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GDP (FY 2002-03): $78.7 billion.
Annual growth rate (FY 2002-03): 2.5%.
Per capita GDP (2001-02): $1,470.
Natural resources: Petroleum and natural gas, iron ore, phosphates, manganese, limestone, gypsum, talc, asbestos, lead, zinc.
Agriculture: Products--cotton, rice, onions, beans, citrus fruits, wheat, corn, barley, sugar.
Industry: Types--food processing, textiles, chemicals, petrochemicals, construction, light manufacturing, iron and steel products, aluminum, cement, military equipment.
Trade (FY 2001-02): Exports--$6.6 billion: petroleum, clothing and textiles, cotton, fruits and vegetables, manufactured goods. Major markets--EU, U.S., Middle East, Japan. Imports--$14.6 billion: machinery and transport equipment, petroleum products, livestock, food and beverages, paper and wood products, chemicals. Major suppliers--EU, U.S., Japan.
Under comprehensive economic reforms initiated in 1991, Egypt has relaxed many price controls, reduced subsidies, and partially liberalized trade and investment. Manufacturing is still dominated by the public sector, which controls most heavy industry. A process of public sector reform and privatization, that began in the mid-1990s and moved substantial public sector assets into private sector hands, has slowed since the year 2000. Agriculture, mainly in private hands, has been largely deregulated, with the exception of cotton and sugar production. Construction, nonfinancial services, and domestic marketing are largely private. This has promoted a steady increase of GNP and the annual growth rate. Among Arab countries, Egypt's GDP is second only to Saudi Arabia's. However, the Egyptian economy relies heavily on tourist, oil and gas, and Suez Canal revenues, all of which are vulnerable to outside factors. The tourism sector suffered tremendously following a terrorist attack on tourists in Luxor in October 1997, the 2000-01 Gulf War, and the September 11, 2001 terrorist attacks against the United States, affecting the economy as a whole.
Approximately one-third of Egyptian labor is engaged directly in farming, and many others work in the processing or trading of agricultural products. Nearly all of Egypt’s agricultural production takes place in some 2.5 million hectares (6 million acres) of fertile soil in the Nile Valley and Delta. Some desert lands are being developed for agriculture, including the ambitious Toshka project in Upper Egypt, but some other fertile lands in the Nile Valley and Delta are being lost to urbanization and erosion.
Warm weather and plentiful water permit several crops a year. Further improvement is possible, but land is worked intensively and yields are high. Cotton, rice, wheat, corn, sugarcane, sugarbeets, onions, and beans are the principal crops. Increasingly, a few modern operations are producing fruits, vegetables and flowers, in addition to cotton, for export. While the desert hosts some large, modern farms, more common traditional farms occupy one acre each, typically in a canal-irrigated area along the banks of the Nile. Many small farmers also have cows, water buffaloes, and chicken, although larger modern farms are becoming more important.
The United States is a major supplier of wheat, corn, and soybean products to Egypt, almost all through commercial sales. Egypt is, in fact, traditionally the U.S.'s largest market for wheat sales. U.S. agricultural sales to Egypt average $1 billion annually. U.S. food assistance programs to Egypt ended in 1992 as Egypt became more prosperous. Egypt continues to receive modest food assistance through the World Food Program and from France.
"Egypt," wrote the Greek historian Herodotus 25 centuries ago, "is the gift of the Nile." The land's seemingly inexhaustible resources of water and soil carried by this mighty river created in the Nile Valley and Delta the world's most extensive oasis. Without the Nile, Egypt would be little more than a desert wasteland.
The river carves a narrow, cultivated floodplain, never more than 20 kilometers wide, as it travels northward toward Cairo from Lake Nasser on the Sudanese border, behind the Aswan High Dam. Just north of Cairo, the Nile spreads out over what was once a broad estuary that has been filled by riverine deposits to form a fertile delta about 250 kilometers wide (150 mi.) at the seaward base and about 160 kilometers (96 mi.) from south to north.
Before the construction of dams on the Nile, particularly the Aswan High Dam (started in 1952, completed in 1970), the fertility of the Nile Valley was sustained by the water flow and the silt deposited by the annual flood. Sediment is now obstructed by the Aswan High Dam and retained in Lake Nasser. The interruption of yearly, natural fertilization and the increasing salinity of the soil has been a manageable problem resulting from the dam. The benefits remain impressive: more intensive farming on millions of acres of land made possible by improved irrigation, prevention of flood damage, and the generation of billions of low-cost kilowatt hours of electricity.
The Western Desert accounts for about two-thirds of the country's land area. For the most part, it is a massive sandy plateau marked by seven major depressions. One of these, Fayoum, was connected about 3,600 years ago to the Nile by canals. Today, it is an important irrigated agricultural area.
In addition to the agricultural capacity of the Nile Valley and Delta, Egypt's natural resources include petroleum, natural gas, phosphates, and iron ore. Crude oil is found primarily in the Gulf of Suez and in the Western Desert. Natural gas is found mainly in the Nile Delta, off the Mediterranean seashore, and in the Western Desert. Oil and gas accounted for approximately 7% of GDP of fiscal year 2000-01. Export of petroleum and related products amounted to $2.7 billion in fiscal year 2002-03.
Crude oil production has been in decline for several years, from a high of more than 920,000 barrels per day (BPD) in 1995 to less than 631,000 BPD. To minimize the growing domestic demand of petroleum products (about 460,000 BPD in 2001) Egypt is encouraging the production of natural gas. Over the last 5 years, production of natural gas has increased by approximately 75% to reach more than three billion cubic feet per day (BCFD) in August 2003.
Over the last 20 years, more than 217 oil and gas exploration agreements have been signed and multinational oil companies spent more than $27 billion in exploration companions. As of September 2003, crude oil reserves are now estimated at 2.8 billion barrels, and proven natural gas reserves are estimated at 58.5 trillion cubic feet (TCF) with probable additional reserves totaling another 40-60 TCF. Texas-based Apache Oil Company is the largest American investor in Egypt, with a total investment of more than $2.0 billion since 1996.
Egypt's excess of natural gas will more than meet its domestic demand for many years to come. The Ministry of Petroleum has established expanding the Egyptian petrochemical industry and increasing exports of natural gas as its most significant strategic objectives.
Egypt and Jordan established the Eastern Gas Company to export natural gas to Jordan. Late summer 2003, Egypt began exporting gas to Jordan via a new pipeline from El Arish on Egypt’s north Sinai cost to the Jordanian city of Aqaba. In the first year, gas exports to Jordan are expected to generate gross revenues of $70 million, increasing to $200 million annually by 2005 as the pipeline is extended throughout Jordan.
Transport and Communication
Transportation facilities in Egypt are centered in Cairo and largely follow the pattern of settlement along the Nile. The main line of the nation's 4,800-kilometer (2,800-mi.) railway network runs from Alexandria to Aswan. The well-maintained road network has expanded rapidly to over 21,000 miles, covering the Nile Valley and Delta, Mediterranean and Red Sea coasts, the Sinai, and the Western oases.
Egypt Air provides reliable domestic air service to major tourist destinations from its Cairo hub, in addition to overseas routes. The Nile River system (about 1,600 km. or 1,000 mi.) and the principal canals (1,600 km.) are important locally for transportation. The Suez Canal is a major waterway of international commerce and navigation, linking the Mediterranean and Red Seas. Major ports are Alexandria, Port Said, and Damietta on the Mediterranean, and Suez and Safraga on the Red Sea.
Egypt has long been the cultural and informational center of the Arab world, and Cairo is the region's largest publishing and broadcasting center. There are eight daily newspapers with a total circulation of more than 2 million, and a number of monthly newspapers, magazines, and journals. The majority of political parties have their own newspapers, and these papers conduct a lively, often highly partisan, debate on public issues.
Egyptian ground-broadcast television (ETV) is government controlled and depends heavily on commercial revenue. ETV sells its specially produced programs and soap operas to the entire Arab world. In addition to Egyptian programming, the Middle East Broadcast Company, a Saudi television station transmitting from London (MBC), Arab Radio and Television (ART), Al-Jazira television, and other Gulf stations as well as Western networks such as CNN and BBC, provide access to more international programs to Egyptians who own satellite receivers.
ETV has two main channels, six regional channels, and three satellite channels. Of the two main channels, Channel I uses mainly Arabic, while Channel II is dedicated to foreigners and more cultured viewers, broadcasting news in English and French as well as Arabic.
Egyptian Satellite channels broadcast to the Middle East, Europe, and the U.S. East Coast. In April 1998, Egypt launched its own satellite known as NileSat 101. Seven specialized channels cover news, culture, sports, education, entertainment, health, and drama. A second, digital satellite, Nilesat 102, was launched in August 2000. Many of its channels are rented to other stations.
Three new private satellite-based TV stations were launched in November 2001, marking a great change in Egyptian government policy. Dream TV 1 and 2 produce cultural programming, broadcast contemporary video clips and films featuring Arab and international actors, as well as soap operas; another private station focuses on business and general news. Both private channels transmit on NileSat.
Radio in Egypt almost all government controlled, using 44 short-wave frequencies, 18 medium-wave stations, and four FM stations. There are seven regional radio stations covering the country. Egyptian Radio transmits 60 hours daily overseas in 33 languages and three hundred hours daily within Egypt. In 2000, Radio Cairo introduced new specialized (thematic) channels on its FM station. So far, they include news, music, and sports. Radio enjoys more freedom than TV in its news programs, talk shows and analysis.