Question

There are important historical and economic characteristics among developing countries that have led to their economic development problems. To what extent these characteristics occur in Egypt?And from your point of view which one is considered the main source of underdevelopment in Egypt? And why?

Answer 1

Islamicization of the constitution and centralised ruling of Islam people lead to bad economic conditions like rising unemployment, shortage of electricity and gasoline and inability to obtain foreign exchange. There is a re-establishing security needed for the Egyptian economy. The return over foreign investment and foreign tourism depends on government success maintenance of the peace. There must be giving proper focus over foreign relation policy. The foreign direct investment inflow becomes weaker than expected. Money in Egypt is not going into long term business investments. One of the important problem which Egypt economy faced is the high level accumulation of debt especially debt dominated in foreign currencies.
Government give more preference for long term interest rates. The high fall in the value of currency retards the foreign relation also. There is a high rise in nominal interest rate leads to fall in price of bonds and stock market prices. At the same time there is high unemployment rate occurred. Rising debt rate was one of the most important problem which affects the Egyptian economy. Economy is failed to use their resources in proper manner. There are several forms of policies implemented to control the financial problems. The GDP was increased to 5.6 percent in 2019 from 4.6 percent in previous years.