The ‘new’ North Coast: Exclusion comes home to roost
In 2019, I visited the Argentine capital, Buenos Aires. A strikingly beautiful, heavily wooded city of wide plazas and classical European architecture. The famous Río de la Plata runs alongside the city rather than cutting through it; its banks are invisible to pedestrians in most places, exerting little influence on daily life in the way the Nile does for Egyptians.
For this reason, the areas overlooking the La Plata never turned into tourist hubs, with the possible exception of Puerto Madero; where soaring towers look out across the river’s vast expanse.
What struck me strolling through this district for the first time was that most of these residential towers showed no signs of life or occupancy, save for a few security guards stationed at the entrances. When I asked the friend who had guided me to this corner of the city why that was, he explained that the occupants are mostly foreigners who visit for a few days a year, if they come at all.
These towers were built as part of a redevelopment master plan for Puerto Madero. They were designed less for the residents of the Argentine capital than for foreigners visiting for a handful of days a year or not at all—what we in Egypt call “exporting real estate”—given that these real estate units command the highest prices in the city, and perhaps among the highest globally.
Naturally, local gossip was full of speculation about who actually bought these luxury units; buyers who rarely appeared in the city, since their motive was investment rather than habitation. Some said Middle Eastern warlords. Others pointed to the Russian mafia. A third camp blamed drug barons out of Brazil, Venezuela, and Peru. Regardless of the accuracy of these rumors, the state of this small district reflects one variant of the curse of coastal commodification and the obsession with exporting real estate: a condition that may have struck Argentina only in passing, but in Egypt has hardened into an endemic disease.
It is a question that returns to us every summer, with the seasonal migration to the North Coast. What may be new this time is that the fallout of “real estate export” policies has escalated to the point of hitting Egypt’s wealthy classes; a conclusion one easily draws from following the recent controversy surrounding the management of the Marassi resort in Sidi Abdel Rahman.
So what does international experience tell us about the future of the North Coast? And do the benefits of exporting real estate outweigh its damages, or is it the other way around?
Scenarios for real estate export in Egypt
What stands out about the Marassi episode that recently took over social media is that the complaints came from a class with real influence, one that has no objection, in principle, to treating beaches as a commodity, or to premium pricing for coastal tourism,possessing as they do the capacity to spend.
Yet even members of this class were shocked by the exorbitant pricing for services on the beach itself, turning something as simple as taking a dip in the sea into a financially exhausting burden, even for their elevated income levels.
This episode reflects what lies ahead as we press forward with the policy of exporting real estate: a series of scenarios that will all ultimately transform the North Coast into a resort targeting foreigners primarily, thereby excluding numerous social strata, including the nation’s own wealthy.
The objective of real estate export began dominating government rhetoric a few years ago, culminating in the creation of a dedicated platform to facilitate marketing to foreigners as part of a national strategy. Nor is it any secret that the Ras El-Hekma deal marks a giant leap in this direction, as marketing real estate units to foreigners lay at the very core of the project led by master developer Abu Dhabi Developmental Holding Company (ADQ).
Sooner or later, then, some share of the units sold on the North Coast will pass into foreign ownership, drawing on a client base rooted in the UAE. That base won’t be limited to Emirati nationals, who account for barely 10% of the total population there anyway), but will extend across global nationalities in imitation of the Dubai model, where a recent study estimated that foreigners own 43% of total real estate value, 68% of whom do not reside in the city at all.
Expelling the rich
It would be a stroke of good fortune for Egypt’s ordinary rich if the buyers of real estate units there contented themselves with investment rather than residence or living, or even summer visits. We might then see a reproduction of the Puerto Madero model in Buenos Aires: soaring towers and luxury apartments sold to non-resident foreigners.
If, however, the Ras El-Hekma project and its sister developments funded by Emirati, Qatari, and later Saudi investments succeed in transforming the coast into a tourist destination along the lines of Monaco or the northern Mediterranean coastal towns of France and Spain, then a re-planning and redevelopment of the coast that fundamentally alters its land use will become inevitable—and this can only happen by excluding high-income strata of Egyptians.
This would mark a fundamental shift in the lifestyle of affluent groups among the upper classes and upper-middle-class strata accustomed to domestic tourism. As the North Coast is promoted as a global Riviera, the recurring phenomenon of pricing services in dollars will become normalized, and not even the wealthiest will be able to keep pace with the patterns of international tourism—unless, of course, they retreat to the old coast and redevelop that too for domestic leisure.
The coast as a source of hard currency
This will not necessarily be a bad thing for the economy as a whole, even if exploiting the coast to erect concrete resorts left deserted for all but two months of the year has repeatedly drawn sharp critique from many angles, most recently in Salma Hussein’s article describing it as “lame development.”
Yet shifting toward using the coast and its resources to generate hard-currency gains—whether through exporting real estate or transitioning from domestic to international tourism—will reflect positively on the macroeconomy, serving as a superior mechanism on the fiscal level at the very least.
The trouble lies in treating “real estate export” as a comprehensive model for achieving development. Not only because of the risk that the resulting capital inflows will prove volatile, but because real estate investment clashes with genuine development on multiple fronts: for instance, it fails to provide stable jobs for those employed within it.
In addition to everything we have previously argued regarding the perils of banking on real estate export as a solution to our current economic troubles, the Marassi “crisis” lays bare a new face of this model’s pitfalls: the deepening exclusion from Egypt’s natural resources.
There’s a certain irony in watching Egypt’s highest-income strata face exclusion in exchange for generating greater financial returns for the state through the redefinition of spatial use. This is in stark contrast to earlier forms of exclusion, seen for example in attempts to redevelop the Maspero Triangle and other areas, which hit lower-income Egyptians instead.
For years, Egypt’s high-income strata had remained safe from the exclusion wrought by “redevelopment and replanning” schemes. Has their turn finally come, to stand alongside the poor outside the compound walls, all so that Egypt might “live long”?