As It Shifts, Egypt's Economy Retains Some Oddities07:46


Nearly 30 years in office, Egypt's President Hosni Mubarak has become a strong proponent of a market economy. Only vestiges remain of the state socialism that for decades defined Egypt.

Enterprises like banks that were once state-owned are now firmly in private hands. Foreign investment, construction and tourism are growing and Egypt's stock exchange, said to be the oldest in the Middle East, is thriving.

But Egypt's economy has some unusual elements, at least when looking at them with a Western eye.

Consider Egypt's army, which serves as a manufacturer of goods consumed by the Egyptian people. In the Sahara region, for example, the military has a factory that produces what some say is the best-tasting bottled water in Egypt.

Retired Maj. Gen. Mohamed Kadry Said says a lot of what the army manufactures, such as cement, it deems to be strategic.

Said, who is a military adviser to the Al-Ahram Center for Political and Strategic Studies in Cairo, says the army believed the move would prevent foreign companies from controlling cement prices.

Yet the days of the army acting as an economic power in Egypt are drawing to a close, the retired general says. He estimates that at least 85 percent of the economy is now privatized.

"I think it [army manufacturing] is shrinking because this point is now sensitive with investors," he says, adding that investors worry the army or police will put undue pressure of them if they compete.

The booming black market in Egypt is another area of concern, certainly to Egyptian businessmen.

Those include Sammy, who sells clothes from his store near Cairo's Ataba Square. (He would only give his first name.) Sammy  complains that the hundreds of illegal vendors who crowd the sidewalk and street outside his door for up to 18 hours each day have severely cut into his business.

"I pay rent, I pay electricity, I pay sales taxes, OK?" Sammy says. The illegal vendors don't.

"I sell Egyptian clothes; they sell cheaper Chinese ones. So they are destroying the Egyptian economy, the internal economy," Sammy says.

Surprisingly, he doesn't think the answer is the frequent police raids here that chase the vendors away temporarily.

He says it's better to give them a legal place to set up and work, rather than taking away their livelihoods, which he fears will drive up crime.

NPR's Soraya Sarhaddi Nelson is based in Cairo and covers the Arab world from the Middle East to Africa. On Monday's Morning Edition, she reported about the growing number of Egyptians who are tired of Mubarak's iron-fisted rule and hope next Sunday's parliamentary elections will produce some change. We're expecting more reports from her later this week about life and the pace of change in Egypt.

Photos: Egypt Economy

Despite its socialist roots, Egypt is now primarily a free-market economy with some state control. Here, a belt salesman carries his product around the market in the Ataba district of Cairo. (All photos by Holly Pickett for NPR/Holly Pickett for NPR)
Surrounded by shops, Cairenes buy and sell black market goods in the middle of a street in the Ataba district. The vendors have set up their stalls illegally and do not pay rent, ultilities or taxes. (Holly Pickett for NPR)
Embroidered shirts are available on the streets of the Ataba district. The black market is a concern to Egyptian businessmen doing business legally, as it cuts into their profits. (Holly Pickett for NPR)
A vendor holds up a shirt for customers in the Ataba market. (Holly Pickett for NPR)
A vendor moves a portable table full of goods. Vendors open the sack at the top to make it easy to run in case the police come to clear them and their merchandise away. (Holly Pickett for NPR)
At the other end of the shopping spectrum, Citystars is Cairo's most upscale shopping mall. It contains 643 stores, two indoor theme parks and a 21-screen movie theater. (Holly Pickett for NPR)
Shoppers walk past the Boss store at Citystars. In addition to upscale shopping, the Citystars complex also features three hotels, and residential and office towers. (Holly Pickett for NPR)
Helping to fuel Egypt's economy is the stock exchange in Cairo, said to be the oldest in the Middle East. (Holly Pickett for NPR)
A woman works in her cubicle at the Egyptian Exchange in downtown Cairo. The exchange dates back more than 100 years — the Alexandria Stock Exchange was established in 1883, while the Cairo Stock Exchange was established in 1903. The two have since merged. (Holly Pickett for NPR)
Tourism Minister Zoheir Garana, who hopes to increase the number of tourists to Egypt, has been accused of having a conflict of interest. His family business is one of the largest tourist companies in the country. (Holly Pickett for NPR)

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