Tips Writing the Economic System in Egypt Essay
Egypt’s economy moves towards the market-oriented approach after years of being a planned economy with the import substitution if it comes to the global economy. As a planned Egyptian economy, the government of Egypt had complete control over the resource allocation, including pricing and distribution.
It also concentrated on domestic production rather than foreign goods importation. Being a market-oriented economy, this country implements structural reforms that encourage foreign direct investment and lets demand and supply dictate the pricing and distribution of goods.
Though, there are still some state-owned organizations such as banks. Such an economic approach assisted Egypt’s economy is GDP growth by 8% from 2004 to 2009. Nevertheless, in 2011, there was a political revolution that significantly eliminated economic growth.
Its nominal GDP (gross domestic product) was $330.765 billion for 2015. It features a workforce of 28.4 million. Almost half of this amount works in the service industry, 29% works in the agricultural sector making agricultural products, and 24% works in the industry public sector.
Leading industries in Egypt
Egypt’s economy is grounded in several industry endeavors. They include manufacturing, cement and metal production, construction, pharmaceutical, chemicals, hydrocarbons, food processing, textile production, and of course, tourism.
For instance, the textile industry is contributing 25% of non-petroleum grounded income. The economy’s informal sector is rather large, representing 30% to 60% of the growth rate.
Top export partners and goods
In 2014, Egypt has exported $33.2 billion worth of goods, reducing public debt, and conducting free trade. So it made it be the 62nd biggest export economy in the whole world. It usually exports gold ($667 million), video displays ($757 million), insulated wire ($996 million), refined petroleum ($1.34 billion), and crude petroleum ($6.84 billion). Despite this fact, most the people in middle east live below the poverty line, according to the central bank of Egypt.
The major partners of Egypt are Turkey ($1.77 billion), India ($1.86 billion), Saudi Arabia ($1.95 billion), Germany ($2.03 billion), and Italy ($3.28 billion).
Top import partners and goods
Egypt’s imports were $82.4 billion in 2014, providing the country with a negative trade balance that was $49.2 billion. Meaning, Egypt imported more than it actually exported in private sectors.
For instance, Egypt imported cars ($2.27 billion), crude petroleum ($2.79 billion), semi-finished iron ($2.9 billion), wheat ($5.36 billion), and refined petroleum ($7.47 billion). Its major import countries are Germany ($4.1 billion), Ukraine ($4.6 billion), Russia ($5.7 billion), the US ($5.89 billion), and China ($9 billion). Note that Egypt does not import natural gas. According to the world bank data, the exchange rate was rather mediocre at these times.
Challenges Egypt’s economy faced
After the revolution in 2011, Egypt’s economy has suffered a big downturn. At this time, the foreign exchange reserves reduced from $36 billion to $16.3 billion. So the investor confidence fell. The biggest challenge was the promotion of growth with limited capital.
Future economic plans
The country targets at restructuring that concentrates on sustainable growth. Some steps toward the economic reform were taken by the government. Also, a new economic team was appointed. They target boost growth from 5% to 6%, eliminating inflation to 10%, and a reduction in the unemployment rate to 9% by 2020.