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Egypt's weak economy contributed to unrest


economy

Egypt's weak economy contributed to unrest

Egypt’s economy is struggling and that is seen by many as a big factor in the latest political upheaval.

Tourist numbers slumped when the anti-Mubarak revolution started and have not recovered.

There were 14 million visitors in 2010. This year it is forecast there will be 11.4 million.

Tourism is a major driver of the economy, accounting for one in seven jobs before the revolution, which explains why travel agent Walid El Batouty supports the protesters out on the streets.

He said: “My business has really been affected. My business was dying. We’re dead for three years. This government had many chances to give any sort of comfort. So, it’s a medication that we have to take. It’s going to be very sour, but we’re going to take it. And that’s why we’re out, and we’re going to be out. If it takes whatever it takes, what can we do? It’s for the sake of Egypt.”

Another catalyst for the protests is the fuel shortages over the last several weeks.

The Cairo government’s diminishing foreign reserves make it difficult to import fuel.

Talks on Iraq and Libya supplying oil collapsed last month because a lack of confidence in Egypt’s economy meant Baghdad would not accept Egyptian Central Bank payment guarantees.

The political uncertainty has investors, domestic and foreign very wary.

The sympathies of many in Egypt’s financial community are clear.

They believe that a change of government will mean an end to 30 months of instability that has frightened away the investors and tourists and drained the country’s finances, which is why they were waving anti-Mursi banners on the floor of the stock exchange on Wednesday.

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