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Egypt's Economy

In: Business and Management

Submitted By mustang386
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Until President Anwar Sadat came into power in 1970, Egypt’s economy was highly centralized. However, Sadat and the current president, Hosni Mubarak, aggressively pushed Egypt’s economy towards opening up to foreign and local private investment, in order to push up GDP growth. Under Mubarak, privatization continued and a tourism infrastructure was developed. By 2009, according to World Bank’s Doing Business Project, Egypt’s ranking in the ease of doing business had risen to 106 out of 183 countries, up from its 2008 ranking of 116, making it a World Bank “top ten reformer.” In addition, Egypt had made substantial progress in opening up its economy to global trade, with its rank in the Global Competitiveness Report 2009-2010, published by the World Economic Forum, moving up by 11 positions to 70 out of 133 countries. Despite its rise in the rankings, Egypt still has a relatively low level of openness, with exports/GDP at 25%. (Deutsche Bank, 9 Feb. 2010) As a result of its low level of integration with world markets, Egypt was not hit by the global recession to the extent that more “linked” economies were. However, this also means it is less likely to benefit from the recovery in global trade. Prior to the global recession, Egypt had hit its 7% official GDP growth target for 2 years in a row, with 2007 and 2008 growth at 7.1% and 7.2% respectively. This rate of growth had enabled it to reduce unemployment from 10.9% in 2005-06 to 8.1% in 2007-08. In 2008-09, however, unemployment rose to 8.8% and GDP growth slowed to 4.7%. (Figure 1) Although these numbers are not so bad compared to many Western countries, it could still potentially present some big issues for Egypt down the road because it is a country with a very young population. According to the World Bank, 32% of its population is between ages 0 and 14, 63% is between ages 15 and 64, and only 5% is…...

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