Egypt
Nominally independent from the UK in 1922, Egypt acquired full sovereignty following World War II. The completion of the Aswan High Dam in 1971 and the resultant Lake Nasser have altered the time-honored place of the Nile River in the agriculture and ecology of Egypt. A rapidly growing population (the largest in the Arab world) will continue to stress Egyptian society and overtax resources as the country enters the new millennium.
Warning
Travelers to Egypt are currently advised to exercise extreme caution. We continue to receive reports that terrorists in Egypt are planning attacks additional attacks. Recent terrorist attacks in Egypt have targeted foreign tourists and further such attacks can be expected. Commercial and public areas known to be frequented by foreigners are possible terrorist targets.
There is a heightened concern over terror attacks in Egypt, including Cairo after a string of bombings in the Red Sea resort of Sharm el-Sheik, 250 miles east of the capital, that killed 88 people on July 22. Travelers and residents in or traveling to Egypt should avoid the South Sinai Governorate, crowded tourist destinations in Cairo, and to generally exercise caution while traveling in Egypt.
Security haqs been increased in many parts of Cairo, including around the Pyramids, after the deadliest terrorist attacks in the nation's history. The day after the Red Sea attacks, an explosive detonated as it was being carried by a man several miles from a tourist bazaar next the Pyramids of Giza. Investigators were trying to determine whether the man, who was severely injured, was taking the explosive to the nearby tourist area of Kerdassa, a bazaar of souvenir shops near the Pyramids. The device, which the man was carrying in a sack, apparently went off accidentally in the neighborhood of Kufr Tuhurmus, several miles from Kerdassa. No other injuries were reported.
The incidents were the latest in a number of attacks on tourists in the past nine months. In April, a suicide bomber detonated a homemade bomb near the Cairo tourist bazaar of Khan al-Khalili, killing two French citizens and an American. Days later, two veiled women shot at a tour bus in Cairo before fatally shooting themselves, and a suspect in the Khan attack died when the bomb he was carrying went off during a police chase. In October, car bombs hit two hotels in the Sinai resorts of Taba and Ras Shitan, 120 miles north of Sharm el-Sheik.
In the October 2004 Red Sea attacks, car bombs hit hotel resorts near the Israeli border nearly simultaneously, killing 34 people. Egyptian authorities portrayed those bombings as an extension of the Israeli-Palestinian conflict, rather than a homegrown Islamic militant movement or an al-Qaida-linked operation. They said a Palestinian who died in the attacks had recruited Bedouins and Egyptians to plot the bombings.
But the sophistication of the latest bombings - and their timing on the heels of two rounds of explosions in London - raised worries of a wider international connection and possible al-Qaida links. Likewise, the Sharm el-Sheik bombers in selecting their targets, passed over several obvious Western targets, such as the nearby Hilton Hotel, raising concern of a more general campaign against Egypt’s tourist industry by home-grown militants. In the 1990’s, Islamic extremists launched a long-running campaign against the tourist industry, culminating in the 1997 massacre of tourists at Luxor.
Sporadic student protests on campuses at Ain Shams University (near Heliopolis, north-east Cairo) and Cairo University (Giza) can disrupt transport, but rarely get out of hand. The authorities have recently began permitting more frequent political demonstrations in central Cairo ahead of the scheduled September 7, 2005 presidential elections. These usually take place outside Parliament (in Majlis al-Shaab St) or at the nearby Abdin Palace.
President Hosni Mubarak is one of the longest-serving leaders in the Arab world. He succeeded President Anwar Sadat, who was assassinated in 1981, and was re-elected in 1987, 1993 and 1999. Mubarak has escaped no fewer than six assassination attempts.
Mubarak's health seemed to slip in 2003, but he appears to have fully recovered since and has announced plans to run for re-election in the September 2005 presidential vote.
Mubarak, like his predecessor, is an economic liberal. His government has promised economic change, intended to spur growth. But the country remains plagued by high unemployment and low-living standards. The president has pursued friendly relations with the West. He broke the isolation imposed on Egypt by Arab countries opposed to peace with Israel and at home he has reined in Islamist groups responsible for attacks in the late 1980s and early 1990s.
Egypt's economy is continuing its gradual recovery from the sharp downturn of 2002, but with a growth rate still far below what was achieved in the 1990s. The country's real Gross Domestic Product (GDP) grew 3.6% in 2004, with an upward trend expected again 2005.
Several of Egypt's key sources of hard currency revenue have been negatively impacted since late 2000 as a result of regional tensions and fears of war and terrorism, though the tourism sector made a modest recovery in 2003, with tourist arrivals up 30% year-on-year over 2002 levels. In a normal year, tourism revenues account for about 5% of Egypt's GDP, and are among the country's five main sources of hard currency inflows (the others being remittances from Egyptian workers abroad, oil exports, Suez Canal tolls, and foreign aid).
Egypt's main challenge is matching employment growth to the nearly 800,000 new job seekers coming into the labor market each year. Unofficial estimates put Egypt's unemployment rate in the 15%-25% range, roughly twice the official figure. To lower unemployment, Egypt needs to maintain a high rate of GDP growth and to bring in more foreign investment.
