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Egypt not alone in its economic problems

[ 2011-02-09 11:05]     字號 [] [] []  
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Egypt not alone in its economic problems

This is the VOA Special English Economics Report.

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 and 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 2008.

Fariborz Ghadar heads the Center for Global Business Studies at Penn State University. He says poverty in Egypt remains high -- up to 40 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 fast growing. 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.

FARIBORZ GHADAR: "Europe and the US together generate three million jobs. [The] Middle East alone to keep their youth employed has to generate six, seven, eight million jobs. So they have to produce two or three times as many jobs as the total US and total European economies."

Fariborz Ghadar says protests could spread to bigger economies.

FARIBORZ GHADAR: "So the mismanagement of the Iranian economy could in fact see a backlash of the Iranian population because their food prices are going up too. Their inflation is going up, too."

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.

DEBORAH HEWITT: "With economic growth and expansion comes the desire for more political freedom. And the two go hand in hand. They feed on each other."

And that's the Special English Economics Report written by Mario Ritter. I'm Steve Ember.

Related stories:

Young people driving Middle East protests

Israel fears unrest in Egypt could jeopardize peace treaty

US Military Chief Says Aid to Egypt Should Continue

International Monetary Fund debates internal reforms, global economic growth

(來源:VOA 編輯:崔旭燕)

 
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