With 75 million people, Egypt is the most populous Arab state. On the face of it, over the past few years Egypt has made significant economic progress. In 2004, Prime Minister Ahmed Nazif and his team, many of them Western-educated businessmen, enacted a series of long-delayed economic reforms. These included trade liberalization, with deep cuts in tariffs, tax cuts, deregulation, and changes in investment regulations that allowed for more foreign direct investment in the Egyptian economy. Economic growth, which had been in the 2 to 4 percent range during the early 2000s, accelerated to 7 percent in 2005–2008. Exports almost tripled, from $9 billion in 2004 to more than $25 billion in 2008. Foreign direct investment increased from $4 billion in 2004 to $11 billion in 2008, while unemployment fell from 11 percent to 8 percent over the same period.

By 2008, Egypt seemed to be displaying many of the features of other emerging economies. On Cairo’s outskirts, clusters of construction cranes could be seen where gleaming new offices were being built for companies such as Microsoft, Oracle and Vodafone, as well as for several fast-growing domestic information technology companies. New highways were being built, hypermarkets were opening their doors, sales of private cars quadrupled between 2004 and 2008, and high-scale beach resorts catering to a growing tourist trade were expanding.
However, underneath the surface, Egypt still has significant economic and political problems. Inflation, long a concern in Egypt, remains high, hitting 23 percent in 2008.

Moreover, as the global economic crisis took hold in late 2008 and the world economy started to enter a recession, Egypt saw many of its growth drivers slow. In 2008, tourism brought some $11 billion into the country, accounting for 8.5 percent of the GDP, but it fell sharply in 2009. Remittances from Egypt expatriates working overseas also declined. In 2008, expatriate workers sent $8.5 billion back to Egypt, but 30,000 of those workers were predicted to return home in 2009 as construction projects in the Gulf, where many of them worked, were cut back or shut down. Earnings from the Suez Canal, which stood at $5.2 billion in 2008, also declined by 25 percent in 2009 as the volume of world shipping slumped in the wake of the global economic slowdown.

Egypt is still a country where there is a tremendous gap between the rich and the poor. Some 44 percent of Egyptians are classified as poor or extremely poor, the average wage is less than $100 a month, and 2.6 million people are so destitute that their entire income cannot cover their basic food needs.
These poor Egyptians lead lives that are in stark contrast to those of a wealthy elite, many of them Western educated.

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