There has been increasing debate about the economy in Egypt in recent weeks as political and street turmoil largely ceased to feature any big surprises (that is, of course, a relative statement), and as the pro-Morsi side appears to have been substantially contained. Talk shows have featured more and more angry criticism by hosts, commentators and guests regarding the cabinet’s performance, regularly dubbing it “The Shaky Hands Government.” The title predominantly relates to what critics perceive as the government’s indecisiveness on security issues, but it also has been increasingly used to refer to the cabinet’s performance (or alleged lack thereof) on economic and other non-political issues, especially as its nominally two top figures are widely considered to be respected economic minds.
While there might naturally be some disagreement over what needs to be done to revitalize the economy (whose growth rate slumped to 1.5% in the last quarter after rising more than 7% in 2008 and more 5% in Mubarak’s last years), there's agreement that the economy is in an unsustainable condition. Tourism, regularly said to account for more than 10% of GDP, is still down from its 2010 peak, and August violence cut tourist arrivals from Europe by 95%, according to government figures. Foreign direct investment — a strong engine for growth in Egypt, in particular — has been straggling; the trade deficit grew 6.3% year-on-year in July, while the budget deficit could surpass 13% as debt rises. Foreign reserves have been rapidly dwindling since 2011, and both the Mohammed Morsi government and the current government have strongly relied on aid from the Gulf to keep the country afloat. Meanwhile, statistics continue to show to signal the alarms on unemployment, poverty and inflation. The World Economic Forum’s latest Global Competitiveness Report paints a bleak portrait of Egypt.
