Sociopolitical situation
The constitutional changes announced by President Hosni Mubarak in late 2006 continue to be criticized by opposition parties. Though some positive elements are contained in the amendments, the changes in general targeted the ability of the Muslim Brotherhood to operate. Amendments forbidding political activity based on religion and the involvement of police in surveillance and arrest were criticized for increasing the power of the ruling party and curtailing the Islamist movement. The government pushed through the approval of these changes by referendum in March 2007. However, the elections to the upper house (the Shura Council) in June 2007 were widely condemned as corrupt, violent and undemocratic.
Egypt’s large number of NGOs (between 15,000 and 20,000) cover all aspects of society, from simple community groups to internationally recognized organizations. The government seeks to control NGO activities for fear of civil society becoming the focus of meaningful political opposition. Together with professional syndicates and trade unions, NGOs have therefore experienced a high degree of state interference. Advocacy groups working for human rights, political freedom or environmental issues have been targeted by the state. In particular, the Center for Trade Union and Workers Services was subject to state security harassment in 2007, as the government blamed its members for inciting a wave of strikes. All branches of the center were closed.
Egypt has witnessed sound economic growth due to sustained and bold reforms and prudent macroeconomic management. Fiscal adjustments and significant achievements in privatization and financial reform have increased market confidence and boosted investment, thereby helping to sustain a high pace of economic growth. However, the high budget deficit and bureaucratic barriers to private sector activity raise concerns about the government’s commitment to reduce the fiscal deficit.
The current challenges in the Egyptian economy are the following:
- After falling to around 3 percent for most of 2005, inflation has crept up since March 2006, reaching 12.4 percent in December 2006 and falling again to 8.4 percent in June 2007. (The prices of half the CPI basket are controlled by the government.)
- Unemployment affects mostly the young, whether educated or poor. While employment is growing, the share of the working age population is also growing and is expected to reach 67 percent in 2020. 600,000 new jobs need to be created in order to absorb the increasing work force entering the labor market. The present rate of investment, which is about 20 percent of GDP, is not sufficient to generate the GDP growth rates to 6 or 7 percent to address unemployment.
- The remarkable economic growth did not decrease the poverty rate. On the contrary, the head count measure of those below the roughly $2-a-day line rose from 16.7 percent in 2000 to 19.6 percent in 2006. The poor mostly live in rural areas in Upper Egypt.
Religious situation
On 13 July, Egypt hosted a meeting for the reconciliation between the Coptic and Ethiopian Orthodox churches. This meeting was made possible due to the extensive efforts of Catholicos Aram I of the Armenian Apostolic Church. Since 1994, a meeting between the two churches had not been possible since they had serious differences, particularly in administrative issues. The common declaration signed by the churches recognized the unity of the Oriental Orthodox family of churches.