Occupying the north-east corner of the African continent, Egypt is bisected by the highly fertile Nile Valley, where most economic goings-on take place. The Egyptian economy mainly depends on agriculture, media, petroleum exports, textiles and tourism. The completion of the Aswan High Dam in 1971 and the resulting Lake Nasser have altered the age-old place of the Nile River in the agriculture and ecology of Egypt. It's abhorrently overpopulated, and there is neither sufficient agricultural land, nor water resources to uphold the ever increasing population currently estimated at about 70 million, which persist to overtax resources and stress the economy.
A chain of International Monetary Fund arrangements, together with massive external debt relief resulting from Egypt's involvement in the Gulf War alliance, helped Egypt improve its macro-economic performance during the 1990s. Egypt is mainly dependent upon foreign aid, and remittances from citizens working abroad in oil-rich countries. There are more than 3 million Egyptians working abroad, mainly in Saudi Arabia, the Persian Gulf and Europe.
Egypt's effort to industrialize the country started in the 19th century, under Muhammed Ali, the then ruler. Though machines and technology were imported, often at a high cost, local industries gradually developed and by World War 1, textile industries had gained a strong foothold. At present, Egypt's industries include the production of cement, iron and steel, chemicals, fertilizers, tobacco, canned foods, rubber products, refined sugar, cottonseed oil, small metal products, shoes and furniture. Mining has also emerged as a vital industry in the last 20 years with products like crude petroleum, salt, phosphate, iron and manganese.
In the last 30 years a lot of reformation has been made to the highly centralized economy inherited from President Nasser. Though the rate of structural reforms, for instance privatization and new business legislation, has been slower than the IMF envisioned, Egypt's steps toward a more market-oriented economy have encouraged increased foreign investment. It has made substantial progress in growing its legal, tax and investment infrastructure. In 2005 personal, corporate tax rates and energy subsides were reduced and several enterprises privatized by Prime Minister Ahmed Nazif.
Egypt has been rated as one of the top countries in the world undertaking economic reforms by the IMF in their annual report. Some of the steps taken by the government include a dramatic slashing of customs and tariffs, a new taxation law implemented in 2005 that decreases corporate taxes from 40% to the current 20%, resulted to the stated 100% increase in tax revenue by the year 2006. Foreign Direct Investment into Egypt has also increased considerably in the past few years making Egypt the highest earner of FDI on the African continent in 2008. The stock market boomed, with the GDP rising about 5% per year in 2005-06. Even with these achievements, the government has failed to raise the standard of living for the average Egyptians, and has had to continue providing subsidies for basic necessities.
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