The underlying thesis of this paper is that, to achieve viable long-term high rates of economic growth and social development, the Arab non-oil countries must adhere to the basic principles of a modern economy. They have to develop those economic sectors that have strong competitive advantages with other markets. With accelerating globalization the competitive advantage has become even more important, particularly for the non-oil Arab countries. By examining the case of Egypt, the paper evaluates the extent to which tourism, as a service industry, can contribute to the improvement of these countries' economies. The non-oil economy of Egypt was chosen as a case study for two reasons: (a) from an economic point of view, Egypt has suffered most from the continuing Arab–Israeli conflict and (b) Egypt has the highest tourism potential in the entire Arab region. The results of the analysis show clearly that tourism can fit very well with Egypt's transformation into an economically well-developed non-oil country.
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