Egypt: Economic and Political Outline

Economic Overview

The Egyptian economy has shown resilience to the global financial crisis and a 6% growth was expected for 2011. However, because of the political crisis and revolutionary upheaval, growth evetually reached only 1.2% in 2011.

Since the political crisis that led to the downfall of the regime of Hosni Mubarak, Egypt has entered a period of uncertainty and the future direction of economic policy is unclear. Stabilizing the economy remains a priority. The budget deficit (11% of GDP) worsened as a result of declining tax revenues, rising food prices and oil prices (subsidized) and the weight of debt service, as well as the deficit of the balance of payments. The 2011-2012 budget, voted in June 2011, reflects an expansionary policy and provides measures to reduce social inequalities. At the cost of drastic cuts in the country's foreign exchange reserves, the Supreme Council of the armed forces who temporarily governs the country decided on a wage increase for civil servants, setting a minimum income in the private sector and maintaing energy subsidies. The economic and political situation has lead the rating agency Standard & Poor's to lower Egypt's rating. Despite strong opposition, the country could negotiate a loan agreement with the IMF.

The social situation is worrying. The official unemployment rate is close to 12%, 75% of all employees work in black and 18% of the population lives below the poverty line.

Main Sectors of Industry

Agriculture contributes around 13% of the GDP and employs about a third of the active population. The warm climate and the abundant Nile water allows for several annual harvests. The main crops are cereals, cotton, sugar cane and beets.

Egypts remains a country with little industry. With its diverse natural reserves (gold, minerals, iron, oil and gas), oil and gas-related activities and the secondary sector account for just over a third of the GDP. Egypt is the world’s sixth largest exporter of natural gas.

Finally, the tertiary sector represents around 50 % of the Egyptian GDP. It is largely dominated by revenues from telecommunications (which grew by 11% during the first quarter of 2010) and from tourism (the tourist industry brings about 11b in annual revenues. For example Cairo received 14m of visitors in 2010).

In spite of its economy’s diversification, the country still depends for a large part of its income on the Suez Canal.

Source: World Bank - Last Available Data.

Indicator of Economic Freedom

Score:

59.1/100

Position:

Mostly unfree

World Rank:

92/179

Regional Rank:

11/17

Distribution of Economic freedom in the world
Source: 2011 Index of Economic freedom, Heritage Foundation

Note: The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Sources of General Economic Information

Ministries

Ministry of Finance
Ministry of Trade and Industry 

Statistical Office

Central Agency for Public Mobilization and Statistics.

Central Bank

Central Bank

Stock Exchange

Cairo and Alexandria Stock Exchange

Other Useful Resources

Website containing official information of the government

Main Online Newspapers

Al-Ahram Weekly
Cairo Times
The Daily News Egypt

Economic Portals

Zawya: website containing economic information on the Middle East.
Alibaba: Economic portal on the Middle East.

Political Outline

Type of State

Republic based on the constitution of 1971 revised in 2005. The state has a presidential system of government.

Executive Power

The president is the head of state. He is elected by universal suffrage for a 6-year term of office (no limit for extension). He appoints the Prime Minister who must be approved by a confidence vote in the parliament. The President also appoints the head of the Council of Ministers. He can dissolve the Assembly and rule by decree. He holds almost total power.

Legislative Power

The legislative power is bicameral. The Parliament is formed by the People's Assembly (the lower house) which has 454 members (of which 444 are elected by universal suffrage and 10 are nominated by the President for a 5-year term) and the Advisory Council (the upper house) which plays only an advisory role and which has 264 members (of which 176 are elected by universal suffrage and 88 appointed by the president for a 6-year term). The president can dissolve the People's Assembly only if he has the support of the people during a referendum.

Main Political Parties

The multi-party system was restored in 1976 by the then president Sadate. However, in practice it is the ruling National Democratic Party (NDP) which completely dominates the political arena. The Muslim brothers, a brotherhood created in 1928 by Hassan El Banna is the main opposition party of the country. They were banned but in spite of it, they were able to win 88 seats in the People's Assembly in the 2005 elections. The other opposition parties like Wafd, El-Ghad or the Nasserian Party are minority parties and were nearly wiped out in the 2005 elections.

Current Political Leaders

Vice-President: Vacant (constitution suspended since 13 February 2011)
Prime Minister: Kamal Ganzouri (since 24 November 2011)

Next Election Dates

Presidential elections: May 2012

Indicator of Freedom of the Press

World Rank:

166/179

Evolution:

39 places down compared to 2010

Source: Worldwide Press Freedom Index 2011, Reporters Without Borders

Note: The world rankings, published annually, measures the violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position is assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire sent to partner organizations,150 RWB correspondents, journalists, researchers, jurists and activists of human rights, including the main criteria - 44 in total - to assess the situation of press freedom in a given country. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).