The Crisis in Egypt
By
Rene GonzalezJackson Cho
ContentsBrief HistoryDemographicsTradeEconomic IndicatorsExplanation of the Crisis in EgyptPossible Leaders and GovernmentsIMF Recommendation
HistoryEgypt's economy depends mainly on
agriculture, media, petroleum exports, and tourism
Egypt has received U.S. foreign aid (since 1979, an average of $2.2 billion per year), Mostly in Military.
CorruptionAn estimated 2.7 million Egyptians abroad
contribute actively to the development of their country through remittances (US$ 7.8 billion in 2009)
DemographicsPopulation: 80,335,036 (90% Muslim)Literacy Rate: 71.4%Life Expectancy: 72 yearsSchool Life Expectancy: 11 years
Education – 1 and 2% of GDP
Second Largest Country
Egypt’s TradeItaly is Egypt's biggest trade partner.The U.S. is secondFollowed by several European countries and
India. Almost 40 percent of Egypt's exports are
bought by European Union countries.
Have held a trade deficits for many years.
Egypt’s TradeImportsEgypt does not have a large industrial base and
therefore imports almost all of their capital goods such as machinery and equipment. Food represents about 20 percent of Egypt's
imports, industrial chemicals, wood products and refined fuels are also imported in significant
quantities
Egypt imported $56.2 billion worth of goods in 2009
Egypt’s TradeExportsOil was by far the largest export at over
155,000 barrels a day. Egypt also exports a number of metal products
(industrial and finished), cotton, textiles and chemicals Egypt's 2010 exports are expected to drop by
18 percent to just under $25 billion due to the worldwide recession and drop in oil prices.
Egypt exported over $29 billion dollars worth of products in 2009.
Trade DeficitEgypt’s trade deficit widened 42.6 percent in
2010 demand of imports for consumption and
investment, depreciation of the Egyptian pound and higher international prices of basic items
such as food.Labor Abundant Country
Capital goods - Infrastructure
Has Held Trade Deficits For over 5 Decades
TourismAccording to the New York Times,
1 billion lost in revenue in 1 monthTourism 2nd largest source of revenue in
EgyptHotel occupancy decline from 70% filled to
5%Egypt Air is projected to lose 80% of revenue
Grounded 40% of fleet
Problems Facing EgyptRuling Party (Lack of Competition)Political RepressionCrumbling InfrastructureInflation (Poverty)Economic Challenges
Economic IndicatorsGDP growth
Average of 4 to 6 % during 1995 to 2007
GDP per CapitaNearly Doubled in 5 yrs
Economic IndicatorsUnemployment
About 40% of the populationis considered Poor
Diminished TourismExports – Keynesian
PerspectiveLack of Jobs
Economic IndicatorsInflation
UnstableBased solely on the dependency
of oil2008 – US Crisis
Economic IndicatorsGovernment Spending
Military (Average of 10 to 12%)
Subsidies Health Expenditures (Average of 7%)
Education (Average of 12 to 15%)
Quality of LifeNumber of Tertiary Institutions:
107 (2005/06) Tertiary Enrollment:
2,153,865 (2004)Adult Literacy - Percent of Ages 15+:
55.6 (2003)Female Literacy as a Percent of Male:
65 (2003)Net Secondary Enrollment Ratio Percent:
81 (2002/03) Infant Mortality Rate Per 1,000 Live Births:
33 (2003) GINI Index:
34.4 (2005)
IMF Recommendations
The IMF is still prescribing pro-cyclical policies that constrain public spendingDespite pledges to address the crisis in flexible
and innovative ways, the IMF’s key objective in crisis loans remains “macroeconomic stability” through the “tightening of monetary and fiscal policies.”
IMF RecommendationsIMF crisis loans have required policies
such as:lowering fiscal deficits and inflation levels;buffering international reserves;reducing or restraining public spending;increasing official interest rates or restraining the
growth of the money supply;preventing currency depreciation;providing financial sector liquidity where needed.
World BankMain concern is to minimize Poverty in the
country;
Lower the distribution gap of wealthIncrease Taxes to corporationDistribute those fundsIncentives to Reinvest
2011 Egypt CrisisJanuary 25Protest against decades of grievances
by the rule of Hosni MobarakPolice brutalityEmergency lawFreedom of speechFree electionMinimum wagePrice inflation for food
Demand the end of Hosni Mobarak’s regime
New LeadershipPreliminary election to be held in
JunePossible candidates
AHMED SHAFIQAMR MOUSSAMOHAMED ELBARADEIAYMAN NOUROMAR SULEIMANHAMDEEN SABAHIMOHAMMED BADIE
AHMED SHAFIQCommander of Egypt's air forceMinister for civil aviationAppointed as prime minister by Hosni
MubarakCredited for modernizing Egypt’s airportsPart of the supreme council of the
armed forces that is in power now.
AMR MOUSSASecretary-General of the Arab League
Arab league is under the leadership of HamasMember of the UN high level panel on
threats
MOHAMED ELBARADEI
Former head of the International Atomic Energy Agency (IAEA)
A joint recipient of the 2005 Nobel Peace Prize
Critic of the Mubarak administration
AYMAN NOUR
Former member of the Egyptian Parliament Chairman of the El Ghad party.Imprisoned by Mobarak in 2005
OMAR SULEIMANChief of the Egyptian General Intelligence
Service (EGIS)Former vice president appointed by Mubarak
during the 2011 civil unrest.
HAMDEEN SABAHILeader of the Karama partyElected to parliament in 2005
MOHAMMED BADIELeader of Egyptians Muslims Brotherhood,
biggest opposition group in 2010.The brotherhood is ban in EgyptBadie was sentence to 15 years in jail in 1965
Revolutions in the AreaTunisia, Egypt, Algeria, Bahrain, Iran, Jordan,
Libya, Morocco, YemenTunisia and Egypt successfully overthrew
their government.Libya in the midst of a civil warOnline Activism
Facebook and Twitter
DemocratizationCan Egypt become democratic?
Oil90% MuslimHomogeneousEducationWealthInternational connectionsSociety institutions
Referenceshttp://af.reuters.com/article/egyptNews/
idAFLDE71N0VF20110301?pageNumber=4&virtualBrandChannel=0
http://economix.blogs.nytimes.com/2011/02/23/economics-and-democracy-in-egypt/?ref=egypt
http://www.nytimes.com/2011/02/27/opinion/27kristof.html?_r=1&ref=egypt
http://topics.nytimes.com/top/news/international/countriesandterritories/egypt/index.html
http://www.nytimes.com/2011/02/24/world/middleeast/24iht-m24late.html?ref=egypt
http://www.nytimes.com/2011/02/24/world/middleeast/24protests.html?ref=egypt