The Economist about the effect of the revolution on business, Egypt

TUTANKHAMUN T-shirts are out; slogans celebrating Egypt’s democratic revolution are in. For 20 Egyptian pounds ($3.36), a vendor in Cairo’s Tahrir Square will sell you one showing a raised fist and the Facebook logo—a reminder of how the protesters used social media to overthrow President Hosni Mubarak.

Egypt has uncounted millions of small entrepreneurs. Most operate outside the law. Hernando de Soto, a Peruvian economist, once estimated that informal enterprises employ 40% more workers than all of Egypt’s legally registered companies put together. Throat-constricting red tape is the reason. Mr de Soto found that it took on average 500 days to register a small bakery in Egypt, or ten years to obtain legal title to a vacant plot of land. Small wonder most businessfolk opt to work without licences or legal protections. Few pay tax, either.

For obvious reasons, statistics on the informal economy are hard to come by. No one knows how many Egyptians have been put out of work since the uprising began in January. But it is clear that tourism, which provides one job in seven and 11% of GDP, has been badly dented. International arrivals were 35% lower in April this year than the previous April, according to the government. In the first quarter, the year-on-year drop was a calamitous 46%; this cost Egypt an estimated $2 billion.

In the summer, tourists from the Gulf usually flock to Egypt. This year their numbers are down, not least because the Gulf media—much of which are owned by princes—portray pro-democracy protests as terrifyingly bloody. Five-star hotels in Garden City, Cairo’s diplomatic area, have reduced their prices by 50% or more. Breaks in Sharm El Sheikh, a seaside resort that attracts more visitors than the pyramids, are also heavily discounted.

The gloom will not last forever. Egyptian tourism has been wounded before, most nastily in 1997, when terrorists killed and mutilated 58 holidaymakers in the Valley of the Kings. In that case, tourist numbers fell for about a year. This suggests that Egypt’s mix of cheap sunshine and 5,000 years of history will eventually lure back budget-conscious Europeans, who typically account for around two-thirds of visitors. In the short term, however, the loss of jobs is alarming. Some 700,000 young Egyptians enter the labour market each year. If they cannot find work, they may grow restless.