Almost three years after the outbreak of the Arab spring uprisings, Egypt’s economic performance is yet to recover. Amid the ongoing political uncertainty and social instability Egypt’s macroeconomic indicators remain well below their pre-2011 levels.
Economic growth remains weak, coupled with high budget deficit and high public debt. Low growth rates pose a danger to poverty eradication efforts and contribute to mounting social frustrations, as they will not suffice to deliver the needed jobs and opportunities. Poverty remains high, especially in Upper Egypt: with a poverty incidence of 41.2 per cent Upper Egypt is almost doubling the national average of 21 per cent of the population living on less than USD1 per day during 2010/11.
The year 2013 saw the highest record of unemployment, which peaked to 13.4 per cent of the total workforce in the third quarter of 2013, up from 13.3 per cent in the previous quarter. This is far higher than the Egyptian average unemployment rate of 9.9 per cent over the last decade. Most critically, more than one in three young people between 20 and 24 years old are not being absorbed by the labor market.
The ongoing political uncertainty and social instability have also accelerated inflation rates, due to the higher prices of imports, and hit tourism and foreign direct investment (FDI), two key sources of foreign reserves.
The imperative of supporting broader economic and social growth, within an environmentally sustainable framework where prosperity is shared among all parts of society and no one is left behind in benefitting from industrial growth, has become even more urgent in the aftermath of the Arab spring uprisings. Indeed, industry generates the wealth needed to address critical economic, social and humanitarian needs.