Sibling rivalry

Aqaba and Eilat have a lot to learn mutually in the race to becoming the Red Sea's tourist capital.

By
September 25, 2007 11:41
aqaba feature 88 224

aqaba feature 88 224. (photo credit: Ariel Jerozolimski)

Strolling past the sand-colored chalets of Tala Bay, I couldn't help but think that in a few years Aqaba will turn into a major tourist destination on the Red Sea, competing with both Egypt and Israel. Is Eilat getting ready for the serious competition? 'Invest in Aqaba today and turn sand into gold," a beautiful girl, dressed in pale gold, tells CNN viewers around the globe as images of magnificent beaches, luxury hotels, airplanes taking off and Red Sea corals appear on the screen for almost 20 seconds. This commercial, ordered by ASEZA - the Aqaba Special Economic Zone Authority - has been running for almost a year on international and Arabic satellite channels. "Good things are happening to the Aqaba area these days," says Arwa Odeh, ASEZA's business development and marketing officer, as she welcomes me to its office, ready to introduce me to the wonders of Eilat's closest neighbor. But one doesn't need a tour to spot the transformation that Aqaba is undergoing. In addition to a giant Jordanian flag that can be seen from almost any place in Eilat, as can the massive cranes, the change is even more palpable when you walk around its once sleepy streets. Just a few years ago, this small town was merely a transfer point on the way to Petra and Wadi Rum, and only a few tourists would actually consider staying for more then an hour or a two. Some old-fashioned hotels and hostels were available, and two or three restaurants offered English menus, but Aqaba was not much of a bargain. All that is history now, I thought as I drove along the coast, scanning the billboards advertising the Radisson SAS, Kempinski and other international hotel chains and the yachts moored in the marina. "You are amazed now, but wait a couple of years, and then you'll be truly shocked. Aqaba is the Jordan of tomorrow," smiles Muhammad Balqar, ASEZA's deputy manager. The slide show prepared for visitors begins. There are water channels, mega-tourist complexes, golf courses, I-Max movie theaters, shopping malls and architecture resembling that of Dubai or Hong Kong. The coastline is about to be elongated by 17 km., the airport and seaport enlarged, main routes to the city improved and industrial parks built. "Our mission is to improve the quality of life for all community members, to create, regulate and sustain a globally competitive, investor-friendly environment, to effect a transparent and accountable corporate structure, governance and culture that synergizes the activities of the ASEZA team," explains Odeh, adding that along with Jordanian experts, many foreign specialists are working to turn Aqaba into the most beautiful resort on the Red Sea. The heads of ASEZA are reluctant, however, to use the example of Singapore, Hong Kong or Dubai. "Aqaba is Aqaba, and we want to underline its uniqueness and beauty" says Balqar. But when numbers are mentioned, the comparison with the rapid development of Dubai or Abu Dhabi is inevitable. During its seven years of existence, ASEZA has raised almost $12 billion in commitments from investors all over the world. While Balqar says Israeli businessmen haven't yet expressed interest, he stresses that ASEZA's doors are open for all. ASEZA can't complain about a lack of investors from Lebanon, the United Arab Emirates, Saudi Arabia and Jordan itself. The majority of the invested money - almost 60 percent - is directed at tourism and services, and the rest is divided between the special industrial zone (which includes electronics assembly, metal fabrication, construction material, food processing, logistics services and warehousing) and local infrastructure (port, airport and roads). The Jordanian press recently reported that the Aqaba Container Terminal (ACT) has become a direct port of call for the Maersk line. "ACT is proud to become a direct call for the famous Danish line, which is one of the top shipping companies in the world. This is clear evidence of the huge development and progress achieved by ACT during the past few years. It also helps to enhance the vital role of Aqaba's port as well as highlighting its prosperous growth," ACT CEO Patricio Junior said. THE REVIVAL of Jordan's only exit to the sea started seven years ago with the creation of the Aqaba Special Economic Zone. "ASEZ came as part of an initiative by King Abdullah. He established a royal committee to examine the feasibility and benefits of creating a special economic zone in Aqaba to act as a kind of an engine that would push forward the Jordanian economy," says Balqar, pointing at the picture of the king, a standard detail in any Jordanian office. In August 2000, the Aqaba Special Economic Zone Authority Law was passed by parliament. The law established ASEZA as the statutory institution empowered with regulatory, administrative, fiscal and economic responsibilities within the zone, a private sector-driven development initiative that maximizes private sector participation in a duty free, tax-advantaged and flexible regulatory environment providing a model approach to environmentally sustainable development and governance. Although most of the projects are currently in a state of development and will be completed in two to three years, such as Saraya Aqaba, "the city within the city," which will feature five hotels, a water park, a promenade and a huge convention center, a few are already in the final stages of construction. The construction work was still going on when I visited Tala Bay, another huge tourist complex. Most of the luxury apartments there have already been sold to those who can afford to spend a few million dollars for European perfection, Eastern splendor and a gorgeous view of the Red Sea. Located not far from the city center, Tala Bay includes 1,300 hotel rooms - at a hefty $200-$300 a night - a marina, night clubs, movie theater, water park, a golf course and many cafes, restaurants and shops. The complex is built to blend harmoniously blend with the sandy beaches and red mountains, and will also include cheaper hotels. Strolling past the sand-colored chalets of Tala Bay, I couldn't help but think that in a few years Aqaba will turn into a major tourist destination on the Red Sea, competing with both Egypt and Israel. Is Eilat getting ready for the serious competition? Samo Samorai, regional manager for cooperation between the cities, who closely follows developments across the border, warns that if Israeli authorities do not invest in Eilat, the city might not handle the contest with Aqaba. "The Jordanians are investing huge amounts of money into careful development of the area. Recently they began to promote Petra to be acknowledged as one of the seven wonders of the world, which will definitely attract lots of tourists. They also learn from our mistakes - they come to Eilat to learn about our experience in city planning, hotel management, etc. The king himself watches the progress of ASEZ closely," he says. "Today the flow of tourists to Eilat is still not endangered, since people want not only five-star hotels, but also security, convenient transportation, night life and modern services, especially when health issues are concerned. These things take time to develop. However, if we remain indifferent and nonchalant and don't pay attention to what is going on under our noses, we will definitely lose." He feels frustrated by the government's breaking its promises to Eilat, especially regarding investment opportunities and working conditions for possible investors. "ASEZ today is a duty-free zone, and the price rates are almost 30% lower than in Amman, whereas with each year there are less and less benefits in Eilat," he complains. Among the benefits that investors who come to Aqaba enjoy are exemptions from annual land and building taxes on utilized property, no foreign equity restrictions on investments, no foreign currency restrictions and exemption from taxes on distributed dividends and profits. Ideally, Eilat and Aqaba are meant to become close partners, since the two share joint security and environmental concerns - how to protect the corals, fight insects, make tourists feel safe. In December, a joint Aqaba-Eilat coordination committee met in Eilat and took a few important decisions designed to promote cooperation in tourism, environment and business, including a joint tourism strategy - arranging visits for tour operators from abroad for both destinations, exchange visits by Israeli and Jordanian tour operators, etc. However, good intentions alone won't achieve anything, says Samorai, who was directly involved in the work of the committee. "What does Eilat need today to succeed in this competition? First of all, strategic thinking. We cannot afford to think in the short term; what we need is to focus on the long term, our integration in the area. We need to do that to keep Eilat on the map," he says. The question of whether the twin cities are destined to become partners or rivals is yet to be answered; however, it's evident that Aqaba is waking up from its prolonged sleep to fight for its place in the sun. It has waited long enough, while Eilat and Sinai enjoyed the tourism boom, and it's not about to wait any longer.


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