Egypt Case Study

Introduction

Case Summary

The Egypt Revolution scenario explores the present Egyptian revolution especially the financial and political aspects which contributed to the revolution. The case starts with explaining Egypt’s significant economic progress in 2000, thanks to the economic restructurings series executed by the regime led by Hosni Mubarak in 2004. With more than 83 million individuals, Egypt remains the most densely inhabited country in the Arab nations. In 2004, Hosni Mubarak ratified a sequence of economic reorganizations, including cuts in imports tariffs, trade liberalization, and changes in investment regulations (p 86). This paper aims to discuss the fundamental economic and political origins of the failure of the Mubarak government and what is seen in the current trajectory for the economy to grow to attract capital.

Question 1: Economic and Political Cause of the collapse of Mubarak Regime

Economic Causes – In late 2000, a global economic crisis occurred, and the inflation rate was 12.8 percent. There was a revenue slow down and tourism, which contributed to $11 billion contributing to 8.5 GDP reduced between 2009 and 2010. The Egyptian expatriates working abroad contributed to $8.5 billion in 20 08 reduced as there was a construction projects closure in the Gulf. Due to the global economic crisis, the revenue contributed by the Suez Canal reduced by 25 percent in 2009 (p, 86). Additionally, the country experiences the rich and poor gap where the poor Egyptians are 44 percent are ranked as either poor or extremely poor with an average monthly salary of $100. About 2.6 million people are very poor out of the country’s population, and their whole income could not sustain even the basic needs such as shelter, food, and clothing.

Political Cause – In 2011, well-known dissatisfaction took the street. A riot was organized containing a group of young, savvy Egyptians who controlled social media platforms such as Twitter and Facebook to mobilize people for mass destruction. Many Egyptians filled the Cairo Tahir Square and demanded that Mubarak and his ministers resign. Mubarak did not heed that, which increased momentum in Egypt’s powerful military establishment on the sidelines.

Question 2

• What the Egyptian government needs to do

First, the government needs to grow the economy by maintaining political stability (Abuseridze, 2020). The foreign investors had lost confidence due to the unstable government. The country’s political systems should be fair and transparent through the maintenance of law and order. The political structure will enhance the social and economic conditions of the country.

Secondly, the government needs to work with the people and the people. Since most citizens lack jobs and are poor, the government should create job opportunities to improve the living conditions of its people. This can be possible if the country focuses on the developing industries that require labor work (Porter & Kramer, 2019)

Thirdly, the country should perform a subsidy reform. The country should focus on providing flexible exchange rates and competition in foreign markets (Miyamoto et al., 2019). This will attract foreign investment, hence developing the economy and creating employment for its people.

• Risk to the government

Political Risk

This consists of restriction enforced by the tariffs and licenses for imports and exports. The country’s political condition is not stable, affecting productivity and income generation. Since income generation is not stable because of political reasons, it will be hard to function resourcefully and efficiently (Islam et al., 2019). The government could also encounter challenges contending with overseas nations and harmonizing its financial plan.

Economic Risk

This consists of the physical and financial situations of the county, as the intercontinental barriers will directly impact international activities (Contractor et al., 2020). The country could also encounter challenges in acquiring the trust of its citizens and other foreign nations.

References

Abuseridze, G. (2020). Political Stability and Trade Agreements. Bulletin of the Georgian Natioanl Academy of Science.

Contractor, F. J., Dangol, R., Nuruzzaman, N., & Raghunath, S. (2020). How do country regulations and business environment impact foreign direct investment (FDI) inflows?. International Business Review, 29(2), 101640.

Islam, R., Arbak, S., & Joarder, M. H. R. (2019). THE ROLE OF GOVERNMENT ON POLITICS AND INTERNATIONAL TRADE. Humanities & Social Sciences Reviews, 7(3), 642-650.

Miyamoto, W., Nguyen, T. L., & Sheremirov, V. (2019). The effects of government spending on real exchange rates: Evidence from military spending panel data. Journal of International Economics, 116, 144-157.

Porter, M. E., & Kramer, M. R. (2019). Creating shared value. In Managing sustainable business (pp. 323-346). Springer, Dordrecht.