Transcript Great Decisions 2009

Great Decisions 2009
Egypt in the 21st
Century
Egypt Economic Crisis
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A slowdown in the domestic economy
will exacerbate social discontent (which
has been fuelled by high prices for
staple goods during 2008), sparking
sporadic outbursts of unrest over the
next 10 year.
The government will continue to press
ahead with its program of economic
reform, aimed at raising living standards
and creating employment.
Egypt Economic Crisis
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A new fiscal stimulus package to boost
economic growth is likely to lead to a
severe deterioration of the public
finances in fiscal year 2008/09.
Deficit possibly will reach 7.5% of GDP
in 2008/09.
Expecting GDP growth of 5.1% in
2008/09 and 4.9% in 2009/10.
Egypt Economic Crisis
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The trade deficit will narrow in
2009-10 compared with 2008, as
falling commodity prices reduce
the import bill.
The current-account surplus is
therefore expected to widen over
the outlook period.
Egypt Economic Crisis
Key indicators
2008
2009
2010
2011
2012
2013
Real GDP growth (%)
7.2
5.1
4.9
5.9
6.3
6.4
Consumer price inflation (av; %)
18.4
9.5
4.6
6.1
4.9
4.5
Budget balance (% of GDP)
- 6.8
- 7.5
- 4.6
- 6.1
- 4.9
- 4.5
Current-account balance (% of GDP)
0.1
1.1
1.0
1.2
1.2
1.0
Commercial banks' lending rate
(av; %)
13.0
12.8
12.7
12.0
12.0
12.5
Exchange rate E£:US$ (av)
5.43
5.59
5.62
5.67
5.65
5.65
Egypt Economic Crisis
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Social tensions are likely to remain high
in the near term, with sporadic
demonstrations and other forms of
social unrest.
High inflation during 2008 has
undermined consumers' purchasing
power and, with few democratic
avenues to vent their anger, Egyptians
are likely to take to the streets in
increasing numbers.
Political Reality in Egypt

Presidential election, Sep 2005
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Hosni Mubarak (National
Democratic Party) 89.0 %
Ayman Nour (al-Ghad) 7.6 %

Noaman Gomaa (New Wafd) 2.9 %

Political Reality in Egypt
The president, Hosni Mubarak, will
ensure that political control is
relinquished only gradually, if at all.
 The regime's firm grip on the levers
of power, which leaves little space
for democratic expression, is likely
to further intensify public anger.

Political Reality in Egypt
Uncertainty continues to
surround the outlook for the
succession to the president.
 President Mubarak is expected to
attempt to engineer the
succession of his second son,
Gamal, through constitutional
channels.
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Political Reality in Egypt
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A raft of 34 amendments to the
constitution was passed in a
referendum in late March 2007,
making it virtually impossible for
opposition parties, including the
banned Muslim Brotherhood, to gain
a political foothold.
Political Reality in Egypt
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As yet no such person has developed
the kind of public profile that might be
expected of a likely contender.
However, it remains unclear how the
military establishment that underpins
the regime would view the prospect of
a president without a military
background (whether Gamal or
someone else).
Political Reality in Egypt

Although most Egyptians
appear resigned to the
fact that Gamal will
succeed his father, there
is considerable
resentment over what is
seen as an attempt to
introduce hereditary
succession through the
back door, and this could
lead to large-scale
demonstrations.