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Egypt Case Study

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  • November 2012
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Egypt Case Discussion Questions:
1)How would you describe the economic policy that Egypt implemented during 2004-2008? Do you think that this policy helped boost Egypt’s Growth Rate? Why? a.I would describe the policy that was implemented in 2004-2008 as a reformation of the pre-existing policies that were hindering the potential of both the economic growth and the foreign direct investment in Egypt. Examples of the changes Prime Minster Ahmed Nazif’s new policy made are; deep tariff cuts, tax cuts and changed investment regulation allowing for more direct foreign investment in the area. After the implementation of these changes the Egyptian economy saw an increase in economic growth, almost doubling previous levels. Also foreign businesses such as Oracle and Microsoft began investing in the area and began building new office buildings. The reformed economic policies have unquestionably helped boost Egypt’s growth rate as it provided more jobs and allowed foreign direct investment, bringing well known businesses into Egypt.

2)How vulnerable is the Egyptian economy to a slowdown in global economic activity such as that which occurred in 2008-2009? a.I would consider the Egyptian economy very vulnerable to global economic activity. The implementation of the reforms helped the economic standing of Egypt, but it didn’t completely solve all of Egypt’s political and economic difficulties. With growth of Egypt driven by foreign direct investment and tourism, when the world economy started to enter a recession Egypt saw many of its new growth drivers begin to slow. However, if this is portrayed as a bad thing I personally do not necessarily see this as a bad thing because a country will generally be more prosperous and see more economic growth when there is foreign investment in the area. Yet, when there is foreign investment it links the host country to other countries, possibly on a global level. Thus, exposing said country to a vulnerability to global...

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