In late February 2005, Egypt's President Hosni Mubarak surprised the world by announcing that henceforth the country's presidency would be determined by direct election. This follows the appointment in July of an entirely new cabinet that has since focused enthusiastically on numerous governmental reforms. And according to March 2005 commentary by The Economist (London), President Mubarak has identified himself closely with the reforms.
In March, also, a Reuters (Cairo) dispatch reported on statements by Egypt's new Finance Minister that the country was likely to show 7 percent growth in GDP within three or four years.
The economy has been stimulated by three specific reforms initiated by the new cabinet, said the Finance Minister, including lower tariffs to enhance global competitiveness, plans to cut taxes, and a newly reinvigorated privatization program.
And while a 7 percent growth in GDP sounds impressive, the consensus is that the economy must grow by a minimum of 6 percent annually to make any meaningful difference in the lives of the average Egyptian consumer.
This is vividly illustrated in the chart on page 1. The chart shows the percentage change in Egypt's GDP from 1996 through the end of 2005. The chart also shows the annual change in PPP per capita income from that same year.
Between 1995 and 1996, per capita income grew 4.5 percent, and that was the last time PPP per capita was measured in whole percentages. PPP per capita growth for the decade (1996-2005) is never expressed in anything but hundredths of a percent.
PPP per capita is widely viewed as a measure of the standard-of-living.
Clearly, the Egyptian economy is in need of some powerful stimuli if it is to provide the jobs necessary to fuel consumer spending. Egypt has the biggest population in the Arab world, and it's...