Egypt Not Alone in Its Economic Problems

I'm Alex Villarreal with the VOA Special English Economics Report, from voaspecialengli... | / voalearningenglish
Egypt is the biggest of the nations hit by recent protests in North Africa and the Middle East. One of the causes of this spreading wave of popular dissatisfaction is a lack of economic progress.Egypt is not a major oil exporter. Its economy is not big enough to affect world economic growth. But important pipelines cross Egypt. And Egypt controls the Suez Canal. About eight percent of world shipping passes through this link between Europe and Asia. That includes two million barrels of oil each day, mainly to Europe. Many experts say they expect the canal to remain open. Still, concerns about the Suez have pushed oil prices to their highest levels since two thousand eight. Fariborz Ghadar heads the Center for Global Business Studies at Penn State University. He says poverty in Egypt remains high -- up to forty percent in some areas.Yet Egypt is not alone. Foreign investors worry about corruption, mismanagement and security problems across North Africa and the Middle East. Every year millions of young people enter the job market. Populations are young and growing fast. In Egypt, the economy grew about five percent last year -- too little growth to create enough jobs. Fariborz Ghadar says the United States in a good year creates fewer than two million jobs. He says Europe and the US together generate three million jobs. Middle Eastern countries have to generate up to eight million jobs just to keep their youth employed. Fariborz Ghadar says protests could spread to bigger economies.He says the mismanagement of the Iranian economy could cause protests by the Iranian population because food prices and inflation are increasing. In recent years, the World Bank has praised Egypt for cutting barriers to trade. But economist Deborah Hewitt at the College of William & Mary in Virginia says private foreign investment remains weak. She says those investments have grown quickly from almost nothing eight years ago. But they are still not enough to lift the economy. Professor Hewitt says Egypt could look to reforms in Morocco that have appealed to investors. Morocco has strengthened its education system and invested in roads, ports and electric power. She says investments like these not only put people to work. They also create the basis for future economic and political development. For VOA Special English I'm Alex Villarreal.
(Adapted from a radio program broadcast 04Feb2011)