What next for Marsa Matruh’s Souq Libya?

Sunday 02/10/2016
Marsa Matruh’s Souq Libya

Marsa Matruh - Souq Libya is facing an un­certain future. Once a thriv­ing market that sold goods from across the world to tourists visiting the Medi­terranean resort, the souq’s stalls are empty and its shelves bare.

During the era of Muammar Qaddafi, Egyptian businessmen and traders would travel to Libya to buy heavily discounted goods, transporting those to Marsa Matruh to sell for large profits.

But Souq Libya has been in de­cline since the 2011 fall of the Qaddafi regime and the chaos that followed. The political and eco­nomic situation in Egypt is no less tense as tourist numbers plummet and Cairo increases security along its border with Libya, fearing the presence of the Islamic State (ISIS) and armed smugglers.

Ahmed Gomaa, who owns a spice shop in Souq Libya, said most of the products for sale in the souq are produced locally. In previous years the main draw of the market was the availability of foreign, and par­ticularly European, imports.

“The market is a victim to what is happening in Libya in terms of the armed conflict and terrorism that is taking place on a daily ba­sis. We, at least, had stability dur­ing the Qaddafi era and European goods would flow across the border to Marsa Matruh,” he said.

“Traders would travel to Libya themselves and be able to return [to Egypt] easily, it was almost as if they were travelling between dif­ferent Egyptian provinces, not across an international border. As for today, it is very difficult to transfer any goods between the two countries.”

The border crossing between Egypt and Libya, near the village of Sallum, is closed except for a few hours each day. Security on both sides of the border is tight, given the rising spectre of terrorism and weapons smuggling.

Twenty-three Egyptian workers were briefly kidnapped in Libya in August while returning through the Sallum crossing. There has been a major exodus of Egyptian workers from Libya via the crossing because of the deteriorating security situa­tion.

Ten years ago, the Sallum border crossing saw ambitious Egyptian traders and businessmen flocking to Libya to buy goods for import to Egypt. Today Egyptian workers are making the reverse journey. Al­though goods from countries such as the United Arab Emirates, Saudi Arabia, Germany, Japan, Turkey, Tunisia, India, Pakistan and China continue to enter the Libyan mar­ket, these are not subsidised as before. Libyan imports previously were on par with, if not cheaper, than locally manufactured goods.

“The majority of the goods then were not actually made in Libya but they would be imported by Libya from more than 70 countries around the world under the con­trol of the General People’s Com­mittee… but now Libya’s ports are closed and this has had a huge ef­fect on Libya’s markets,” Gomaa said.

“It is only thanks to Souq Libya’s reputation and history that we are even here still,” he added.

In addition to a lack of goods, there is also a lack of demand due to the absence of tourists. The number of tourists visiting Egypt declined massively after Metro­jet Flight 9268 was blown up over the Sinai peninsula in 2015 killing all 224 people aboard. A number of European countries, including Britain and Russia, suspended di­rect flights to Egypt citing security concerns.

Egypt has ramped up its security presence across the country, par­ticularly in the Sinai, where an ISIS affiliate has carried out attacks, and in western Egypt where Cairo fears infiltration from ISIS in Libya.

Souq Libya seller Ahmed Hamid blamed ISIS for the souq’s decline. “The presence of ISIS in Libya is the main reason for what we are seeing today in Souq Libya,” he said. “The Egyptians have increased security along the border and are carrying out exhaustive searches of any trucks that are coming from Libya for fear that they could be carrying ISIS elements or arms.

“You cannot punish the shop­keepers and cut off their livelihood because of what is happening in Libya in terms of security prob­lems. Our livelihood depends on continuing trade between Egypt and Libya.”

Hamid, who runs a cosmetics shop in Souq Libya, said he had lost about $11,000 this year due to de­clining sales and lack of tourists in Marsa Matruh, forcing him to sell products at a loss as his stock ap­proaches its sell-by date.

He criticised the Egyptian gov­ernment’s decision to increase cus­toms taxes, saying this had made an already complicated situation more difficult. Cairo increased tariffs on a wide range of imports earlier this year, part of an attempt to deal with its foreign currency shortage. Items such as clothing and house­hold appliances saw increased tar­iffs, while custom tariffs on some items such as nuts and fruits were increased by as much as 100%.