Reference no: EM131732487

Revolution in Egypt Summary This case explores the recent revolution in Egypt, particularly, the economic and political factors that led to the uprising. The beginning of the case chronicles Egypt's significant economic progress during the 2000s thanks to a series of economic reforms implemented by the government of Hosni Mubarak in 2004. As a result of these reforms, Egypt’s exports nearly tripled from 2004 to 2010, foreign direct investment more than doubled from 2004 to 2008, and overall unemployment fell during the same time period. However, in Egypt, not everything was as it seemed. Despite the economic advances, inflation continued to plague the country and the gap between the country’s rich and poor remained a serious problem. In addition, the global economic slowdown in 2008-2009 resulted in a sharp drop in tourism and a decline in earnings from the Suez Canal. At the same time, on the political front, Egypt was characterized as an autocratic state during President Mubarak's reign. Mubarak had been in power for more than a quarter of a century, and the government was highly corrupt. While elections were held, they were not free and fair. Opposition parties were kept in check by constant police harassment. Together, these challenges caused economic and political angst in the country. In an unprecedented move, young Egyptians took to social media, such as Facebook and Twitter, to cause a revolution in the country, which ultimately resulted in the collapse of Mubarak's regime in 2011. Today, Egypt’s political and economic future remains uncertain. Muslim Brotherhood leader Mohamed Morsi was removed from office in 2013, and an interim government was installed. As of early 2014, this government was in power. Discussion Questions QUESTION 1: What were the underlying causes, economic and political, of the collapse of the Mubarak regime? QUESTION 2: What do you think the Egyptian government needs to do in order to get the economy growing again and to attract foreign capital? What are the risks to the government of taking such actions? QUESTION 3: What dangers do you see in the current trajectory of the Egyptian economy? What are the implications of these dangers for foreign companies that might consider doing business in Egypt? What do you think it would take to encourage more foreigners to visit, invest, and do business in Egypt? Would such inward investment be good for the Egyptian economy? QUESTION 4: Political risks in Egypt seem to be increasing again, and the country seems to be retreating from democracy, largely due to intervention by the military. As a manager in an international business, how would the current turmoil and political uncertainty in Egypt influence your investment decisions, and what does this mean for the future of the Egyptian economy?