Download 2011 Egypt Crisis

The Crisis in Egypt
By
Rene Gonzalez
Jackson Cho
Contents
 Brief History
 Demographics
 Trade
 Economic Indicators
 Explanation of the Crisis in Egypt
 Possible Leaders and Governments
 IMF Recommendation
History
 Egypt's economy depends mainly on agriculture,
media, petroleum exports, and tourism
 Egypt has received U.S. foreign aid (since 1979, an
average of $2.2 billion per year), Mostly in Military.
 Corruption
 An estimated 2.7 million Egyptians abroad contribute
actively to the development of their country through
remittances (US$ 7.8 billion in 2009)
Demographics
 Population: 80,335,036 (90% Muslim)
 Literacy Rate:
71.4%
 Life Expectancy: 72 years
 School Life Expectancy: 11 years
 Education – 1 and 2% of GDP
 Second Largest Country
Egypt’s Trade
 Italy is Egypt's biggest trade partner.
 The U.S. is second
 Followed 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 Trade
Imports
 Egypt 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 Trade
Exports
 Oil 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 Deficit
 Egypt’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
Tourism
According to the New York Times,
 1 billion lost in revenue in 1 month
 Tourism 2nd largest source of revenue in Egypt
 Hotel occupancy decline from 70% filled to 5%
 Egypt Air is projected to lose 80% of revenue
 Grounded 40% of fleet
Problems Facing Egypt
 Ruling Party (Lack of Competition)
 Political Repression
 Crumbling Infrastructure
 Inflation (Poverty)
 Economic Challenges
Economic Indicators
 GDP growth
 Average of 4 to 6 % during 1995 to 2007
 GDP per Capita
 Nearly Doubled in 5 yrs
Egypt's per Capita GDP
Year
2005
2006
2007
2008
2009
GDP per Capita
1,162
1,367
1,630
1,997
2,270
Economic Indicators
 Unemployment
 About 40% of the population
is considered Poor
 Diminished Tourism
 Exports – Keynesian
Perspective
 Lack of Jobs
Egypt's Unemployment Rate
Year
Unemployment
1995
11.4
1996
9
1997
8.4
1998
8.2
1999
8.1
2000
9
2001
9.4
2002
10.2
2003
10.4
2004
10.7
2005
11.2
2006
10.6
2007
9
2008
8.7
2009
N/a
Economic Indicators
 Inflation
 Unstable
 Based solely on the dependency
of oil
 2008 – US Crisis
Egypt's Inflation
Year
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Inflation
15.7
7.2
4.6
3.9
3.1
2.7
2.3
2.7
4.5
11.3
4.9
7.6
9.3
18.3
11.8
Economic Indicators
 Government Spending
 Military

(Average of 10 to 12%)
 Subsidies


Health Expenditures
(Average of 7%)
 Education

(Average of 12 to 15%)
Egypt's Government Spending
Year
% of GDP
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
11
10
11
11
12
11
11
12
13
13
12
13
11
11
11
Quality of Life
 Number 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 spending
 Despite 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 Recommendations
IMF 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 Bank
 Main concern is to minimize Poverty in the country;
 Lower the distribution gap of wealth
 Increase Taxes to corporation
 Distribute those funds
 Incentives to Reinvest
2011 Egypt Crisis
 January 25
 Protest against decades of grievances by the
rule of Hosni Mobarak
 Police brutality
 Emergency law
 Freedom of speech
 Free election
 Minimum wage
 Price inflation for food
 Demand the end of Hosni Mobarak’s regime
New Leadership
 Preliminary election to be held in June
 Possible candidates
 AHMED SHAFIQ
 AMR MOUSSA
 MOHAMED ELBARADEI
 AYMAN NOUR
 OMAR SULEIMAN
 HAMDEEN SABAHI
 MOHAMMED BADIE
AHMED SHAFIQ
 Commander of Egypt's air force
 Minister for civil aviation
 Appointed as prime minister by Hosni Mubarak
 Credited for modernizing Egypt’s airports
 Part of the supreme council of the
armed forces that is in power now.
AMR MOUSSA
 Secretary-General of the Arab League
 Arab league is under the leadership of Hamas
 Member 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 SULEIMAN
 Chief of the Egyptian General Intelligence Service
(EGIS)
 Former vice president appointed by Mubarak during
the 2011 civil unrest.
HAMDEEN SABAHI
 Leader of the Karama party
 Elected to parliament in 2005
MOHAMMED BADIE
 Leader of Egyptians Muslims Brotherhood, biggest
opposition group in 2010.
 The brotherhood is ban in Egypt
 Badie was sentence to 15 years in jail in 1965
Revolutions in the Area
 Tunisia, Egypt, Algeria, Bahrain, Iran, Jordan, Libya,
Morocco, Yemen
 Tunisia and Egypt successfully overthrew their
government.
 Libya in the midst of a civil war
 Online Activism
 Facebook and Twitter
Democratization
 Can Egypt become democratic?
 Oil
 90% Muslim
 Homogeneous
 Education
 Wealth
 International connections
 Society institutions
References
 http://af.reuters.com/article/egyptNews/idAFLDE71N0VF2





0110301?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.ht
ml?_r=1&ref=egypt
http://topics.nytimes.com/top/news/international/countri
esandterritories/egypt/index.html
http://www.nytimes.com/2011/02/24/world/middleeast/24i
ht-m24late.html?ref=egypt
http://www.nytimes.com/2011/02/24/world/middleeast/24
protests.html?ref=egypt