Bear Market: Your Guide to Surviving the Bloodbath

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Summary:

It has not been a good time if you are investing in 2022, but a bear market is not forever. Win by staying invested for the long term.

Personally, my growth-focused Exchange-Traded Fund (ETF) portfolio dropped over 14% in the past 3 months.

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In addition, a portion of my dividend-focused ETFs in the Freedom Fund has shed about 14% in value so far:

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Seeing my investments down to this extent is not pleasant, but it is not the end of the world either.

In this post, I want to share with you several important insights on the stock market – and hopefully, this will boost your confidence to stay the course in this long game!

If you like this post, consider subscribing to my FREE weekly newsletter where I’ll share all things I learn about personal finance & investment with you!

#1 A bear market is not forever

#2 Win by staying invested for the long term

#3 Why does the market go up in the long run?

My Bear Market Survival Guide

#1 Stick to a long-term investment routine

#2 Never invest the money you need in order to gain something you want

#3 I will not let my investment performance affect how I look at myself

Useful Resources & Guide

Disclaimers

#1 A bear market is not forever

Technically, a bear market is described as a market dropping over 20% from the all-time high.

While we are not there yet for the S&P500 index, I think we are close enough for me to call a bear market right now.

I can’t tell for sure how long a bear market will last – but they do come to an end eventually. Let’s take a look at the history:

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Over the 15 bear markets in the past, the average decline was about 30%, where the market generally took under a year to reach the bottom.

The recovery from the bottom? On average, a little more than 1 ½ year.

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That said, the last 3 bears recovered relatively quickly.

8 out of the 15 bears recovered within a year.

The worst bears were in 1973-1974, 2000-2002, and 2007-2009 which all took more than 4 years to recover.

I’m not certain how this one will play out – but as you can see, the market always recovers.

#2 Win by staying invested for the long term

For the last 95 years (1926 – Feb 2022), the US stock market (S&P500 index) has produced an average of 10 – 11% annually.

In fact, there has never been a 20-year period in the market where it is down on a nominal basis:

#3 Why does the market go up in the long run?

Why does the stock market go up in the long run?

One of the biggest reasons is because the economy grows and companies earn more money.

In the 1920s, the earnings per share (EPS) for the S&P 500 was $1.11 while companies paid out $0.78 per share in dividends.

By the end of 2021, those numbers were $197.87 and $60.40 respectively.

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Simply put, over the past 90+ years, earnings on the US stock market have grown by 6% annually, while dividends have grown 5% per year.

When you invest in the stock market, you are investing your money in assets that produce income on your behalf. This means you get to participate in the growth and innovations that come with it.

My Bear Market Survival Guide

If you are feeling miserable from this bear market, hopefully what you’ve read so far can give you a big picture perspective on your investing journey.

Below are 3 things that I’m personally practicing in this bear market:

#1 Stick to a long-term investment routine

Having an investment routine helps especially in times of chaos.

Since I cannot predict when a bear market will end, I will continue sticking to my investment routine (ie. Dollar Cost Average X amount monthly) knowing that I will be buying income-producing assets at a discount.

Remember, the market favors those who stay on course in the long run.

#2 Never invest the money you need in order to gain something you want

This is so important:

Avoid investing in such a way that your ability to put food on the table depends on the returns of your investments in the coming month:

We cannot tell when a bear market will end.

A new low can go lower!

A bear market may lead to a recession – don’t use the money you saved up for rainy days to invest!

#3 I will not let my investment performance affect how I look at myself

Your life is not defined by your investments. Neither is net worth because it is a poor definition of success in life.

Reflect and find meaning in your life outside of your portfolio. Eating and living healthier is a good place to start.

Useful Resources & Guide

How to invest in the S&P500 index as a non-US resident.

ETF investing guide – getting started!

Learn dividend investing

Disclaimers

This post is produced purely for sharing purposes and should not be taken as a buy/sell recommendation. Past return is not indicative of future performance. Please seek advice from a licensed financial planner before making any financial decisions.

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

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Devin

With the parliamentary election over in Lebanon, the country will have to focus on three broad objectives. First, forming a government. Second, preparing for the presidential election in September or October. And third, moving forward on essential economic reforms to alleviate the suffering of the population. However, the election results may well indefinitely hinder the achievement of these objectives.

The first priority will be to form a new government. Under normal circumstances, this should not pose a major challenge, since the government should be in power only until the presidential election. However, if there is no consensus around the next head of state and Lebanon enters a presidential vacuum, the government will take on presidential powers and may last far longer than expected. That is why negotiations over its formation are bound to be highly divisive.

The question of who will succeed President Michel Aoun is also contentious. Until the parliamentary election, the two front-runners were Gebran Bassil, Mr. Aoun's son-in-law, and Suleiman Franjieh, a politician from northern Lebanon, whose grandfather was president from 1970 until 1976. However, the largest Christian bloc post-elections will be controlled by the Lebanese Forces, whose leader Samir Geagea also has presidential ambitions and who will strongly contest Mr. Bassil and Mr. Franjieh.

Mr. Bassil, who heads the Free Patriotic Movement, lost ground in the legislative election, while the list backed by Mr. Franjieh did relatively poorly. Neither man, therefore, will be able to credibly make the case that he is the most legitimate Maronite Christian candidate for the presidency. The fact that Hezbollah strenuously opposes Mr. Geagea suggests there will be no easy agreement on a successor to Mr. Aoun, and the outcome may be a long political void, unless a compromise can be reached.

The election results suggest that two broad blocs will emerge in Parliament – one led by the Lebanese Forces, with its allies, particularly from the Sunni community; and a Hezbollah-led coalition, formed with the Aounists. This may make for a period of stalemate ahead, because of Lebanon's widening polarisation.

All this will have a fundamental, and very negative, bearing on economic reforms, which have not progressed since the economy collapsed in 2019. Yet, with economic indicators continuing to deteriorate and the World Bank predicting zero growth in 2022, Lebanon cannot afford to waste more time.

A report this month by the UN special envoy on poverty, Olivier de Schutter, accused the government and the central bank of human rights violations in impoverishing the population. The report said that Lebanese officials had "a sense of impunity", and appeared to be living "in a fantasy land".

Recently, the Lebanese government and the International Monetary Fund agreed to what is known as a staff agreement, in which the IMF said it would provide $3-4 billion to Lebanon if the country implemented required economic reforms and an audit of the banking sector. Yet, continued factionalism has hindered progress.

If political divisions are exacerbated in the coming months, a final agreement over an IMF-led reform programme will be highly improbable this year. What this would mean is that in the best-case scenario, Lebanon could begin focusing on economic priorities only after a new president comes to office, whenever that occurs.

What is unfortunate in this regard is that the government has reportedly advanced in its economic plan to take Lebanon out of its crisis. Recently, Deputy Prime Minister Saadeh Al-Shami, who is playing a key role in negotiations with the IMF, stated that the technical aspects of banking sector reform were completed. While this is good news, several more months of continuing deadlock could have a disastrous impact on the well-being of the Lebanese, and on banks in particular.

Finally, a major factor that will help define the period ahead is regional calculations. A number of Arab states have shown a renewed momentum in trying to contain Hezbollah's power in Lebanon, which has made the party uneasy. This mood will not have been helped by the gains made by the Lebanese Forces in the election. The mainly Christian party has close ties with Saudi Arabia, which Hezbollah sees as a threat.

As the Arab states, especially the Gulf states, reinforce their stakes in Lebanon, this could lead to one of two possible outcomes: a struggle for influence with Iran in the country that is unlikely to come out with a clear winner. This can potentially bring about an eventual agreement to share influence. Alternatively, Hezbollah and Iran might try in some way to reimpose their hegemony. But this would be risky, as the strength of the party's cross-sectarian alliances have been eroded.

The most likely outcome is that Lebanon will remain at a standstill in the coming months, and perhaps even beyond that, as the two broad alignments neutralise each other in Parliament. Neither side will be able to overcome the other, and both sides will want to avoid a civil war. Meanwhile, the Lebanese will continue to suffer as their political parties pursue clashing agendas, with little concern for the population.

Source: The National News

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Owen Li

Lockdowns have created problems for banks in China as they have become more risk-averse. China's central bank has promised to help but it lacks a solution. We believe that asset management companies play a role in boosting overall credit. But there is no perfect solution when the uncertainty of long lockdowns is high.

Very weak loan growth

New yuan loans grew only CNY645.4bn in April after a CNY3130bn increase in March. The market consensus was CNY2200bn. April is typically a month of lower loan growth than March, but this April's loan growth is just too weak. This matches the very soft growth in aggregate finance, which grew only CNY910.2bn in April compared to CNY4650bn in March.

Banks can blame lockdowns

The main reason for such small credit growth is because of Covid lockdowns that have created difficulties for getting new loans. During lockdowns, there are many individuals and companies who suffer from loss of wages and loss of business, so therefore there should be an increase in demand for loans. If the supply of loans was steady, we should have seen a jump in new loans in April.

But that was not the case because banks in mainland China are more credit sensitive nowadays. During lockdowns, banks tend to be more risk-averse. They have been told to keep past due loans on their books. Under these circumstances, banks have become unwilling to create new loans, as that would mean taking on more risk by getting new loans and then waiting for them to become past due if lockdowns continue.

This is bad for the government as it would like to see banks giving a helping hand to the economy. But from a risk management perspective, banks are protecting their capital ratios, which isn't a bad idea for the whole financial system in China.

PBoC is undecided: To cut or not to cut

The People's Bank of China (PBoC) is struggling to decide on whether to lower interest rates by cutting the policy rate (Medium Lending Facility) and/or the required reserve ratio (RRR). There are mixed messages from the government and the central bank. It is difficult to decide because cutting interest rates is not a direct way to help an economy that has been damaged by lockdowns. Fiscal measures would be more effective, and there are quite a few of them for small and medium-sized enterprises and individuals.

There may be new tools from the PBoC, as it has promised, which will hopefully arrive soon.

We believe a way out is for banks to divest some loans to asset management companies, allowing banks more room to increase lending. But the asset management companies have to take the weak credit from banks. Then there is the issue of how much weak credit the asset management companies can hold without raising too much capital. There is no easy solution for easing monetary policy when the uncertainties of long lockdowns remain high.

Source: ING

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Jason

Britain said on Tuesday it would push ahead with a new law to effectively override parts of a post-Brexit trade deal for Northern Ireland, inflaming tensions with Europe.

What Is the Northern Ireland Protocol?

As part of Britain's departure from the EU, Prime Minister Boris Johnson's government agreed to effectively leave Northern Ireland within the EU's single market for goods and customs union given its open border with EU member Ireland.

That created a customs border in the sea between the rest of the United Kingdom and the province, which pro-British communities say erodes their place within the UK.

London says the attendant bureaucracy created by the Northern Ireland Protocol is intolerable and that it is now threatening the 1998 peace agreement that mostly ended three decades of sectarian violence in the province.

Checks And Paperwork

Many of the checks on goods coming from Britain have not been implemented after London applied grace periods. Where changes have come into force, paperwork, costs and staffing- needs have risen.

Britain says a "green lane" should be introduced for products destined for Northern Ireland, avoiding the full checks needed for the EU. Additional labelling would increase costs for producers however.

British retailer Marks & Spencer says it takes around eight hours to complete post-Brexit paperwork to move goods into its stores in the Republic of Ireland, and around an hour for Northern Ireland currently, due to the grace periods.

During the first year of the protocol trade between the Republic of Ireland and Northern Ireland jumped, with imports up 65% and exports to the province 54% higher, suggesting stronger ties between Northern Ireland and the Republic.

What Britain Wants, What Brussels Says

Britain has tried to force a change over Northern Ireland trade before, through an Internal Markets Bill that several British officials described to Reuters as a "shock tactic".

After an initial backlash, trade talks resumed. The EU offered to ease the rules in October, 2021 but Britain said they did not go far enough, and were actually worse than the current operation in some regards.

Government officials say when the protocol was signed, both sides agreed that some parts might need to change if the treaty produced problems for the province.

Under the new plans, legislation would ease the movement of goods, apply Britain's tax regime in Northern Ireland and hand London more say over the laws governing the province.

The EU says the protocol is a legally binding treaty that was freely entered into by the UK government, and is frustrated by 'Groundhog Day' cycles of repeat crisis over the issue.

Brussels says any unilateral action is unacceptable but has repeatedly said it is willing to look for practical solutions within the existing framework.

What could Europe do?

The Commission could relaunch "infringements proceedings" that were originally triggered by a British move to extend grace periods. They were halted in favour of more talks.

The Commission could immediately restart those proceedings, concerning alleged breaches of EU law, although it could take two years before any European Court of Justice ruling and fine. It could also just retaliate over a broken treaty.

The Commission could also look at a separate dispute settlement system which was included as part of the Brexit divorce and trade deal. That could lead to the suspension of parts of the EU-UK trade agreement and result in the imposition of tariffs.

The Role of The Unionists

Elections to Northern Ireland's regional assembly this month reaffirmed that a majority of lawmakers favour retaining the protocol and that it should be refined in talks with the EU. All pro-British unionist politicians are opposed to it.

The Democratic Unionist Party, the largest pro-British party, has refused to enter a power-sharing administration until the protocol has been replaced, preventing the assembly from sitting.

The DUP, which fears a loosening of ties with the British mainland, wants the removal of all checks or planned post-Brexit checks on goods moving from Britain to Northern Ireland. It said the UK threat of unilateral action was not sufficient.

The Irish nationalist Sinn Fein, the province's biggest party following the assembly elections, accepts the protocol given the party's goal of Irish unification and wish to remain in the EU.

With small militant groups still behind some sporadic violence in the region, analysts say a political vacuum is never good in Northern Ireland. However there was no major impact when a disagreement between the major parties meant the regional assembly did not sit between 2017 and 2020.

The Northern Irish Assembly is due to vote for the first time in 2024 on whether to retain the protocol. If a simple majority votes against, it would cease to apply after a further two years. However, if, as expected, lawmakers vote to retain it, the next vote will be held four years later.

Can Britain and Europe afford a trade war?

With inflation surging in Britain and the EU, a trade war would be damaging to both sides. Johnson's government has ramped up the rhetoric on multiple occasions, before softening its tone. But the issue remains unresolved.

Philip Shaw, chief economist at Investec, said the pound remained potentially liable to a further sell off if it looked like Europe could impose tariffs.

Source: The Business Standrd

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Owen Li

For up to 12 days every month, Tran Nhu Anh Kiet, a supermarket owner in Vietnam's Ninh Thuan province, is forced to turn off his solar panels during the most lucrative peak sunshine hours.

"I'm losing on average 40 percent of output," Kiet told Al Jazeera, referring to the solar panels he installed on the roof of his store so he could sell power to the national grid.

"Before the curtailments, our revenue was 100 million Vietnamese Dong [$4,136], now it is just 60 million Vietnamese Dong [$2,589]."

If Kiet did not shut them off of his own accord, the state power company would "come and disconnect them instead".

Across southern Vietnam and the Central Highlands, authorities are asking small-scale energy producers like Kiet and industrial solar farms alike to limit their operations due to infrastructure limitations.

After an unprecedented boom in renewable energy investment in recent years, the transmission lines that connect solar and wind projects to the national grid lack the capacity to deal with spikes in supply.

Policymakers have not been able to keep up either, leaving regulatory gaps that prevent some investors from monetising the power they harness.

"A [transmission] line takes three years to build, and a wind farm one year to build," Minh Ha Duong, a clean energy expert, told Al Jazeera. "So lines need to be planned years in advance. This was not possible since in 2018 nobody knew for certain where they would be needed."

After Renewables Frenzy, Vietnam's Solar Energy Goes to Waste_1

Between 2017 and late 2021, Vietnam offered 20-year contracts to buy electricity from new solar and wind power projects at fixed rates, a common policy used around the world to encourage investment in renewable energy known as feed-in tariff (FIT). At more than $70 per megawatt-hour (MWh), the rates far exceeded what other Southeast Asian countries were offering at the time. The rooftop FIT in Thailand in 2019, for example, was only about $57 per MWh.

"The reason for this policy was to avoid the risk of electricity shortages," Duong said. "Because the coal and gas power plants we planned to build were not [concluded] on time."

The policy worked. Attractive tariffs coupled with a short eligibility window sparked a construction frenzy, especially in solar.

BIM Energy is among the major Vietnamese investors that jumped on the bandwagon, citing attractive FIT rates and Vietnam's prior commitment to increase renewable energy's share in the energy mix from 6 percent in 2016 to 10 percent in 2030.

"The government has issued breakthrough mechanisms for wind and solar power," Nguyen Hai Vinh, deputy director of BIM Energy, told Al Jazeera. "In parallel, local governments worked hand in hand with us throughout the project development phase."

The coordinated effort enabled the Hanoi-headquartered company to finish 500MW worth of solar and wind farms in time to enjoy favourable FIT rates.

Major government support schemes have included income tax and land lease exemptions. The public's increasing concern over air pollution caused by coal has also meant that support for clean energy has been on the rise.

Renewables boom

In 2019, Vietnam overtook Thailand as the country with the largest installed capacity for solar and wind power in Southeast Asia. By the following year, the country's total solar power capacity reached 16,500MW, far surpassing the government's target of 850MW.

Today in Ninh Thuan, numerous solar panels and wind turbines stand tall among the rice fields and salt farms.

Kiet, who hails from the coastal province, experienced the boom firsthand.

Sensing the opportunities offered by falling solar panel prices and government incentives, Kiet in 2019 co-founded Viet Sun, one of about 100 companies that sprung up in Ninh Thuan at the time to install rooftop solar panels. With just 14 staff members, Viet Sun has had more than 300 clients to date, ranging from farmers to his former high school teacher.

As with every boom, the bust soon followed.

During the rollout of its latest FIT which ended in 2020, the government capped solar power eligible for the rate in Ninh Thuan at 2,000MW.

Despite state power employees going door to door towards the end of 2020 telling villagers not to invest any more, installations continued.

In March, government inspections uncovered that multiple state power companies in southern Vietnam, including Ninh Thuan, had connected new rooftop solar panels after the FIT deadline had expired.

With no follow-up pricing mechanism, some solar investors have not been able to sell all the power they generate.

After Renewables Frenzy, Vietnam's Solar Energy Goes to Waste_2

Trung Nam Group's solar farm Thuan Nam, the largest such facility in Southeast Asia, is among them.

Even though it became operational in October 2020, in time to be eligible for the FIT rate at $.0935 per kilowatt-hour, the farm has not been able to sell 40 percent of its 450MW capacity because Ninh Thuan's total solar power generation has well exceeded the government's 2,000MW cap. On top of that, like other investments in southern Vietnam, the project has been facing curtailments due to the limited capacity of transmission lines.

"This is extremely wasteful for the company, and a waste of national resources," Trung Nam Group told Al Jazeera in a statement. "Our revenue sources have hence experienced difficulties, seriously affecting our ability to balance the books and arrange capital as well as Trung Nam's reputation in the eyes of our financial partners."

Last year was particularly difficult for Vietnam's renewable energy investors. Business closures during COVID-19 lockdowns reduced demand for power, forcing widespread curtailments. In September, about 40 solar investors in Gia Lai province, Central Highlands threatened the government with a lawsuit after they were forced to repeatedly cut supply, putting them in financial difficulty.

"They cut [power supply] every weekend, they cut 50 percent of capacity," Huynh Thi Ha of Hung Khanh Solar Co Ltd, one of the investors, told Al Jazeera.

"It has affected my ability to pay back debts."

Uncertainties over curtailments and post-FIT pricing have been plaguing wind power investors, too. Many experienced significant delays in construction, unable to fly in experts and ship wind turbines on time due to global supply chain bottlenecks and travel restrictions in place throughout 2021. As a result, 62 wind power projects missed the October deadline for the wind power FIT.

To date, the government has yet to issue a replacement pricing policy, leaving wind and solar power projects that finished construction after the expiration of their respective FITs unable to sell electricity.

After Renewables Frenzy, Vietnam's Solar Energy Goes to Waste_3

"The wind power companies that have missed the FIT deadline are anxiously awaiting a new mechanism, because they'd already invested money into the project," Bui Vinh Thang, country manager for the Global Wind Energy Council, told Al Jazeera. "We need a new policy with a clear roadmap."

But despite the risks, Vietnam's market for renewables, especially wind, remains attractive and profitable in the eyes of many investors, according to Thang.

Vietnam is expected to approve its eighth power development plan for 2030 this May, after two years of revisions and delays. The latest draft was revised to reflect the government's commitment to becoming carbon neutral by 2050. Under the plan, the share of coal power would drop from about 30 percent in 2025 to 13 percent in 2045, with renewables, excluding hydropower, rising from about 23 percent in 2025 to up to 52 percent in 2045.

In the meantime, eyes are also on the potential for a green post-pandemic recovery that would keep Vietnam's boom in renewable energy going.

In January, the World Bank urged Vietnam to launch competitive bidding programmes for renewable energy in lieu of the expired FITs while also modernising the national grid and introducing energy storage systems.

Investors are already taking action. Trung Nam Group is the first private entity to have built a transmission line, which traditionally has been an exclusive domain of the state. Meanwhile, smaller players like Kiet are looking into the option of offering affordable batteries for rooftop solar panels.

"We have a paradox that now there's an excess supply of electricity from renewable sources, yet we have to import power from China," Kiet said. "It's such a waste of solar investment thus far."

Source: Al Jazeera

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Devin

Egypt is seeking to increase Arab tourism from the Gulf at a time when the vital tourism sector has struggled to overcome the setback it suffered with the Russian invasion of Ukraine.

The war that broke out between Russia and Ukraine in February has hindered the normal influx of tourists from the two countries, while they constituted about a third of the total number of tourists who flocked to Egypt annually.

Tourism, along with the revenues of the Suez Canal and the remittances of workers abroad, constitutes one of the main sources of foreign currency in the country, which has been weighed down by the pressure of the war in Ukraine on its economy, as it struggles with an unprecedented wave of inflation.

Egypt adopted harsh measures in an attempt to overcome the repercussions of the war, including the devaluation of the local currency by 15% in March. It also resorted to the International Monetary Fund to seek an emergency aid program to address the current economic crisis.

In late April, the Egyptian Ministry of Tourism launched a promotional campaign on social media — titled "Your vacation in Egypt" — to attract foreign visitors who are planning a summer vacation abroad.

The campaign mainly targets Arab markets exporting tourism to Egypt, including Saudi Arabia, the United Arab Emirates (UAE), Kuwait and Jordan.

Amr el-Kady, CEO of the General Authority for Tourism Activation affiliated with the Ministry of Tourism, said in a statement that the campaign also aims to revitalize domestic tourism.

Egypt had launched a similar campaign in March called "Follow the Sun," to attract tourists from the United Kingdom, Germany, Italy, France and the United States.

Tourism officials in Egypt expect the war in Ukraine to hinder growth in the sector's revenues. Deputy Tourism Minister Ghada Shalaby said in an April 18 interview with Bloomberg that "expectations for Egyptian tourism in 2022 are not higher than last year," without mentioning any estimates.

Shalaby noted that the government is looking to attract tourists from India, Pakistan, Morocco, Algeria and Gulf countries including Bahrain, Qatar and Kuwait.

Data published by the Ministry of Tourism in July 2021 indicate that about 20% of the tourists who used to visit Egypt before the coronavirus pandemic came from Arab countries. Saudi Arabia comes first, followed by Kuwait and the UAE.

In 2021, Egypt achieved tourism revenues that exceeded $13 billion, bringing back pre-pandemic levels, according to the ministry data.

Meanwhile, Minister of Tourism and Antiquities Khaled al-Anani had revealed in January 2021 that 3.5 million tourists brought in $4 billion of tourism revenues in 2020, marking a 70% decline from 2019, when tourism revenues reached $13.03 billion, with more than 13 million tourists visiting the country that year.

Magdy Salim, former official in the Ministry of Tourism, expects inbound tourism to Egypt to drop by 50% compared to 2021.

He told Al-Monitor over the phone that this percentage might still increase as the long-term effects of the coronavirus pandemic are still being felt.

Egypt was hoping that its tourism sector would be active this year, coinciding with the easing of COVID-19 restrictions in most countries. However, the Russian war on Ukraine has increased the burdens on tourism, which is one of the most important sources of national income for Egypt.

In 2019, Ukraine had the second-largest number of tourists visiting Egypt, accounting for 1.6 million visitors and recording an increase of 32% from 2018.

More than 727,000 Ukrainian tourists entered Egypt in 2020, according to the Ukrainian Embassy in Cairo, constituting 21% of the total number of foreign tourists who visited Egypt in that year.

According to the Ukrainian State Agency for Tourism, 1.46 million Ukrainians traveled to Egypt in 2021, making Egypt their second-most popular tourist destination after Turkey.

Salim noted that the tourism sector has been greatly affected by the suspension of incoming Ukrainian tourism, which has been growing significantly in recent years, ruling out the return of Ukrainian tourism in the foreseeable future to pre-war levels.

Meanwhile, Russia has always been at the forefront of the exporting markets for tourists to Egypt. Nearly 3 million Russian tourists visited Egypt in 2014, before Moscow imposed a ban on direct flights to Egyptian tourist destinations following the crash of a Russian charter plane upon takeoff from Sharm el-Sheikh in 2015, which killed all 224 people on board.

In July 2021, Russia lifted the ban on charter flights to and from Egypt. Since then, 700,000 Russians visited Egypt until the end of 2021, with 125,000 Russian tourists entering the country in the first two weeks of 2022, according to Russian Ambassador to Cairo Georgy Borisenko.

To revive inbound tourism, the Egyptian government started early April to implement a facilitation package for tourist visas allowing entry to the country. The package included, for the first time, granting foreigners coming to the country an emergency entry visa at the various arrival terminals, provided that they hold entry visas for Japan, Canada, Australia, New Zealand, the United States, the United Kingdom and the Schengen countries.

On March 22, the government also agreed to extend the charter flight stimulus program until the end of October. The program, which aims to support tourism, allows airlines to obtain cash incentives ranging from $1,500 to $3,500 per flight. It was supposed to end late April, but the program will now continue to operate until the end of October.

A source in the Ministry of Tourism told Al-Monitor on condition of anonymity that the tourism sector will not fully recover before 2025.

The source said that the ministry has a long-term plan to target new tourist markets, especially from Latin America and East Asia, with the increase in the volume of inbound tourism from the Gulf countries in an attempt to bridge the gap created by the Russian war and, before it, the coronavirus pandemic.

Egypt was one of the first countries to open its doors to tourists in July 2020 amid the implementation of strict precautionary measures in a desperate attempt to save the tourism sector, whose revenues dropped by about 70% during the same year due to the pandemic and the subsequent closure of tourist facilities and hotels, travel restrictions and lockdowns that affected the entire world.

The pandemic led to a decrease in the hotel occupancy rate in Egypt by about 60% in 2020, which caused losses of about $14 billion, according to Egyptian Finance Minister Mohamed Maait.

However, tourism workers hope that performance will gradually improve and that some losses will be compensated with the resumption of flights between Moscow and Cairo, after a short halt due to the war, in addition to limited flights between Russia and the Red Sea resorts.

Shalaby said the announcement of new international flights to Sharm el-Sheikh in the Red Sea could boost tourism revenues as well.

Egypt welcomed April 17 the first direct flight between Sharm el-Sheikh and Tel Aviv, as part of an agreement reached between Egyptian President Abdel Fattah al-Sisi and Israeli Prime Minister Naftali Bennett in March.

In early April, 300 Russian tourists arrived in Hurghada, the first arrival since the start of the Russian war on Ukraine.

Russian companies are also expected to increase the number of flights to Egypt, coinciding with the decision of authorities in Moscow to lift COVID-19 restrictions on regular and charter flights to 52 "friendly" countries, including Egypt.

In addition to the resorts in Sinai overlooking the Red Sea, which is famous for its coral reefs, Egypt is preparing to open the Grand Egyptian Museum in the last quarter of 2022. Egypt is relying on this 20 billion Egyptian pound (about $1 billion) project to revive the tourism sector, with more than 100,000 antiquities, including 5,000 pieces within the Tutankhamun collection, displayed at the museum.

"It is necessary to knock on all doors to revive tourism, which directly affects the 2 million people working in the sector," Salim concluded.

Source: Al Monitor

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Devin

The EU has threatened to retaliate with "all measures at its disposal" if the UK proceeds with controversial plans to rip up parts of the Northern Ireland Protocol.

The Foreign Secretary has set out her intention to bring forward legislation within weeks, overwriting parts of the post-Brexit deal, freeing goods destined to stay within the UK from EU-level checks.

Liz Truss told the Commons the move was needed to reduce "unnecessary bureaucracy" and to protect the Good Friday Agreement, arguing that the EU's proposals "would go backward from the situation we have today".

She said the Bill would take measures to protect the EU single market by implementing "robust penalties" for those who "seek to abuse the new system".

But European Commission vice-president Maros Sefcovic criticised her plan and warned that Brussels could retaliate.

Should the UK proceed with the Bill, the EU will respond with "all measures at its disposal", he said.

This is likely to aggravate fears the move could spark a trade war with the bloc.

The legislation will propose separate "green" and "red" lanes for goods travelling between Great Britain and Northern Ireland, drawing a line between those destined to stay within the UK and those heading to the Republic of Ireland and beyond.

There will be no crossover between the channels, it is understood, with goods filtering through one or the other, depending on their intended destination.

This will override the current arrangements, whereby Northern Ireland is effectively kept in the EU's single market for goods, with a hard border down the Irish Sea.

The row over the treaty has created an impasse in efforts to form a devolved government administration in Belfast, with the Democratic Unionist Party (DUP) refusing to join an executive unless its concerns over the situation are addressed.

DUP leader Sir Jeffrey Donaldson said Tuesday's move was "welcome if overdue", and a "significant" step towards getting power-sharing in Northern Ireland back up and running.

He told the Commons his party will take a "graduated and cautious approach" as the legislation progresses.

But Ireland's foreign affairs minister, Simon Coveney, said the unilateral action from the UK was "damaging to trust".

"At a time when people in Northern Ireland have chosen their elected representatives and want to get the executive back up and running, the path chosen by the British Government is of great concern," he said.

Prime Minister Boris Johnson insisted problems with the protocol must be addressed.

On a visit to Paddington station, west London, he said: "What that actually involves is getting rid of some relatively minor barriers to trade.

"I think there are good, common sense, pragmatic solutions. We need to work with our EU friends to achieve that."

The protocol was negotiated by Mr Johnson as part of the Brexit Withdrawal Agreement.

Asked how he could justify breaking a treaty he signed, the Prime Minister said "the higher duty of the UK Government in international law is to the Good Friday Agreement and the peace process".

He added: "That is the thing we have to really look to."

Northern Ireland's 1998 Good Friday peace agreement contains provisions to protect and develop relations, both on a north-south basis on the island of Ireland and on an east-west basis between the island and Great Britain.

The UK claims the protocol has upset this "delicate balance" of unionist and nationalist aspirations by undermining the east-west dynamic.

The controversial legislation announced on Tuesday is due in the "coming weeks", before the summer recess.

Ms Truss told the Commons the Bill will "ensure that goods moving and staying within the UK are freed of unnecessary bureaucracy".

"This respects Northern Ireland's place in the UK, in its customs territory, and protects the UK internal market," she said.

"At the same time it ensures that goods destined for the EU undergo the full checks and controls applied under EU law."

Labour accused the Government of "trying to convince people its flagship achievement was not a negotiating triumph but a deal so flawed that they cannot abide by it".

Shadow Foreign Office minister Stephen Doughty said: "Either they did not understand their own agreement, they were not upfront about the reality of it or they intended to break it all along.

"The Prime Minister negotiated this deal, signed it, ran an election campaign on it. He must take responsibility for it and make it work."

Philip Rycroft, who was the most senior civil servant at the Department for Exiting the European Union (DExEU) between 2017 and 2019, told BBC Newsnight the plans are "astonishing".

"That the UK Government, in a country which has always prided itself on the rule of law, should be contemplating unilaterally revoking elements of an international treaty which it signed up to only a couple of years ago is frankly extraordinary and worrying," he said.

Ms Truss said the new system will be underpinned by "data-sharing arrangements".

The UK has proposed a "trusted trader" scheme, whereby the EU would be provided with real time-commercial data, giving it confidence that goods intended for Northern Ireland are not entering the EU single market.

As well as customs paperwork, the Bill will remove regulatory barriers to goods made to UK standards being sold in Northern Ireland, she said.

She told MPs: "Businesses will be able to choose between meeting UK or EU standards in a new dual regulatory regime."

The Foreign Secretary said the legislation will also provide the Government with the ability to decide on tax and spend policies across the whole of the UK, and address issued related to governance.

She insisted the proposals to reform the deal were "consistent with our obligations in international law", and said the move was "not about scrapping the protocol", but delivering on its objectives.

Responding to the Foreign Secretary's plan, Mr Sefcovic said: "Should the UK decide to move ahead with a Bill disapplying constitutive elements of the protocol as announced today by the UK Government, the EU will need to respond with all measures at its disposal.

"Our overarching objective is to find joint solutions within the framework of the protocol.

"That is the way to ensure legal certainty and predictability for people and businesses in Northern Ireland.

"With political will and commitment, practical issues arising from the implementation of the protocol in Northern Ireland can be resolved.

"The European Commission stands ready to continue playing its part, as it has from the outset."

It is understood that the UK would pull the Bill in the event of all of its aims and objectives being met by the EU.

The option of invoking Article 16 will remain on the table.

More details are expected to be set out in the coming weeks.

Downing Street said it understood the EU's opposition to plans to bring forward the controversial legislation, but insisted action was needed.

The Prime Minister's official spokesman said: "We've been discussing this for around 18 months now, that's why the Foreign Secretary and the Prime Minister have taken the decision to move ahead with this twin-track process."

Ms Truss has invited Mr Sefcovic to a meeting of the withdrawal agreement joint committee in London to discuss the prospect of a "negotiated solution" as soon as possible.

Asked if a date had been set, the PM's spokesman said he was "not aware" one had been agreed.