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Thu 5 Jun 2014 11:56 AM

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Egypt aims to raise $1bn through investment fund to support tourism

Three years of violence, and political instability that have decimated the sector

Egypt aims to raise $1bn through investment fund to support tourism
Egypts tourism minister Hisham Zaazou.

Egypt hopes to raise $1bn through an investment fund to support its tourism sector, tourism minister Hisham Zaazou said on Wednesday, after more than three years of violence, and political instability that have decimated the sector.

A roadshow was likely to start in July with Gulf Arab states, he said, which have already given billions of dollars in aid to Egypt. The fund is expected to raise $250m by next quarter and the remaining amount within a year.

Violence, which flared when Hosni Mubarak was deposed in 2011, has intensified since the army ousted the country's first elected president in July. That has further depressed interest from tourists and foreign investors.

More than 14.7m tourists visited Egypt in 2010, dropping to 9.8m after the revolution that toppled Mubarak. The sector picked up in 2012, attracting 11.5m but shrank again to 9.5m last year after various attacks on tourist destinations.

Two South Korea tourists were killed in February when a bomb hit their bus in South Sinai near the Israeli border.

Egypt is under increasing pressure to find sources of revenue to cover its budget deficit which swelled to 14 percent last year. Its foreign reserves dipped to a critical low last year and its tourism revenue dropped by 43 percent to $1.3bn in the first quarter of this fiscal year.

Former army chief Abdel Fattah Al Sisi, will be sworn in as president on Thursday after he won more than 90 percent of the vote this month. A low turnout threatens to deprive him of the strong mandate he needs to fix the economy.