The Egyptian Economy Introduced
Due to the fact that Egypt is the largest country in the Middle East its economy is one of the largest in the region. Unfortunately it also remains one of the poorest countries in the region due to its large population. Like most other countries in the area Egypt depends heavily on oil for its income. While most of its neighbours have become very wealthy due to the production of oil this hasn't been the case with Egypt. Most of the other oil rich countries have small populations allowing for a high standard of living to be paid for with oil wealth. Egypt has by far the largest population in the region and that has meant the relative benefits of the oil wealth have been substantially less.
Egypt does have plenty of other advantages besides its oil wealth so there is lots of potential for the economy. There are actually quite a few other resources available such as coal and natural gas. The Nile also provides an excellent source of hydroelectricity that can be exported to help bring in money. For a country that is mostly desert there is a surprisingly strong agricultural sector as well. The country is also the cultural capital of the Arab world with a thriving movie industry. And of course there is a thriving tourism industry as Egypt is one of the most visited countries in the world.
Of course the greatest economic advantage that Egypt has its location. It is in one of the most strategically important areas in the world and its control of the Suez Canal makes Egypt an important centre for shipping. The canal is a major source of income for the country in the terms of the tolls that it collects. However they really haven't taken advantage of the fact that so many ships are going through the canal to become a major transhipment centre. The main reason for the failure to do this is the high taxes that are charged compared to other countries in the region.
The main problem with the Egyptian economy has been that there is too much government involvement. Most of the industry has been nationalized and even in the industries that allow for private ownership there are an excessive number of rules and way too much government interference. While government ownership doesn't necessarily mean that the economy will struggle in the case of Egypt that has been what has happened.
The government of Egypt have started to recognize that their involvement has slowed the growth of the economy and they have started to make an effort to allow for more private enterprise. The going has been slow but there have been some positive signs. There are still a lot of issues to be overcome and the bureaucracy is still a major hindrance to growth but they are at least making the effort. If they stay the course Egypt just might reach its economic potential.