years.

Growth slide

The cash squeeze has been blamed on a plunge in the number of tourists visiting Egypt since September's terror attacks, which affected passenger numbers on long-haul flights in particular.

Tourist revenues are expected to hit $2.6bn for the year to the end of June 2002, compared with $4.3bn a year before.

With the weak oil price also affecting revenues from crude, Egypt's economic output will grow by only about 2% in the 12 months to the end of June, less than half the average of recent years, Mr Ayub said.

"[This] is just about population growth so per capita growth will not increase for the first time in about 10 years," he added.

The US, Egypt's biggest donor, has said it will accelerate payment of a $959m aid package to help Cairo cope with the downturn.

About 40 donors are expected to attend the Sharm el-Sheikh meeting, on February 5-6, which was delayed from October because of the terror attacks.

The meetings are held every two or three years.