Egyptians Watch Sinking Economy Drop Even Further

By Sarah Gauch, | The Christian Science Monitor, February 12, 1991 | Go to article overview

Egyptians Watch Sinking Economy Drop Even Further


Sarah Gauch,, The Christian Science Monitor


EACH day the Gulf war continues, Egypt's debilitated economy worsens.

Egyptians returning from Iraq and Kuwait are clamoring for jobs, revenues from salaries of other workers in the Gulf are down, as are tourism and earnings from the Suez Canal. These problems have aggravated the persistent trials of a massive $50 billion foreign debt, rapidly growing population, and bloated public sector.

Western and Gulf countries' promises of aid and forgiveness of debt and the government's struggle to go ahead with the International Monetary Fund's (IMF) reforms may give the economy some relief in the future. In the meantime, Egyptians are using every means they can to survive.

Nowhere are Egypt's economic woes more evident than in the tourist industry. Tour operators say almost all tours have canceled. Hotel lobbies remain empty, and airlines are canceling flights because of the decrease of travel.

Another problem created by the war is the return of more than 500,000 workers from Iraq and Kuwait. These people will not only need jobs, but their arrival means a sharp decrease in foreign remittances for Egypt as well.

Suez Canal earnings are also down, a result of increased insurance premiums on ships going the waterway, according to Ezzat Adel, the canal's chairman.

In total, the soaring costs from the Gulf war were recently estimated at $13.7 billion, twice the original figure, according to Prime Minister Atef Sedki.

Surprisingly, despite the economy's continued decline, there are not hordes of idle Egyptians on the street, nor are they starving. As times get tougher, the people are using their characteristic resourcefulness to get by.

They scrape out a living in the most unlikely ways, sharpening knives, locating parking spaces on Egypt's busy streets, delivering tea, and dispersing wafts of incense.

Oriental carpet repairers are tucked into the nooks and crannies between rows of shops, peddlers of facial tissue maneuver through traffic, and fruit and vegetable sellers are asleep in front of their crates loaded with produce. This is Egypt's informal market, a growing segment that is helping relieve the people's financial pressures.

"It has and it is keeping people employed," said Heba Handusa, the former head of American University in Cairo's economics department. "It's the sector that's most sensitive in providing new jobs."

There exists little information about the informal market by its very nature.

"It is the sector which the government knows nothing about and desires to know nothing about," said Ibrahim el-Issawy, economics professor at the Institute of National Planning. …

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