Economic Crisis in Egypt Derails Transition

After the Cairo insurrection in January 25, the economic growth of Egypt is paralyzed, tourists have fled the country. Only international financial aid can help the country endure a transition from a dictatorship to an imperfect democracy.

The International Monetary Fund and the World Bank gave a loan of 4,300 million of Euros. Meanwhile the Islamic Development Bank has borrowed 2,400 million this has allowed the Egyptian government to elaborate a budget to cover the loses of the measures taken to avoid a social cataclysm. Among those measures are the creation of over 450,000 new public jobs and the help to poor sectors.

The economic growth of the country in 2010 was of 6% now the president of the country expects to reach a 2% although the best prognosis is of 1% or less. The Egyptian economy is a neoliberal paradox, since it has giant corporations like Orascom, however 40 million of people, half of the population, lives with two dollars per day or less.

The economic problems are harder in the private sector especially since an anti corruption campaign launched by the government has paralyzed some activities. However the more serious damage is the tourism since more than a million of tourists escaped from the country due to the revolution. This has left several hotels with no guests which incurs in hard monetary loses. (AV)

Source: El País Newspaper