Last week, the central bank of Egypt, a large African country, abruptly announced a 600 basis point interest rate increase to ease foreign exchange woes. As soon as the news came out, the Egyptian pound exchange market immediately fell sharply, and the pound exchange rate fell nearly 40% overnight. It will not be long before the Egyptian government's few foreign exchange reserves are exhausted, and an economic crisis is inevitable for Egypt.
For a long time, with its unique geostrategic advantages, Egypt has been a "bellwether" in Africa and the Arab world both economically and militarily. However, since the 1980s, Egypt's influence in the Arab world has gradually declined. In 2011, the impact of the color revolution made Egypt completely lose its leading position and power. Although the political situation in Egypt has improved since the new president, Abdel Fattah al-Sisi, took office, the country's economy has been under great pressure, partly because of the inherent economic shortcomings that have plagued the rulers.
First of all, there is no "good soil" suitable for economic development, and industrial development is very difficult. As we all know, Egypt is located along the Nile River, which sounds like a country rich in resources, but in fact, except for a few oases along the river such as the Nile Delta, most of the land in Egypt is desert. The desert land is barren, coupled with the impact of climate, the river flood period is relatively short, so the water resources within the territory are also relatively poor. In the case of such a lack of basic resources, Egypt no matter what industry it wants to develop can be said to be very difficult.
The second is the hesitancy of the Egyptian government and the slow pace of industrialization. As the maker of economic planning, the operation of the Egyptian government is often confusing. At first, Egypt advocated that the government should fully control the industrialization process, and did not give the private economy and foreign investment the opportunity to develop, which eventually led to frequent obstacles in the industrialization process. Since then, the Egyptian government has shifted from one extreme to the other, and began to let itself go, lacking the necessary control and guidance for the market. Either way, it will disrupt the order of the market economy and have a bad impact on industrialization, which has continued to this day. The government's lack of scientific and reasonable planning for industrialization is the root cause of its slow industrialization process in modern times.
Finally, the employment rate has remained low for many years, and the supply of talents exceeds the demand. Egypt has a population of more than 100 million, and there is no shortage of labor, but because of the imperfect industrial structure, there is no decent industrial project in the country. At the same time, Egypt has a very young population structure, 50 percent of the country is young. What they need most when they enter the society is job opportunities. This oversupply situation makes a large number of young people unemployed after graduation, and they are extremely easy to be used and incited, so as to choose to express their demands in improper ways. It is difficult for Egypt to maintain a stable development environment when the country's young people have begun to unite, and this creates a vicious circle.
In fact, Egypt's hand is not bad, as a population of more than 100 million, with thousands of years of ancient culture, Egypt's economic status has been in the forefront of the entire Africa. Although it has certain advantages and has been brilliant for a time in history with the help of external forces, in modern times, Egypt without cultural heritage has gradually lost its direction in the trend, and successive governments have failed to seize the opportunity for development, and the ancient Egypt of the past has disappeared. Now, the crisis in the Red Sea is getting worse and worse, and there is no sign of improvement in the short term, and the longer this situation is maintained, the future of Egypt is likely to face a desperate situation.
