Under siege

A decree levying exorbitant duties on imported garments has triggered a confrontation between Port Said traders and the government. Gihan Shahine visits the angry city
It is 11.00am on a Monday in Port Said and the usually bustling market -- once the haunt of bargain-hunters nationwide -- is a ghost town. An unmistakable gloom hangs over the market, identified in Egyptian minds with its duty-free zone status, and the malaise is palpable in every corner. The government's unprecedented new tariff, levied on imported garments as of 1 January, has exacted a heavy toll.
Two weeks ago Al-Hai Al-Togari (the commercial market) was brimming with avid shoppers, but today it is desolate. Most shops are closed, but the few that are still open are populated solely by depressed traders and salesmen peering soulfully at piles of unsold merchandise.
The rain is heavy, but it is obvious that it is not the weather that is keeping the shoppers away. A staggering 500 per cent rise on customs tariffs has kept any potential customers -- usually visitors from other parts of Egypt -- home. The scene has remained unchanged for more than a week and any hopes of business picking up around the Coptic Christmas were simply foolhardy.
Instead of shoppers, security forces patrol every inch of the city, inducing fear among shop owners. Police have arrested some 140 people following furious demonstrations by traders protesting the new tariffs -- the second time in less than a week. Rioting turned violent on Sunday, when protesters turned their anger on public property.
The clash between Port Said's inhabitants and the government erupted on 1 January, when a cabinet decree imposing the tariffs on imported clothes was unexpectedly set in force. The decree, aimed at safeguarding the local garment and textile industry against the influx of cheaper counterparts from Far Eastern countries, is applicable to all airports and marine ports nationwide.
Throughout the country, there is strong public resentment and much confusion over the decree. But it is specifically in Port Said that the decision, which was kept under wraps until the new year, has dealt a serious blow to the city's commercial activities. The decree in effect rescinds Port Said's status as a duty-free zone. Although this claim remains disputed, there is no doubt that the decree strips Port Said of its attraction as a place where shoppers willing to go the extra mile can find bargain prices on foreign merchandise.
Many have been shocked at what they call "exaggerated" tariffs, which are levied irrespective of the price of the item. Women's dresses will incur an LE1,400 tariff; skirts, LE250 and scarves, LE80. Suits will take an extra LE1,000 for men, LE1,400 for women and LE800 for kids. Jackets will cost an extra LE800 for men and LE1,400 for women.
The city was turned into a free zone in 1976 by a presidential decree, mainly to help build a livelihood for the town's inhabitants -- believed to be the most afflicted by the 1967 war. Since then, according to government statistics, trading in imported clothes has constituted at least 75 per cent of the city's economic activities. Unofficial estimates, however, put the figure as high as 90 per cent of all commercial activities in the city.
Dumbfounded shoppers from out of town found themselves turning around at the gates last week when confronted with the new tariffs, which were imposed without any prior notification. The purchases were promptly returned and the visitors quickly disappeared. Traders immediately rose up, launching angry demonstrations and a three-day strike in which all shops were closed.
To subdue the public outcry, President Hosni Mubarak announced on 4 January that Port Said will remain a duty-free zone for another five years, explaining that its share of imports would be gradually reduced over that time to allow traders to change course in their business activities. Meanwhile, the government said that it would allow visitors to buy six tariff- free items of clothing once every year, but the exemption does not apply to children's garments. Visits will be logged into a computer database to track visitors' use of the privilege.
The government's statement initially triggered a sigh of relief among the city's traders, but they soon decided that they had been fooled into accepting very few concessions. More fierce demonstrations erupted on Sunday, again closing shops. Having depended on trade for their livelihoods for more than a decade, most Port Said residents are at a loss for what they will do after the five-year grace period has expired.
"The city is burning," groans Abdel-Hai Dessouqi, a trader at the commercial market. "They have practically killed our only source of livelihood. Now I'm trading in Egyptian-made clothes, as that's what the government wants. Of course, I don't have a single customer."
Dessouqi is not alone. Many traders told Al- Ahram Weekly similar stories of despondence. Many inhabitants have no other source of income and have already invested all their money in their stocks of goods that are no longer marketable. Street vendors depending on day-to-day sales are suffering the most, while shop staff are worrying about what they see as their imminent dismissals. Shopping trips are being cancelled, extending the problem to affect bus companies, restaurants and hotels. Inhabitants claim that theft is already on the rise.
"We are under siege," shouted one trader, who asked that his name be withheld. Many nodded in earnest agreement. "We don't have local, or even international visitors to sell these unsold stocks to," he said. "We don't have any other source of income. We cannot speak out and the press is not supportive. I graduated 15 years ago and have not yet found a decent job. I applied at every single place in Port Said, but to no avail. There are no job opportunities here except trade. Now that the government is cutting that off too, it should realise that unemployment, terror and crime will proliferate."
Many traders complain that at the very least, the government should have informed them of the decree beforehand. But Port Said Governor Mustafa Kamel retorts that prior notification was simply not prudent due to security considerations. He noted that the timing of the decree was the most suitable, since it came after the traditionally heavy shopping period around the Eid. In fact, this year was an especially good sales season for the city.
For Kamel, public ire in Port Said is no longer founded given the latest modifications to the tariff decree. "Port Said will remain a free market for five years. During this time, the government will be creating new job opportunities through its comprehensive development plans for the city," Kamel explained. These plans include establishing a new port on the eastern side of the Suez Canal, increasing the city's output of natural gas, building two large factory complexes, creating an agricultural community on 135,000 feddans of arable land and boosting tourism.
But what will traders do until these projects are completed? Kamel dismisses claims that the market has been devastated by the new tariffs. "Traders will continue their normal course of business -- selling imported clothes," he told the Weekly. "The six tariff-free items will be enough to bring customers back to the city. No one would buy more than six items and we plan to extend this privilege to twice a year."
Asked why traders were up in arms, then, Kamel replied that demonstrators "did not exceed 3,000 individuals, most of whom were smugglers." He added, confidently: "Honestly, I see no reason why traders should be upset. The market is usually slow at this time of the year, after the feast. Students are having their end-of- term exams and the weather is rainy. No one would think of visiting Port Said now."
Even if 3,000 traders are "slightly affected" in the immediate future, insists Kamel, national interest should always come first. "The decree is mainly intended to save the local garment and textile industry and its three million labourers by reducing imports," he explained. The catch, however, is that only 2.5 per cent of Egypt's imports enter through Port Said, according to official figures by the Central Bank.
Port Said MP Akram El-Shaer is not optimistic. "The decree has undoubtedly killed this city," El-Shaer maintains. "Most of the companies that opened here do not employ local residents and land is too salty and inappropriate for agriculture. Thousands of people will suffer."
Customers are no less infuriated by the new tariffs, which is even affecting travellers and tourists carrying foreign-made goods. Regular travellers will not be allowed more than six items of clothes for personal use when entering the country. "This is a farce," complains Egyptian national Tareq Saleh, who lives in England and returns to Egypt regularly for visits that extend more than a month. "How can I bring only six items for a long vacation? How can I be charged thousands of pounds for my own clothes and those of my wife and daughter? This is completely unacceptable."
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