22-8-2023
The Impact of Political and Economic
Factors on Egypt in the Wake of COVID-19
Global Supply Chain
Osama Mohamed Hassan EL-Roby
No: 19125463
Introduction:
The emergence of the COVID-19 pandemic in late 2019 set off a global crisis with far-reaching effects on
economies, societies, and political systems. Egypt, renowned for its historical significance, grappled with
an intricate web of challenges emanating from the confluence of political and economic factors shaped
by this crisis.
Economic Turmoil and Resilience:
1. Economic Contraction and GDP Growth: The pandemic triggered a severe economic contraction in
Egypt. The imposition of lockdowns and travel restrictions led to a GDP growth decline of approximately
3.5% in 2020, a stark contrast to the projected pre-pandemic growth rate of around 5.9%. [Source:
World Bank]
2. Tourism and Foreign Exchange Earnings: Egypt's tourism sector, accounting for about 12% of the
country's GDP, suffered immensely. Inbound tourist arrivals plummeted by over 70% in 2020, translating
to a loss of billions in revenue. [Source: Central Agency for Public Mobilization and Statistics (CAPMAS)]
3. Remittances and Employment Abroad: Remittances, constituting a significant part of Egypt's
economy, dropped due to job losses in key remittance-sending countries. Remittances declined by 9% in
2020, impacting income and consumption patterns. [Source: World Bank]
4. Government Spending and Healthcare: Egypt augmented its healthcare spending in response to the
pandemic, with allocations to the health sector increasing by nearly 50%. This commitment, while
necessary for public health, posed challenges to the already strained budget. [Source: Ministry of
Finance, Egypt]
Political Landscape and Implications:
1. Governance and Transparency: Concerns over government transparency emerged as authorities faced
criticism for their handling of the crisis. Questions about the accuracy of COVID-19 data and the
effectiveness of measures challenged public trust. This spotlight underscored the importance of
transparent governance.
2. Socio-Political Unrest and Public Dissatisfaction: The pandemic-induced economic downturn
intensified social disparities. Unemployment rose to 9.6%, with youth unemployment surpassing 25%.
[Source: CAPMAS]
3. Geopolitical Relationships and Energy Sector: Egypt's energy sector, which plays a pivotal role in its
geopolitical stance, faced turbulence. Fluctuations in oil prices and shifts in energy demand disrupted
Egypt's energy export revenues and its position in energy negotiations and international alliances.
Navigating a Complex Reality:
1. Policy Responses and Economic Recovery: Egypt's government implemented a comprehensive package
of measures, including a $6.4 billion stimulus plan to support affected sectors. The "Decent Life"
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initiative aimed at improving living conditions for the most vulnerable, with an investment of $7.1
billion. [Source: Ministry of International Cooperation, Egypt]
2. Social Safety Nets and Poverty Alleviation: To counteract rising poverty, Egypt expanded its "Takaful
and Karama" cash transfer program, benefiting over 2.7 million families. Additionally, subsidies on food
items were extended to mitigate the impact of rising prices on households. [Source: Ministry of Social
Solidarity, Egypt]
3. Diplomatic Adaptations and International Collaboration: COVID-19 reshaped Egypt's international
engagement. A prime example is the tripartite negotiation on the Grand Ethiopian Renaissance Dam,
which was influenced by changing global dynamics due to the pandemic's effects on regional priorities.
Conclusion:
Forging a Resilient Future: Egypt's Post-Pandemic Trajectory
The COVID-19 pandemic thrust Egypt into an intricate and evolving landscape of challenges. The
intricate interplay between political and economic factors underscores the complexity of Egypt's
recovery journey. Strategic policy decisions, collaborative international diplomacy, and a resilient
domestic approach will sculpt Egypt's path forward in a world reshaped by the pandemic's enduring
impact.
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