Search this website:
piastres, Red Sea resorts, growing cotton, Aswan High Dam, automobile assembly
For most of Egypt’s history, its economy was based almost entirely on farming, despite the fact that more than 95 percent of the country’s land area is infertile desert. Long an exporter of cereals, in the 19th century Egypt began to specialize in growing cotton, which is still an important cash crop. The first significant industries were set up only in the 1930s. Industrialization increased in the 1960s after much of the industrial sector was brought under state control. In the late 20th century other important sources of revenue included tourism, oil production, and remittances from the 3 million Egyptians working in the Persian Gulf states. Despite its economic and social development in the 20th century, Egypt was a relatively poor country in world terms, with a gross domestic product (GDP) in 2006 of $107.5 billion, or $1,449.20 per capita.
Egypt’s labor force of 23.1 million is 78 percent male and 22 percent female. The largest proportion of the labor force works in agriculture or fishing, which employ 30 percent of all workers. The services sector employs 50 percent, and industry (including manufacturing and construction) employs the remaining 20 percent. There are few skilled workers, since training is usually rudimentary and one-third of the adult population is illiterate. Workers in the state sector are represented by the Egyptian Trade Union Federation, which was established by the regime in 1961 and remains under government control.
In 2006 the agricultural sector (including fishing) contributed 14 percent of the GDP. Before industrialization, agriculture provided most of Egypt’s exports, but by 2002 it contributed less than one percent of the exports. The most important crops include cotton, cereal grains, fruits and vegetables, and animal fodder. Egypt’s area of cultivable land is small but highly fertile. It is located for the most part along the Nile and in the Nile Delta. Yields are high, and almost every piece of land grows at least two crops a year. The country ceased to be self-sufficient in cereals at the beginning of the 20th century, although it still exports some poultry, fruits, vegetables, sugar, and rice. It now imports about a quarter of the cereals it needs and a much higher proportion of the meat and dairy products.
Fishing is a significant industry in Egypt. Large quantities of fish live in the Nile, the Mediterranean Sea, and the Red Sea.
Industry, including manufacturing, mining, and construction, contributed 38 percent of the GDP in 2006. The main manufactured goods are textiles, chemicals, metals, and petroleum products. More liberal economic policies have led to the establishment of a number of private companies involved in automobile assembly, electronics, consumer durable goods such as refrigerators and other appliances, and pharmaceuticals. The majority of factories are concentrated around the two major cities of Cairo and Alexandria and in industrial zones along the Suez Canal.
Petroleum is Egypt’s most important mineral product. It is a major source of export earnings. In the 1980s the government developed the production of natural gas to supply domestic energy needs. It began exporting natural gas in the 1990s. The main oil and gas fields are located along the Red Sea coast and in the Libyan Desert. Other minerals produced in Egypt include phosphate rock (a source of fertilizer), iron ore, and salt.
Services contributed 48 percent of the GDP in 2006. Important services include government social services such as health and education, financial services, and personal services.
In 2006, 8.6 million tourists visited Egypt, providing $7.6 billion in revenues. The majority of visitors make a simple tour that includes Cairo, the great pyramids nearby, and the sites of other ruins and artifacts of ancient Egypt up the Nile. Many tourists also visit Egypt’s Red Sea resorts to take advantage of the warm winter weather. In 1992 attacks on foreigners by Islamic extremists scared off most tourists, but the industry soon recovered. The tourism industry is made up entirely of privately owned businesses.
Egypt is self-sufficient in energy. Its main sources of electricity are hydroelectric power plants at the Aswan High Dam and steam-driven power plants that burn natural gas. Egypt’s own oil and natural gas provide almost all of the country’s fuel needs. Pipelines supply gas to all major urban centers.
Egypt’s press, publishing, and media facilities are the largest and most developed in the Arab world. Much of the press was taken over by the government soon after the revolution of 1952, when the daily newspaper Al Ahram became the regime's principal mouthpiece. Party and private newspapers are permitted but are subject to censorship. The government controls the national radio and television services, as well as the basic telephone system. Foreign companies have installed cellular telephone networks and operate private payphone systems.
Currency and Banking
Egypt's currency is the Egyptian pound, consisting of 100 piastres (5.70 Egyptian pounds equal U.S.$1; 2006 average). The Central Bank was created in 1961, when all the country's private banks were nationalized. Several specialized state-owned banks were also set up. Foreign banks were allowed to reenter the country as joint ventures with Egyptian investors in 1974 after having been forced to leave during the nationalization period. In the late 1990s the government agreed to partially privatize Egypt’s four giant state-owned banks. More than 80 domestic and foreign banks operate in the country.
Article key phrases:
Search this website: