3. What dangers do you see in the current trajectory of the Egyptian economy? What are the implications of these dangers for foreign companies that might consider doing business in Egypt? What do you think it would take to encourage more foreigners to visit, invest, and do business in Egypt? Would such inward investment be good for the Egyptian economy?

With 83 million people, Egypt is the most populous Arab state. On the face of it, Egypt made significant economic progress during the 2000s. In 2004, the government of Hosni Mubarak enacted a series of economic reforms that included trade liberalization, cuts in import tariffs, tax cuts, deregulation, and changes in investment regulations that allowed for more foreign direct investment in the Egyptian economy. As a consequence, economic growth, which had been in the 2 to 4 percent range during the early 2000s, accelerated to around 7 percent a year. Exports almost tripled, from $9 billion in 2004 to more than $25 billion by 2010. Foreign direct investment increased from $4 billion in 2004 to

$11 billion in 2008, while unemployment fell from 11 percent to 8 percent.