News / Middle East

Political Conflict Hurts Egyptian Economy

Political Conflict Hurts Egyptian Economyi
X
December 26, 2012 5:23 PM
The political turmoil in Egypt since the revolution nearly two years ago has put its economy into decline, and experts say the country faces more tough economic times as the cycle of elections and protests continues. VOA's Al Pessin reports from Cairo.
Political Conflict Hurts Egyptian Economy
Al Pessin
Egypt's President Mohamed Morsi on Wednesday vowed his government will tackle pressing economic problems mainly brought on by nearly two years of political turmoil and social upheaval. Experts say the country faces more tough economic times as the cycle of elections and protests continues.

On many Cairo shopping streets, it's hard to tell there's an economic crisis. At a women's clothing store, however, manager Abdel Aziz Mohammed can see the impact.

“It's normal anywhere that you get affected by the country's circumstances. As long as there is tension in the country, there's not much business. When the situation returns to normal, there will be nothing to worry about,” said Mohammed.

In the last two years, prices of various items are up, and so is unemployment. And with the poverty rate rising from 20% to 25%, businesses are feeling the pinch.

Developments in Egypt

  • Nov. 22: Presidential decree gives Mohamed Morsi sweeping powers, protests erupt
  • Nov. 30: Islamist-controlled assembly adopts draft constitution
  • Dec. 1: Constitution referendum scheduled for December 15
  • Dec. 2: Judges say they will boycott constitution referendum
  • Dec. 5: Protesters clash outside presidential palace in Cairo
  • Dec. 8: Morsi annuls presidential decree
  • Dec. 10: Morsi gives military authority to arrest civilians
  • Dec. 15/22: Egyptians vote on constitutional referendum
At the same time, foreign investment and tourism are down, and the government's foreign currency reserves have been cut in half.

“The economy is a victim of the political transition," said Political Economics Professor Ashraf Mishrif at London's King's College. "We have seen the economy is actually suffering significantly from the uprising, the protests over the last two years.”

Mishrif, himself an Egyptian, is not surprised that two years of political protests and uncertainty have hurt foreign investment.

“The high political risk associated with the transition has really impacted negatively and led to disinvestment in the country. Some of the companies actually tried to find more a stable market to invest their capital in,” he said.

In the current political atmosphere, Egypt's new leaders have struggled to turn the economy around, announcing and then canceling tax and price increases, and postponing a crucial International Monetary Fund loan because they can't meet the conditions.

At the Egypt World Trade Organization Institute, a trade and investment promotion company, manager Mohammed Hesham said he believes the economy will bounce back once the political situation stabilizes.

“The government has to take care of the economic side. It must. The people want economic stability and fast growth and they need a lot of jobs. This is the main duty for this government and this president.”

He acknowledged, though, that would require an easing of the tension and protests that have become a regular feature in Egypt during the last two years. The mainly Islamist supporters of the new constitution hope it will bring some stability, but the opposition has vowed to keep up the pressure on the streets as parliamentary elections approach, fearing the country will become too religiously conservative. Experts say that will make it difficult for the government to take unpopular steps on the economy, and likely will delay any recovery.

You May Like

Video Analysts: Beijing Parade a 'Bazaar' of Stolen Technology

Show commemorating victory over Japan in World War II involved long, medium and short range missiles, a range of tanks and 200 fighter aircraft More

Bernie Sanders Surge Reflects US Shift on Socialism

Although most analysts say it is unlikely he will get the Democratic nomination, Sanders' campaign opens up questions and issues that are otherwise marginalized More

Video On IS Frontline, Kurdish Fighters Ready for Offensive

Peshmerga soldiers say although they need more heavy artillery, they are poised to take the fight to the Islamic State extremists on their turf More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Drowned Migrant Toddler Photo Triggers European Outragei
X
Henry Ridgwell
September 04, 2015 11:36 AM
The harrowing picture of a drowned three-year-old Syrian boy washed up on a Turkish beach appears to have galvanized Europe’s leaders into doing more to address the refugee crisis. France, Germany and Italy issued a joint call Thursday for compulsory quotas of refugees for all EU states. But there were chaotic scenes in Hungary as police tried to force migrants off a train heading for Austria. Henry Ridgwell has more. And a caution, some of the images in this report may be disturbing.
Video

Video Drowned Migrant Toddler Photo Triggers European Outrage

The harrowing picture of a drowned three-year-old Syrian boy washed up on a Turkish beach appears to have galvanized Europe’s leaders into doing more to address the refugee crisis. France, Germany and Italy issued a joint call Thursday for compulsory quotas of refugees for all EU states. But there were chaotic scenes in Hungary as police tried to force migrants off a train heading for Austria. Henry Ridgwell has more. And a caution, some of the images in this report may be disturbing.
Video

Video Russians Observe 11th Anniversary of Beslan School Attack

This week, Russians have been observing the 11th anniversary of the attack by Islamic militants on a school in Russia's North Caucasus region that killed more than 330 hostages, including 186 children. The three-day siege and massacre that started on September 1, 2004 took place in Beslan, a town in the republic of North Ossetia, and is one of the bloodiest terrorist acts ever in Russia. VOA's Mike Richman reports.
Video

Video Native Americans Debate: Father Serra, Saint or Sinner?

Pope Francis will canonize an 18th century missionary to Spanish California during a papal visit to the United States this month.  But some Native Americans have criticized the elevation to sainthood of the missionary priest, Junipero Serra. VOA's Mike O’Sullivan has more from Los Angeles.
Video

Video Calais School Offers Another Face of Europe’s Migrant Crisis

Europe is facing mounting criticism over how it’s handling its biggest migration crisis since World War II. But not all Europeans believe building walls or passing repressive policies are the answer. A school for migrants in the French port city of Calais, is opening doors and building bonds across nationalities. VOA's Lisa Bryant reports.
Video

Video Kurdish Fighters on IS Frontline Ready for Offensive

Finger on the trigger, the Kurdish Peshmerga soldier stared across the dust at a village taken over by Islamic State extremists. The Kurdistan’s Khazir frontline, just 45 minutes from the Islamic State stronghold of Mosul. And at this point, the militants were less than two kilometers away. VOA's Sharon Behn reports.
Video

Video China Announces Troop Cuts at WWII Parade

Chinese President Xi Jinping Thursday announced plans to cut the world’s largest military force by 300,000 troops. The announcement was made during a massive military parade to commemorate victory over Japan in World War II. The event was shunned by most Western leaders and for some is raising fresh concerns about China’s military ambitions. VOA’s Bill Ide has more from Beijing.
Video

Video Russia-Japan Relations Cool as Putin Visits China for WWII Anniversary

Russian President Vladimir Putin is in Beijing for commemorations of the 70th anniversary of China's WWII victory over Japan. Putin is expected to visit Japan later this year, but tensions between Tokyo and Moscow over islands disputed since the war, and sanctions over Ukraine, could pour cold water on the plan. VOA's Daniel Schearf reports.
Video

Video Yemen ‘on Brink of Disaster’ as Medical Shortages Soar

Aid agencies warn Yemen is on the brink of humanitarian disaster – with up to half a million children facing severe malnutrition, and hospitals running out of basic medicines. There are fears Yemen's civil war could escalate as the coalition led by Saudi Arabia tries to drive back Houthi rebels, who seized control of much of the country earlier this year. Henry Ridgwell reports.
Video

Video Apps Helping Kenyan Businesses Stay Ahead of Counterfeiters

Counterfeit goods in Kenya cost the government as much as $1 billion each year in lost tax revenues. The fake goods also hurt entrepreneurs who find it hard to carve out a niche in the market and retain customers. But as Lenny Ruvaga reports from Nairobi, information technology is being used to try to beat the problem.
Video

Video Nobel Prize Winner Malala Talks to VOA

Nobel Peace Prize winner Malala Yousafzai met with VOA's Deewa service in Washington Sunday to talk about women’s rights and unveil a trailer for her new documentary. VOA's Katherine Gypson has more.
Video

Video War, Drought Threaten Iraq's Marshlands

Iraq's southern wetlands are in crisis. These areas are the spawning ground for Gulf fisheries, a resting place for migrating wildfowl, and source of livelihood for fishermen and herders. Faith Lapidus has more.
Video

Video Colombians Flee Venezuela as Border Crisis Escalates

Hundreds of Colombians have fled Venezuela since last week, amid an escalating border crisis between the two countries. Last week, Venezuelan President Nicolas Maduro ordered the closure of a key border crossing after smugglers injured three Venezuelan soldiers and a civilian. The president also ordered the deportation of Colombians who are in Venezuela illegally. Zlatica Hoke reports.
Video

Video Rebuilding New Orleans' Music Scene

Ten years after Hurricane Katrina inundated New Orleans, threatening to wash away its vibrant musical heritage along with its neighborhoods, the beat goes on. As Bronwyn Benito and Faith Lapidus report, a Musicians' Village is preserving the city's unique sound.
Video

Video In Russia, Auto Industry in Tailspin

Industry insiders say country relies too heavily on imports as inflation cuts too many consumers out of the market. Daniel Schearf has more from Moscow.
Video

Video Scientist Calls Use of Fetal Tissue in Medical Research Essential

An anti-abortion group responsible for secret recordings of workers at a women's health care organization claims the workers shown are offering baby parts for sale, a charge the organization strongly denies. While the selling of fetal tissue is against the law in the United States, abortion and the use of donated fetal tissue for medical research are both legal. VOA’s Julie Taboh reports.

VOA Blogs