Macro-economical concept applied in Egypt such as : unemployment rate, Economical political power, long run variables and stock market, role of the central bank all that and more you can see under the topic Egypt between black yesterday and welling tomorrow

1. HFWU (MBA International Management) SS
2013
Prof. Dr. Gerhard Pfister
Dr.Mohammed Ghorab
Egypt between Yesterday and
Tomorrow
( Unemployment rate)

3. Aquatic Borders:
Seas:
1- Mediterranean Sea : from Atlantic
Ocean
2- Red Sea: Indian Ocean
Rivers
1- Nile : comes from
- White Nile (Great Lakes) from
Central Africa (Rwanda & Burundi
collected in lake
victoria, tanzania, uganda)
2- Yellow Nile: Chad connecting to
Nile river valley
3- Blue Nile source of fertile soil
from lake Tana in Ethiopia joined
together to form the Nile river in
Sudan Khartoum
- In Egypt : North of Cairo, the Nile
splits into two branches that feed

4. Introduction
 Egypt's economy is the second largest in the Arab
world (after Saudi Arabia)
 The service sector is by the far the largest and
fastest-growing economic sector and accounts for
almost 51 percent of GDP
 $537.8 billion (2012 est.)
 Country comparison to the world: 27

5. Some Facts about Egypt
- Total Area 2012 1,002,450 km
2
387,048 sq mi
Currency Pound 1 L.E = 0.11 Euro
1 L.E = 0.143
- Population 2013 estimate 91,000,000
- Population below
poverty line
2005 20%
- Labor force 2012 30 Milion (22 W.W)
- GDP 2012 $537.8 billion
- GDP - per capita (PPP) 2012 $6,600
- GDP (official
exchange rate)
(Nominal GDP)
2012 $255 billion
- GDP - real growth rate 2012 2%
- GINI Index 2008 30.8 (Medium)
- HIDI Index 2011 0.644 (Medium) 113

6. Religions & Human Rights
95%
6%
0.50% 0Religions 2009
Muslims
Arthodox
Jewish
Atheist and Bahai
Unknown Numbers although Government had accepted removing
the religion area from Atheist ID

7. GDP Composition by Sector
Agriculture, 14
.70%
Industry, 37.4
0%
Service, 47.90
%
GDP Sectors
Agriculture
Industry
Service

8. Labor Force by Occupation
Agriculture, 32
%
Industry, 17%
Service, 51%
Labor by Occupation 2011 from total 30 million
Agriculture
Industry
Service

9. Labor Force by Age
0-14
years, 32.30%
15-24
years, 18%
25-54
years, 38.30%
55-64
years, 6.60%
65 years and
over, 4.80%
Age Structure 2013
0-14 years
15-24 years
25-54 years
55-64 years
65 years and over

10. Agricultural Products
 Cotton, rice, corn, wheat, beans, fruits, vegetable
s; cattle, water buffalo, sheep, goats
 Even though Arab land accounts for only 3
percent of the country's overall land
area, agriculture remains one of the most
important sectors of the economy, employing
roughly 30-40 percent of the labor force but the
number in this sector decrease steadily

11. Industries
 Concentrated in Cairo and the Nile delta.
 Textiles, food
processing, tourism, chemicals, pharmaceuticals, hydro
carbons, construction, cement, metals, light
manufactures, Steel
 Production of petroleum and petroleum products
 7 percent of GDP and providing a major source of
foreign currency.
 Construction industry has become one of the fastest-
growing sector in the economy
 Large part to huge government infrastructure and
modernization projects
 Increased as a result of the government's efforts
towards privatization (The aim of the X Government)

12. Service Sector Revenue
 Telecommunication: Telephone, Broadcast
media, Internet, Internet host
 Internet users in Egypt in 2012: 35 Million user
 Transport and Logistics & Shipping services: Airport, Suez-
canal, Ports,
( due to geographical territories: Red-sea, Mediterranean, Nile
river)
 Oracle Middle East, IT communication systems
 Tourism
 Trade
 Banking: West, Islamic Banking systems

13. Exports
 Crude oil and Petroleum
Products, Cotton, Textiles, Metal
products, Chemicals, Processed Food
 Export Partners (2011) :
 Italy 8.7%, India 7.3%, Saudi Arabia 6.1%, US
5.2%, Turkey 4.9%, Spain 4.2%, France 4.2%
- General Agreement on Tariffs and Trade (GATT) 2004 (WTO) : Egypt, Israel, USA
- It plays an important role in extension of Camp David Peace Treaty (17 September
1978) for 30 years
- between Egypt and Israel Export - Import

14. Imports
 Machinery and
equipment, foodstuffs, chemicals, wood
products, fuels
 Imports Partners (2011) :
 US 10.7%, China 9.1%, Germany 6.3%, Italy
5.1%, Kuwait 4.7%, Turkey 4.4%, Saudi Arabia
4.3%
U.S Aids/ Camp David think about Marshallplan ; I’ll help you but you`ll
move in the line that I draw for you

15. USA Export to Egypt in Agricultural
Sector
 $9.7 billion

16. GDP Growth Rate
2013 = 2% steady growth rate

17. Unemployment Rate
 12% in 2011 – 12.5% in 2012
 (Please consider the shadow economy which is very famous in Egypt and out of this calculations)
 Age: (2007)
 15-24 years old: 24.8%
 Males: 17.2%
 Females: 47.9%
 Fertility rate decreases ; 2000 (3.6)- 2008 (3.0) – 2013 (2.5)
 Due to a high corruption and carcinogenic products and
fertilizers that was used by our X-agriculture minister

18. Age/ Population / Gender:

19. Wealth Distribution
 Egyptian society is moderately unequal in terms of
income distribution, with an estimated about 35% to
40% of Egypt's population earning less than the
equivalent of $2 a day, while only around 2–3% may
be considered wealthy (Acc. European Standards for
Quality of live)

20. Budget and Investment:2012
 Revenues: $56.64 billion
 Expenditures: $83.24 billion
 Investment: 13.5% of GDP
 Taxes: 22.2% of GDP
 Budget Deficit: -10.4% of GDP
 Public Debt: 65,3% of GDP (31,6)
 External Debt: $380824 Million
 Total Governmental Debt: 1850766 Million L.E

21. Inflation Rate according to consumer
price Index
2012 8.5%
2011 10.2%
Reserves of foreign exchange and gold
$15.26 billion (31 December 2012 est.)

22. Two hard decision for the Central
bank
1. Keep interest rate stable to encourage investments
in this hard country situation
2. Increasing the interest rate
 High price of the dollar against the pound recently
considered one of the main factors behind the sudden
rise in inflation indicators to reflect the increase in the
prices of goods especially that the country’s
dependence on import more of its commodities from
abroad
 Increasing the inflation rate and dollar exchange
(Dollarization)
 Protect the Egyptian citizen income from decaying
and loosing value

23. Decision :
 Increasing the interest rate but providing loans with
appreciate interest rate (low)
 Control relative float exchange market so as not to
give rise to chaos in the flotation (Float of the
Egyptian pound ex.rate)
 The stability of the assets of the foreign exchange
reserves
 The central bank pointed out - in a statement - that he
will raise the price of the main operations by 50 basis
points to reach 10.25% and raise the price of credit
and debit by 75 basis points to 10.25%
 Raise the price of return on deposit and lending 50
points basis or 0.5 percent to close 9.75 percent and
10.75 percent, respectively

24. Interest Rate (Savings)
 For saving certificates (3 years) reaches 13.5%
 For yearly Certificates: 12%
 For saving bank account : 10.25 %
 For foreign bank notes: 3%
 Domestic deposited currency: 235 Milliard pound

25. Egypt suffering worst economic
crisis since 1930s'
 Since the fall of Hosni Mubarak in 2011, Egypt has
experienced a drastic fall in both foreign investment
and tourism revenues, followed by
 60% drop in foreign exchange reserves,
 3% drop in growth, and a rapid devaluation of the
Egyptian pound.
 All this has led to mushrooming food prices, ballooning
unemployment and a shortage of fuel and cooking gas
– causing Egypt's worst crisis.

26. Egypt Economic Crisis
1- Rising the food price
2- lose of control
3- increase the rate of unemployment
4- Insufficent security
5- Egypt inflation set to climb to 10.9%, says IMF
International Monetary Fund
6- IMF cuts 2013 growth forecast for Egypt economy
to 2%

27. Political instability kills the chances of
investement and economic stability

28. Unemployment Rate

29. Unemployment Problem in Egypt
The problem of youth unemployment has been
getting worse for several years. But there are at last
some reasons for hope.
Government is trying to address the mismatch
between education and the labor market. Companies
are beginning to take more responsibility for investing
in the young. And technology is helping democratize
education and training.
The world has a real chance of introducing an
education-and-training revolution worthy of the scale of
the problem. (vocational training school)

30. Islamic Bond
 The Sukuk, or Islamic bond, is now being held up as that something, with some
in the government touting them as a savior of the Egypt’s economy.
Bankers, analysts and investors appear less excited.
 More corporate issuance and the entry of retail investors can power sukuk
market ahead
 Public Sukuk are able to enter this market, as they are listed on stock exchanges
but there is a secondary market (Niche)
 "Sukuk bonds" are designed to get around religious laws banning the payment
of interest for money lending. But one of the most volatile debts in the Dubai
World standstill is a $3.5bn Islamic bond due to be repaid in December.
 HSBC estimates there is $822bn Islamic finance debt outstanding in the world
 MANAGING FINANCIAL RISKS and crisis through the using OF SUKUK
STRUCTURES
 Long-Awaited Sukuk Cannot Rescue Egypt’s Economy Alone, Say Analysts
 Countries using Sukuk : Egypt, Malysia, Qatar, Turkey, Kazakhstan

33. Islamic Bond (cont’)
The government is trying to sell some assets to get
cash to build a new infra structure which will help to
reinvested in new projects
 Road building or new telecom service or canal for
joining the Nile branches which will affect the
unemployment rate lowering it and relocate and
redistribute the employment rate all over Egypt.

34. Islamic Bond (cont’)
 Rachel Ziemba, the director of emerging markets at
Roubini Global Economics,
 “Notes that the seeds for Egypt’s economic troubles
were planted by Mubarak. In addition to saddling the
country with corruption and unemployment, Mubarak’s
government borrowed heavily to finance stimulus
packages during the worldwide economic
downturn, leaving Morsi to pick up the tab. “You had that
whole period where people weren’t sharing the wealth.
And then you had the global financial crisis, [with] the
government draining its resources trying to keep the
show on the road,”
 she says. “Morsi and his government didn’t really have a
very strong hand to play.”

35. What Europe should do?
 European officials have said that they stand ready to help
Egypt’s economic transition with technical
assistance, soft loans, and aid. A range of European
investors and donors have already pledged a total of $6.5
billion to Egypt,
 including $590 million for the period 2011-2013 already
made available from the European Union,
 an additional $1.3 billion from the EU in macro-financial
assistance, concessional loans, and grants, potential
lending of up to $2.2 billion for 2012 and 2013 from the
European Investment Bank, and up to $1.3 billion a year for
the next two years from the European Bank for
Reconstruction and Development. But aside from about
$900 million of this, most is conditional on the IMF loan

36. Can the Egyptian Economy be
saved:
 Establishing a correct full statistical data analysis about the economical
situation : base from Statistics Bureau, Director-General for Policy
Planning (Statistical Standards) and Statistical Research and Training
Institute (To find real number shows how big is the problems)
 Relocate police and security all over the country to encourage the
foreign investments which is the main motive for stock market
 New regulations flexable to organize the business life and the civil life
(Internal, External)
 New approach in Human resources : the best professional expertise
instead of the loyal
 Redistribution of the labor workforce in different sectors as it exceed
the real need in some sectors and deficit in other sectors that really
need labors
 Avoid crisis control and begain to make a long term plan through Risk
control and analysis

37. Future expectations and hopes:

38. Growing ties between Egypt, Turkey may
signal new regional order
Both majority party in Turkey, Egypt is Muslim brother party

39. Egypt and Iran: Pious
politics

40. BRÍCS+ Egypt
Egyptian President Mohammed Mursi Attend the fifth
BRICS summit in South Africa

41. Israel- USA relationship is going very formal
after a marriage of more than 35 years

43. References:
 http://www.indexmundi.com/egypt/economy_profile.html
 http://en.wikipedia.org/wiki/Egypt
 https://www.cia.gov/library/publications/the-world-factbook/geos/eg.html
 http://www.egyptindependent.com/news/egypt-inflation-set-climb-109-
says-imf
 http://www.egyptindependent.com/subchannel/Economy%20news
 http://english.ahram.org.eg/NewsContent/3/12/69408/Business/Econom
y/IMF-cuts--growth-forecast-for-Egypt-economy-to-.aspx
 http://www.bbc.co.uk/news/world-middle-east-22403719
 http://en.wikipedia.org/wiki/Egypt
 http://www.thedailybeast.com/articles/2013/05/02/egyptian-president-
mohamed-morsi-s-biggest-challenge-the-economy-stupid.html
 http://www.brookings.edu/research/opinions/2013/05/01-egypt-
economy-transition-ghanem
 http://www.guardian.co.uk/world/2013/may/16/egypt-worst-economic-
crisis-1930s
 http://www.indexmundi.com/egypt/economy_profile.html

45. Questio
ns