Group 3

13P027 Kushagra Grover

13P046 Tejas Shah
13P233 Sahil Vij
Flow of the Presentation
Why is Egypt important
Timeline - Egyptian Crisis
Causes of Collapse - Political & Economic
Dangers in current trajectory of economy
Implications for foreign companies
Actions for Government to attract foreign capital
Risks involved with these actions

Why is Egypt imp? ( For US, Europe &
World)
Egypt is the home of Suez canal and Sumed Pipeline
which are known as World Oil Transit Chokepoints
as on EIA website
7.5% of sea trade passes through the Suez canal
20% of which is oil tankers and 6% is natural gas
Sumed pipeline carries 2.5millions of barrels/ day
2/3
rd
of Europe oil passes through Egypt
Only two direct routes for crude oil from Red sea to
Mediterranean Sea
Example: Oil prices rose above $100 in July 2013 due
to unrest in Egypt


Timeline
Mohamed Bouazizi, a twenty-six-year-old college graduate in Tunisia, sets
himself on fire
December 2010
The Arab Spring Begins
January 14, 2011
In Tahrir Square in Cairo, Egypt, protests call for President Hosni Mubarak to
step down
January 25, 2011
Hosni Mubarak Resigns
February 11, 2011
Mohamed Morsi is Elected
June 24, 2012
Morsi Places Limits on the Military
August 12, 2012
Morsi's Decree
November 22, 2012
The SCAF Steps In (Military Coup)
July 3, 2013
Interim Government Labels Muslim Brotherhood a Terrorist Organization
December 25, 2013
Conclusion: The Revolution Continues January 25, 2014
Causes of collapse - Political
Thirty years of dictatorship and autocratic rule
High level of corruption
The Emergency law
Faulty constitution
Emergence of the working class as the most powerful
social force in society
Growing calls for constitutional, economic, political
and social reform
Forging the latest parliamentary elections
Successful revolution in Tunisia
Unity between Muslims and Coptic Christians

60%
19.40%
13%
0%
10%
20%
30%
40%
50%
60%
70%
1984 1991 2007
Minimum wage rate as related
to per capita GNP
At 13% in 2007, the minimum wage rate in
Egypt was the lowest in the world
Egypt Unemployment Rate
Unemployment fell from 11% in 2004 to 8% in
2008
It again increased to 12% in 2011
2.6 million people could not cover their
basic needs
Causes of collapse - Economic
Egypt GDP Growth Rate
Egypt Inflation Rate
GDP Growth rate was around 2 4 % in
the early 2000s but accelerated to 7% in
2008
Post 2010 it declined to 4% and to -4% in
2011
Inflation rate remained at 12.8% in the
period 2004 to 2008
It peaked at around 23% in 2009


Causes of collapse - Economic
More aggressive turn to neo-liberal free market policies
pursued by the Mubarak regime after 2004, an agenda
dictated by the International Monetary Fund and its
overseer, the United States
Under the direction of the presidents son, Gamal
Mubarak, this program involved two interconnected
processes:
1. Acceleration of privatisation and the destruction of
jobs in formerly state-owned industries
2. Further impoverishment of the working class
combined with a redistribution of wealth to the
upper echelons of society
Causes of collapse - Economic
Dangers in current trajectory of
economy
Political uncertainty and anxiety over the future

Political protest & labour strikes

Deep mistrust between Islamist and secular parties, and Muslim-Christian tension
in some parts

Lack of clarity of powers & co-operation between Military & ministers might lead
to repetition of happenings

People have realized their rights, any autocratic rule might not
go a long distance


Implications for foreign companies
Unstable environment for business


Clumsy Bureaucracy Execution is slow


Uncertainty on authority, power and Constitution




Actions for Government to attract foreign
capital
Rapid democratisation

Restrain its borrowing from World Bank & IMF

Empower industries - issuing laws and regulations easier norms initially

Emphasis on Corporate Governance

Spending on safety of tourists so that travel helps them gain
momentum (12 % Egypts workforce)

Risks involved with these actions
Domestic companies might feel the heat


If it is not worked out in a controlled manner, will
further increase the gap between the rich and the
poor


Agriculture & Rural areas might be neglected





"Bread, freedom, Social justice"