How is Egypt extending its trade network?

One of the world’s oldest civilisations, Egypt has long been central to the development of the MENA region, integrating ideas from the Greek and Roman empires and building an extensive international trade network. The latter forms an important part of Egypt’s development policy today. Even during challenging times, the country has increasingly sought to engage with a range of global markets in order to boost its own prosperity.

History

The territory that is now Egypt has been inhabited by humans for over 7000 years. The Pharonic period, which defined ancient Egypt for many and remains a key part of the country’s identity, began around 3100 BCE. For some 3000 years, up until the arrival of the Romans in 30 BCE, Egypt was a global centre for a number of fields, including medicine, mathematics, technological development, law and economic organisation.

Egypt’s Arabic influence has added another layer to the country’s multifaceted culture and history. The conquest by Amr ibn Al As took place between 639 and 642 CE, and brought Egypt a new language, religion and culture through the process of Arabisation and Islamisation that took place over the subsequent centuries. From the 13th century until the 18th century, the Mamluk rulers of the Abbasid caliphate and the Ottoman Empire ruled Egypt. This period ended in 1798 with an expedition by Napoleon I, which aimed to disrupt British trading routes to India. In a bid to boost scientific enterprise, he sought dialogue and cooperation with the population and religious leaders.

For most of the first half of the 19th century Egypt was ruled by Muhammad Ali, the Ottoman Sultan’s viceroy. By the end of the century, European influence in Egypt culminated in British occupation, which began in 1882. Egypt gained independence from Britain in 1922, but the country’s influence came to a more definitive end with the overthrow of King Farouk in the 1952 revolution led by Gamal Abdel Nasser, who became Egypt’s second president in 1956. An emblematic, patriotic president, Nasser nationalised the Suez Canal Company to finance the construction of the Aswan High Dam on the Nile River. This resulted in the Suez Crisis, which involved French and British forces occupying the canal for geopolitical means, only to be diplomatically dismissed by the US and the Soviet Union.

Egypt’s large, rapidly expanding population is one of its greatest economic assets. It is the world’s 14th-most populous country, Africa’s third-most populous nation and the most populous in the Arab world After Nasser’s death in 1970 Anwar Sadat assumed the title of president until 1981, followed by Hosni Mubarak from 1981 until 2011. The current president, Abdel Fattah El Sisi, took office in 2014. The current prime minister and head of government in office since 2018 is Mostafa Madbouly.

During the El Sisi administration Egypt’s political disagreements have lessened, despite similar challenges faced by other countries in the region. However, a state of emergency was announced on April 10, 2017 and has been extended 12 times, the latest of which was in response to health and safety concerns amid the spread of Covid-19 in April 2020.

President El Sisi’s second term began in 2018 after he won 97% of the vote in the election, which saw a turnout of 41%. His re-election enabled the continuation of Egypt’s economic reform programme, which was backed by a $12bn loan from the IMF.

Population

Egypt’s large, rapidly expanding population is one of its greatest economic assets. It is the world’s 14th-most populous country, Africa’s third-most populous nation and the most populous in the Arab world. The country’s population passed the 100m threshold in February 2020 after maintaining a solid growth rate of approximately 2.6% per year. It is expected to reach 128m by 2030, according to US-based think tank The Brookings Institution. Per World Bank data, around 61% of the population is under the age of 30 and 34.2% are under the age of 15. While this has positive implications for the economy, it has presented challenges for public services. For example, the number of students attending primary schools increased by 40% between 2011 and 2016, and there are approximately 700,000 new entrants into the labour force every year. Population growth has largely been driven by improved health outcomes, longer average life expectancy and a consistently high fertility rate, which stood at 3.3 children per woman as of 2018.According to the World Bank, the country’s dependency ratio – the proportion of the population under the age of 15 or over the age of 64 – stood at 64% in 2018. In comparison, the average for the MENA region, excluding high-income countries, was 58%.

Over 60% of Egyptians live in urban areas and around 95% of the population resides within 20 km of the Nile River or the Nile Delta. Population growth is particularly driven by the expansion of the capital, Cairo, which has experienced a demographic boom over the past few decades. The National Population Council estimated that Cairo’s population has increased three-fold since 1980, to reach 20.9m in 2020. The council’s projections suggest that the capital’s population could rise to 26m by 2030 and exceed 30m by 2035. The country’s population density stood at 98 people per sq km in 2018, according to the World Bank, up from 83.1 people in 2010. This has placed growing pressure on the country’s infrastructure, which continues to present a challenge for policymakers (see Transport chapter).

Language & Ethnicity

Arabic is Egypt’s official language. English and, to a lesser extent, French are also prevalent in larger cities and within the business community. As Egyptian film and entertainment is popular throughout the Middle East, the locally spoken Arabic dialect, known as Masri, is widely understood. Some 90% of the population is Muslim, the vast majority of whom identify as Sunni. The remaining 10% of Egyptians are Christian, with a number of denominations present in the country, including Coptic, Maronite, Orthodox and Anglican.

Geography

Egypt is bordered by Libya to the west, Sudan to the south, and Israel and the Gaza Strip to the north-east, placing the country in the heart of the MENA region.

Egypt has a natural strategic advantage due to its location at the crossroads of Europe, Africa and Asia. The country lies between two major bodies of water: the Mediterranean Sea, which provides a route to Europe and North America, and the Red Sea, which continues on to the Indian Ocean. The two seas are linked by the Suez Canal, which stretches for 193 km and was completed in 1869. The canal is one of the world’s busiest shipping lanes, with approximately 50 ships passing through its waters per day.

In addition to its strategic location on the trade route between Europe and Asia, Egypt is able to generate revenue and employment from several natural resources, namely oil and gas, iron ore, phosphates and limestone. However, in spite of its relatively large size, the country’s natural mineral wealth is relatively sparse, particularly in comparison to its neighbours in the MENA region.

The country’s climate is characterised by low levels of rainfall throughout the year. However, there is a large temperature difference between summer and winter. Northern Egypt also experiences the khamseen, a dust storm lasting around 50 days that usually arrives in the spring between March and June, and can reach speeds of up to 140 km per hour.

Summer temperatures in the desert regions can reach an average high of 43°C, whereas the temperature in coastal areas generally peaks at around 30°C. In the winter, average temperatures range from a high of 18°C in the desert and 14°C on the coast, to a low of 0°C and 7°C, respectively. As a result of its dry climate, the majority of Egypt is made up of arid desert. There is approximately 36,500 sq km of irrigated land, which accounts for 3.6% of the country’s total territory.

Widely considered the longest river on earth, the Nile River extends into Africa at a length of 6850 km. Passing through the desert largely as Lake Nasser, the reservoir created as part of the Aswan Dam, the river provides a fertile lifeline for the country. In its final section between central Egypt and the Mediterranean Sea, the river’s floodplain allows for limited agricultural activity before opening up to form the Nile Delta north of Cairo. As a result, the vast majority of Egypt’s urban centres are located along the banks of the river and the Nile Delta.