Five Years On: Security and Economy

In the past five years, economic demands of the January 25 uprising continue to resound, but have also been joined by another key demand among the Egyptian population: one for stability. From increased militant attacks in the Sinai to assassinations of government and security figures, the Egyptian government has made its war on terror a priority. Security concerns, however, have had a serious impact on Egypt’s tourism industry—a key driver in economic growth.


Instability in Egypt following the revolution left a major security vacuum in the Sinai. In August 2011, Egypt launched a military campaign in the Sinai in an effort to stem militant attacks on security forces in the Peninsula. The campaign was renamed Operation Sinai after 16 Egyptian soldiers were killed near Rafah in August 2012. In July 2013, the army denied reports that a curfew had been imposed in Rafah and Sheikh Zuweid.

Violence surged in the Sinai following Morsi’s ouster in 2013 as groups like Ansar Bayt al-Maqdis (ABM) responded violently to the state’s crackdown on Islamists and the Brotherhood. In September 2013, ABM launched a failed assassination attempt on Interior Minister Mohamed Ibrahim in Cairo. Following the attack, Egypt’s army announced a full-scale assault on militants in the Sinai. In the first days of the campaign, the Armed Forces said it killed 30 militants in an assault on 12 villages. In January 2014, ABM shot down an Egyptian military helicopter in Sinai Peninsula with a surface-to-air missile, killing all five soldiers aboard. In response, in February Egypt launched its largest operation in the Peninsula yet, killing 30 suspected militants in a series of airstrikes.

In October 2014, 28 Egyptian soldiers were killed by a car bomb at a security checkpoint in Sheikh Zuweid. The military quickly responded, closing major roads in North Sinai and establishing perimeters around towns and cities. President Abdel Fattah al-Sisi declared a state of emergency in the governorate following the attack and a curfew was imposed. The state of emergency and curfew in North Sinai have been extended repeatedly.

A month later, ABM pledged allegiance to the Islamic State (ISIS), and rebranded itself as the Sinai State. Since then, the Sinai State and other militant groups, some of whom also have ties to ISIS, have upped the ante in their insurgency against the state. According to the Tahrir Institute for Middle East Policy (TIMEP), attacks in 2014 occurred at a rate of 30 per month, four times the rate of prior years, and jumped to an average of over 100 attacks per month in the first half of 2015. Major attacks by the Sinai State in 2015 included: a coordinated attack on Egyptian soldiers in January; attacks on Egyptian security forces in April; simultaneous attacks on security installations in North Sinai in July; the beheading of a Croatian oil worker in August; the downing of a Russian airliner in North Sinai in October; and an attack on a hotel in al-Arish in November.

Meanwhile, a group calling itself the ‘Islamic State in Egypt’ has reportedly carried out several attacks in Egypt’s mainland, including an explosion outside the Italian Consulate in Cairo in July; the August bombing a branch of Egypt’s National Security Agency in Shubra al-Kheima; and a recent attack on a bus of tourists in Giza. These claim of credit for these attacks suggest that ISIS has additional cells operating in the country’s mainland aside from the Sinai State. It is unclear if a relationship exists between the two groups.

In addition, the authenticity of claims of responsibility for certain attacks is uncertain; ISIS may seek to use other groups’ attacks to its advantage by claiming responsibility, such as with the recent attack on the bus in Giza. Notably, more recently in Giza, two militant groups – the Islamic State in Egypt and a group called Revolutionary Punishment – both claimed responsibly for the same attack. Some analysts suggest that it is more likely that Revolutionary Punishment actually carried out the attack.

Revolutionary Punishment, along with other local groups like the Popular Resistance Movement, have carried out attacks on Egypt’s economic and infrastructure targets. Ahead of the Sharm al-Sheikh Economic Development Conference in March 2015, Revolutionary Punishment claimed responsibility for bombings near international banks that were participating in the conference. Weeks earlier, the Popular Resistance Movement launched coordinated bomb attacks in Giza on major telecommunications companies slated to participate in the conference. According to TIMEP, in the first six months of 2015, 37 percent of attacks in urban areas of Cairo, Giza, and Alexandria were reported to have targeted property, up from only 4 percent prior to 2015. Electricity towers and banks were also a common target of such attacks.

In some major attacks, there has been no official claim of responsibility, such as the assassination of Prosecutor General Hisham Barakat in June. However, security officials say former special forces officer Hisham al-Ashmawy who leads al-Mourabitoun, a militant group loyal to al-Qaeda, was responsible for the attack. Ashmawy is believed to be a former member of ABM, but parted ways with the group when they pled allegiance to ISIS.

While the Egyptian government has repeatedly blamed the Muslim Brotherhood for militant attacks, including those carried out by the Sinai State, the militant group itself has condemned the Brotherhood’s engagement in democratic politics as “blasphemous.” For its part, the Brotherhood has publicly condemned violent attacks by the Sinai State in the peninsula.


Economic opportunity, or the lack thereof, played a central role in the 2011 revolution. However five years later, Egypt’s economy is in many ways worse off.

In 2010, Egypt’s gross domestic product (GDP) growth stood at 5.2 percent. Despite this modestly strong growth rate, unemployment and youth unemployment remained high at the onset of the revolution, at 9 percent and 24.8 percent respectively in 2010. In 2011, following the revolution, GDP growth plummeted to 1.8 percent, while unemployment jumped to 12 percent and youth unemployment hit 35.5 percent. GDP growth remained low at around 2 percent from 2012 to 2014. Growth in 2015 increased to 4.2 percent, prompting some optimism. The government is projecting GDP growth of 5.5 percent in 2016, however the World Bank forecasts a much lower growth rate of 3.8 percent.

Unemployment has remained high, hitting a peak in 2014 at 13.4 percent. Unemployment in 2015 decreased slightly to 12.9 percent. Inflation has improved slightly after 2011, when it stood at 11.1 percent. It dropped to 6.9 percent, in its lowest rate since 2006, in 2013. However, inflation has steadily risen back to a level of 11 percent. Meanwhile, foreign currency reserves have more than halved, from $36 billion prior to the revolution to $16.445 billion at the end of December. Reserves fell by about $10 billion from both 2010 to 2011 and 2011 to 2012. An influx of Gulf aid following the revolution and after Morsi’s ouster, was key in shoring up Egypt’s foreign reserves.

The tourism industry in particular has been decimated by political instability, stifled growth, and successive militant attacks. Tourism revenues are unlikely to exceed $6 billion in 2016 according to the Minister of Tourism. The figure is less than half of total tourism income in 2010. In 2011, revenues fell by a third compared to the year before. From 2012 to 2013, they declined by 41 percent. Yet tourist revenues were up 27 percent in 2014, and the first half of 2015 saw an increase of 3.1 percent from the same period the year before. However, the downing of the Russian airliner in October damaged hopes that the industry would continue to slowly recover. Egypt’s tourism sector has been losing $283 million per month since the attack, according to the Tourism Ministry.  

Egypt has taken efforts to attract more investment and tourism to jumpstart the economy, including by hosting the Economic Development Conference, reforming investment laws, and launching megaprojects like the new Suez Canal. However little concrete progress has been made in addressing structural problems that contributed to the 2011 uprising. After initial subsidy cuts in 2014, a second round of cuts has stalled, the private sector remains weak, and the government faces a foreign currency crisis.

Elissa Miller is a Program Assistant at the Atlantic Council’s Rafik Hariri Center for the Middle East. Follow her on Twitter: @ElissaFMiller.

Image: Photo: Soldiers in a convoy secure a military funeral ceremony of security personnel killed in attacks in Sinai, outside Almaza military airbase where the funerals were held, in Cairo, January 30, 2015. (Reuters/Asmaa Wagih)