WHAT IS THE REASON FOR EGYPT
SELLING THE MOST BEAUTIFUL SEASIDE TOWN?
Egypt, with a population of more than 109 million, is grappling with a severe economic crisis, with record inflation and a shortage of foreign currency. According to official data, Annual inflation in Egypt reached nearly 40 percent in August, leaving many Egyptians close to or below the poverty line.
Reports have emerged that investors from the United Arab Emirates are set to buy the Mediterranean city of Ras al-Hikma in northwestern Egypt, spending a sum of $ 35 billion, sparking widespread outrage in the country. This would immediately attract $20 billion in “foreign direct investment and financing”.
The area is part of the city
of Marsa Matrouh in the Matrouh province. Its 50-kilometer-long coastal strip,
located between the cities of Dabaa and Marsa Matrouh, is one of the most
pristine beaches in the world, with white sand and turquoise waters.
There are approximately 25,000 permanent residents in the city. However, during the summer peak holiday season,
from July to September, the population quickly expands to over 250,000.
The Abu Dhabi Developmental Holding Company (ADQ) wants
to make Ras el-Hikma "one of the largest new cities developed by a private
consortium." They want to turn it into a luxury tourist
destination with a financial hub and a free zone. This project is targeted
to be completed by the year 2050.
The aim is
to reduce the country's foreign exchange deficit
The main reason for
this is believed to
be the foreign exchange crisis and the
fall of the Egyptian pound, which has lost more than half of its value in a
year on parallel markets, leading to inflation.
The pound is believed
to have fallen to more than 70 against the US dollar, making the currency more
than 50 percent weaker than its official central bank rate of 30.9.
Egyptians believed that
if Egyptian developers developed the project the profits would remain within the country.
Egyptian media reported that the investment amount would reduce the country's
foreign exchange deficit and end the exchange rate crisis.
Frequent
crisis since
1952
The devaluation of the Egyptian pound has caused
frequent crises since 1952.
Corruption, election fraud, rising poverty, and high unemployment have further
fueled resentment against the government. Since 1978, the United States has
provided Egypt with more than $50 billion in military and $30 billion in
economic aid.
Egypt's trade balance fluctuated from 2014 to 2023. The maximum trade deficit of US$39.1 billion was
recorded in 2014-2015 due to a decrease in
earnings from commodity exports. This decline was
caused by a decrease in
petroleum export earnings due to the fall in global oil prices.
There are various other
reasons for inflation in Egypt, which mainly include an increase in demand for
goods and services, a decrease in the supply of goods, and an increase in the
cost of production. Apart from this, due to the rapid
population growth in the country, the
demand for various goods and services has also increased.
The IMF approved its latest loan to Egypt in December
2022, the fourth in six years. Egypt's foreign debt has quadrupled to $164 billion. Debt
servicing currently accounts for the majority of the state's
annual expenditure.
Ras al-Hikma: A beautiful seaside town
Ras al-Hikma enjoys a strategic position on Egypt's northwestern coast, nestled between Marsa Matrouh
and Alamein cities. Its prime, direct
location on the Mediterranean Sea makes it an ideal destination for those
seeking a sophisticated urban lifestyle.
Ras al-Hikma city
stands out for its key location, making it one of the prominent tourist cities
easily accessible via recently developed new roads. Situated on the
northwestern coastal strip of Egypt, stretching 50 kilometers, it boasts direct
access to the Mediterranean Sea.
The city is designed in
a triangular shape to ensure that all residential units enjoy direct sea views.
The city’s coastline stretches 50 kilometers, with all resorts
implemented in a tiered system, guaranteeing unobstructed sea views from all
units.
Ras al-Hikma city was
built during the reign of King Farouk
at his command to serve as a retreat for him. It was named in
reverence for God’s wisdom.
Ras al-Hikma is an
ideal place for quiet relaxation and rejuvenation. Due to its moderate climate,
sea views, and mountains, it is known as one of the best luxury tourist destinations.
The use of renewable energy is prioritized in Ras al-Hikma to conserve national resources and protect the
environment. It uses modern technologies to achieve its sustainable development
goals.
Ras al-Hikma has a number of
exclusive resorts that offer a wide range of holiday units of all types,
catering to the preferences and needs of different clients.
The deal caused a strong reaction among Egyptians.
According to media
reports, after buying this city from Egypt, the UAE is
going to start work on many projects here soon. UAE has planned
to invest about $ 150 billion here.
Egypt will also have a
35 percent stake in this mega project. This
will be the largest foreign investment in the
history of Egypt. Apart from UAE, Saudi
Arabia and Qatar have also expressed their desire to buy many cities in Egypt.
News of the sale of the city
to the Abu Dhabi consortium has sparked a strong reaction among Egyptians.
Environmental experts in particular say Emirati investments have caused significant
environmental damage to Egypt's coasts.
Although the deal is set to
transform Egypt's northern coast into a world-class residential and
tourist hub, the region's residents are in pain, fearing they will be evicted
from their land to make way for Emirati investment.
They believe that no amount of money can match the
history and pride of the residents of Ras al-Hikma. However, this economic deal
is not small. The purpose behind this is to save Egypt's
ailing economy from collapse.
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