Economic turmoil challenges Egypt reform

June 10, 2011 at 10:19 AM
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CAIRO, June 10 (UPI) -- Egypt's economy is reeling after its 2011 revolution, with tourism and investment in free-fall, officials say.

Annual growth has slowed to less than 2 percent from a projected 5 percent and hard-currency reserves are down 25 percent. Tourism, which fuels more than a 10th of the economy, is down 40 percent, officials say.

"People are angry," Hassan Mahmoud, a Cairo slum-dweller who lost his $10-a-day job in a souvenir factory, told The New York Times. "People in the neighborhood are talking about going back to the streets for another revolution, a hunger revolution."

The leading economic powers have pledged $20 billion in aid to Egypt and Tunisia, including debt forgiveness and loans from the World Bank and International Monetary Fund.

Mass unemployment, which helped bring down the Hosni Mubarak regime, has only worsened.

When the government announced 450,000 temporary public jobs, 7 million people applied, said Ahmed Galal, an economist.

Employers blame strikes by newly empowered workers for bringing industrial production to a halt.

Many say the old regime, by its corruption, discredited free-market ideas like privatization.

"We now have a rotten capitalist regime and rotten corrupt capitalists," said Rifaat el-Saed, chairman of the leftist Tagammu Party.

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