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