Economy

Main article: Economy of Egypt

Egypt's economy depends mainly on agriculture, media, petroleum exports, and tourism; there are also more than three million Egyptians working abroad, mainly in Saudi Arabia, the Persian Gulf and Europe. The completion of the Aswan High Dam in 1971 and the resultant Lake Nasser have altered the time-honored place of the Nile River in the agriculture and ecology of Egypt.

A rapidly-growing population, limited arable land, and dependence on the Nile all continue to overtax resources and stress the economy.Lions guard the Kasr-el-Nil Bridge Cairo, Egypt The government has struggled to prepare the economy for the new millennium through economic reform and massive investments in communications and physical infrastructure.

Egypt has been receiving U.S. foreign aid (since 1979, an average of $2.2 billion per year) and is the third-largest recipient of such funds from the United States following the Iraq war. Its main revenues however come from tourism as well as traffic that goes through the Suez Canal.Egypt has a developed energy market based on coal, oil, natural gas, and hydro power. Substantial coal deposits are in the north-east Sinai, and are mined at the rate of about 600,000t per year. Oil and gas are produced in the western desert regions, the Gulf of Suez, and the Nile Delta. Egypt has huge reserves of gas, estimated at over 1.1 million cubic meters in the 1990's, and LNG is exported to many countries.Economic conditions have started to improve considerably after a period of stagnation from the adoption of more liberal economic policies by the government, as well as increased revenues from tourism and a booming stock market. In its annual report, the IMF has rated Egypt as one of the top countries in the world undertaking economic reforms. Some of the major steps concerning economic reforms taken by the new government since 2003 include a dramatic slashing of customs and tariffs, a new taxation law implemented in 2005 that decreases corporate taxes from 40% to the current 20%, resulted to the stated 100% increase in tax revenue by the year 2006.

FDI (Foreign Direct Investment) into Egypt has increased considerably in the past few years due to the recent economic liberalization measures taken by ministery of investment Mahmoud Mohieddin, exceeding $6 billion in 2006.

  

Egypt is slated to overcome South Africa as the highest earner of FDI on the African continent in 2007.

Although one of the main obstacles still facing the Egyptian economy is the trickle down of the wealth to the average population, many Egyptians criticize their government for higher prices of basic goods while their standards of living or purchasing power remains relatively stagnant. Often corruption is blamed by Egyptians as the major impediment of not feeling the benefits of the newly attained wealth. Although major reconstruction of the infrastructure in the country is promised by the government, with a large portion of the sum paid for the newly acquired 3rd mobile license ($3billion) by Etisalat, slated to be pumped into the country's railroad system after public outrage against the government for recent disasters that took place in 2006 claimed more than 100 lives.The most well known examples of Egyptian companies that have expanded regionally and globally are the Orascom Group and Raya.

The IT sector has been expanding rapidly in the past few years, with many new start-ups conducting outsourcing business to North America and Europe, operating with companies such as Microsoft, Oracle and other major corporations, as well as numerous SME's. Some of these companies are the Xceed Contact Center, Raya Contact Center, E Group Connections and C3 along with other start ups in that country.

The sector has been stimulated by new Egyptian entrepreneurs trying to capitalize on their country's huge potential in the sector, as well as constant government encouragement.

Source: Wikipedia