Anxious observers in Egypt and the Arab world wondering how the US would respond to the terrorist attacks of 11 September received an ambiguous answer in October that, for some, only increased uncertainty.

With Canadian, French and other NATO units headed to Central Asia, US and UK aircraft bombed Afghanistan in a military mission with an elusive goal and no clear end point. The domestic press entertained rampant speculation that the Bush administration was looking for a chance to spread its bombs to Iraq, Iran or Syria in the name of hunting terrorists. Commentators' lingering sympathy for the casualties of the World Trade Center and the Pentagon was soon overpowered by righteous warnings that strikes against an Arab nation would incur the wrath of the others.

Below the rhetoric, the anxiety level remained manageable for Westerners in Egypt and for Egyptians doing business with the West. While some firms have temporarily reduced staff levels in Egypt as a precautionary move, others have been heartened by what senior Western officials have called "excellent cooperation" from the Egyptian government and by local demonstrations (largely student-organized) that have remained smaller and far less disruptive than is frequently the norm.

As the US-led force began their campaign in Afghanistan on 7 October, at least three European concerns sent dependents and nonessential foreign staff home until the parameters of the local reaction to the strikes became clear, said senior company officials on the condition that their names not be used. At least one, a manufacturing concern, withdrew a number of its department heads, a company executive said. The source asked not to be identified for fear that the company would lose standing in the eyes of Egyptian officials and its domestic partners.

Other corporations and embassies said they would not discuss staffing and travel issues as a matter of policy, but bt learned from a Belgian media source that his nation's embassy had sent home non-essential personnel, leaving the ambassador and DCM to run the mission. In a similar vein, a contractor with the Canadian International Development Agency (CIDA) reported that the Canadian embassy was scheduled to hold an evacuation drill, while at least one Canadian citizen, a teacher registered with the embassy, reported receiving a reassuring telephone call from an embassy official.

While it was hard to count how many were leaving, it was clear that thousands were not coming. In October, a worldwide fear of flying dealt a devastating blow to Egypt's crucial tourist economy. Minister of Tourism Mamdouh El-Beltagui told the People's Assembly on 7 October that tourism had fallen 18 percent since the terror attacks. That may be a very conservative estimate. Preliminary research by the American Chamber of Commerce in Egypt suggests that Red Sea resorts are down to a fifth of their usual business or worse. As the US Congress bails out its own nation's battered airline industry, Egyptian travel and tourism professionals may make a call for their own financial rescue.

"We cannot predict it, but they're expecting it's going to be much worse than the [1997] Luxor massacre," said chamber researcher Mona Magdy.

Cultural exchanges were bruised as well. Players in the US film industry stayed home in Hollywood rather than attend the Cairo International Film Festival's 25th anniversary staging. Americans were so scarce that a Cairo TV reporter who wanted an American soundbite was forced to interview an American reporter who lives in Cairo. On the other hand, American artist Anna Castillo kept to her Egyptian tour despite the military strikes.

Study-abroad programs took a hit, too--in both directions. By mid-October, 18 American undergraduates and four graduate students at the American University in Cairo had left for home, as did a German undergraduate, a spokeswoman said. That wasn't a lot, especially compared to the Gulf War exodus, and no faculty members had left.

"Mostly their parents were scared and sent tickets. One, her parents actually came here and picked her up," said AUC spokeswoman Nihal Taraz.

Meanwhile, as accounts of racist attacks on Arabs in America continued, AUC granted late admission to three Egyptian nationals who felt unwelcome in the US and returned home. Advertising professional Reem Fahmy understands the feeling. Fahmy said that one of her fellow twentysomethings was preparing to move to the US in two months to pursue a business degree. Now he's not sure he'll be welcome there.

"Whoever was considering immigrating is reconsidering, with the current situation," said Fahmy, who works at the advertising firm Saatchi and Saatchi. "Egyptians who wanted to work or do an MBA in the United States will be very concerned because of the prejudice against Arabs in general."

Philip Frayne, spokesman for the US Embassy in Cairo, said there may be an exaggerated perception in Egypt of the frequency of attacks on Arabs in the US. "There have been some very unfortunate incidents [in September], but there has also been a very large reduction in the number of those incidents [in late September to mid-October], as President Bush has been calling over and over again for calm and respect for fellow citizens and Muslim Americans. American-Muslim and American-Arab leaders have agreed with that," Frayne said.

As for how the uncertainty could affect US business dealings in Egypt, US Embassy officials in Cairo projected an attitude of calm, but stopped short of saying that the moment is opportune for American businesses to pursue new deals here.

"Let's put it this way, we are not in any way discouraging any businesses from investing in Egypt," Frayne said. "We are encouraging American companies to go about their operations as usual."

USAID also officially held the line. The agency, which administers $693 million in US economic assistance to Egypt annually, clarified in late September that the war on terrorism would not change aid levels. Aid was already scheduled to fall gradually to $475 million in 2009.

"While the tragic events of 11 September deeply saddened Americans, Egyptians and all other employees, contractors and partners, the longstanding economic partnership between the US and Egypt continues at levels previously planned," stated Anne Aarnez, then USAID's acting director in Egypt.

The statement was designed to counter speculation that Congress would drastically cut funding out of anger at the Arab world. Counter-speculation posited that Americans, newly attuned to the strategic importance of Egypt, might even increase aid to keep an ally and shore up US influence in the region. USAID spokespersons refused to enter that guessing game.

Against that backdrop, Western businesses continued to close deals that bind them more firmly with Egypt. On 16 October, US-owned Procter & Gamble announced that it would increase its investment in Procter & Gamble Egypt (Ariel) to LE 120 million and that the detergent maker's Egyptian subsidiary would renew its long-term marketing alliance with Ideal, the washing machine manufacturer.

Ariel Factories Director Abdel Hamid Messaheb and Ideal Deputy Chairman Medhat Kamel say the renewal showed both companies' "faith and desire to help develop the Egyptian economy, through increasing job opportunities and export potential."

As for the terror attacks and military counterstrike, P&G officials said those events had not changed their business operations or strategies one iota. "It is sad to see the 11 September events and all the aftereffects, but it doesn't affect the business," said P&G Egypt/Ariel Public Affairs Manager Zeyad Mourad. "We're glad to have the trust and love that we've had from the Egyptian consumer. We're here to stay--we're even investing more."

In June, when the crisis was economic and not political, it was a show of confidence against the backdrop of the recession as Crédit Agricole Indosuez Egypt SAE, an arm of Crédit Agricole, France's largest bank in terms of capitalization, entered the local market with the purchase of Crédit Internationale d'Egypte.

Crédit Agricole officials in Egypt say their confidence has not wavered with the addition of the US-led military mission. It's a question of assessing Egypt over the long term, says Adrien Pharès, managing director. "We had the option not to make the acquisition this year. We had the option to postpone it," Pharès says. "We knew about the difficulty the country was going through in the past few years, but we did not anticipate the [11 September] tragedies that have happened."

"Crédit Agricole is not an institution that would invest on an opportunistic basis. We only make a move when we think there is a fundamental logic to do it within our strategy and where the country in the long term is promising," Pharès added. "Maybe today is not perfect, but perfection is not of this world and, indeed, Egypt has weaknesses of its own, problems of its own management. But we feel that the investment was in the right place and at the right time."

Finally, US military officials gave the green light to this year's Bright Star, the largest combined arms military exercises yet organized by the US Central Command. Thousands of US troops, including Army and Air Force special operations forces, participated in exercises with the Egyptian military in the latter half of October. Other Arab and NATO participants scheduled to join the operations, slated to wrap up on 1 November, included Jordan, Kuwait, the UK, France, Italy, Greece, Germany and Spain. bt

Dan Bernard

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