The Statue of Liberty New York City, U.S.A.

Lions guard the Kasr-el-Nil Bridge

The government has struggled to prepare the economy for the new millennium through economic reform and massive investments in communications and physical infrastructure. Egypt has been receiving U.S. foreign aid (since 1979, an average of $2.2 billion per year) and is the third-largest recipient of such funds from the United States following the Iraq war. Its main revenues however come from tourism as well as traffic that goes through the Suez Canal.

Economic conditions have started to improve considerably after a period of stagnation from the adoption of more liberal economic policies by the government, as well as increased revenues from tourism and a booming stock market. In its annual report, the IMF has rated Egypt as one of the top countries in the world undertaking economic reforms. Some of the major steps concerning economic reforms taken by the new government since 2003 include a dramatic slashing of customs and tariffs, a new taxation law implemented in 2005 that decreases corporate taxes from 40% to the current 20%, resulted to the stated 100% increase in tax revenue by the year 2006.

FDI (Foreign Direct Investment) into Egypt has increased considerably in the past few years due to the recent economic liberalization measures taken by minister of investment Mahmoud Mohieddin, exceeding $6 billion in 2006. Egypt is slated to overcome South Africa as the highest earner of FDI on the African continent in 2007.

Although one of the main obstacles still facing the Egyptian economy is the trickle down of the wealth to the average population, many Egyptians criticize their government for higher prices of basic goods while their standards of living or purchasing power remains relatively stagnant. Often corruption is blamed by Egyptians as the major impediment of not feeling the benefits of the newly attained wealth. Although major reconstruction of the infrastructure in the country is promised by the government, with a large portion of the sum payed for the newly acquired 3rd mobile license ($3billion) by Etisalat, slated to be pumped into the country’s railroad system after public outrage against the government for recent disasters that took place in 2006 claimed more than 100 lives.

The most well known examples of Egyptian companies that have expanded regionally and globally are the Orascom Group and Raya. The IT sector has been expanding rapidly in the past few years, with many new start-ups conducting outsourcing business to North America and Europe, operating with companies such as Microsoft, Oracle and other major corporations, as well as numerous SME’s. Some of these companies are the Xceed Contact Center, Raya Contact Center, E-Group Connections and C3 along with other start ups in that country. The sector has been stimulated by new Egyptian entrepreneurs trying to capitalize on their country’s huge potential in the sector, as well as constant government encouragement.

The Egyptian Parliament

Concerns were once again expressed after the 2005 presidential elections about government interference in the election process through fraud and vote-rigging, in addition to police brutality and violence by pro-Mubarak supporters against opposition demonstrators. This poses major questions about the government’s purported commitment to democracy.

As a result, most Egyptians are skeptical about the process of democratization and the role of the elections. Less than 25 percent of the country’s 32 million registered voters (out of a population of more than 78 million) actually turned out for the 2005 elections. Newspapers, however, have exhibited an increasing degree of freedom in criticizing the president, and the results of the 2005 parliamentary elections, which saw Islamist candidates such as the banned Muslim Brotherhood winning seats, indicate that a change of some sorts may be underway. A proposed change to the constitution would limit the president to two seven-year terms in office.

Pyramids of Giza

The First Intermediate Period ushered in a time of political upheaval for about 150 years. Stronger Nile floods and stabilization of government, however, brought back renewed prosperity for the country in the Middle Kingdom c. 2040 BC, reaching a peak during the reign of Pharaoh Amenemhat III. A second period of disunity heralded the arrival of the first alien ruling dynasty in Egypt, that of the Semitic Hyksos. The Hyksos invaders took over much of Lower Egypt around 1650 BC, and founded a new capital at Avaris. They were eventually driven out by an Upper Egyptian force led by Ahmose I, who founded the Eighteenth Dynasty and relocated the capital from Memphis to Thebes.

The New Kingdom (c.1550−1070 BC) began with the Eighteenth Dynasty, marking the rise of Egypt as an international power that expanded during its greatest extension to an empire as far south as Jebel Barkal in Nubia, and included parts of the Levant in the east. This period is known for some of the most well-known Pharaohs, including Hatshepsut, Thutmose III, Akhenaten and his wife Nefertiti, Tutankhamun and Ramesses II. The first known self-conscious expression of monotheism came during this period in the form of Atenism. Frequent contacts with other nations brought in new ideas in the New Kingdom.

The Nile River in Egypt

History

The Nile Valley has been a site of continuous human habitation since at least the Paleolithic era. Traces of these early peoples appear in the form of artifacts and rock carvings along the terraces of the Nile and in the desert oases. In the 10th millennium BC, a grain-grinding culture using the earliest type of sickle blades had been replaced by another culture of hunter-gatherers and fishers using stone tools. Climate changes and/or overgrazing around 8000 BC began to desiccate the pastoral lands of Egypt, eventually forming the Sahara. Early tribal peoples migrated to the Nile River where they developed a settled agricultural economy and more centralized society.

By about 6000 BC, organized agriculture and large building construction had appeared in the Nile Valley. During the Neolithic, several predynastic cultures developed independently in Upper and Lower Egypt. The Badarian culture and the successor Naqada series are generally regarded as precursors to Dynastic Egyptian civilization. The earliest known Lower Egyptian site, Merimda, predates the Badarian by about seven hundred years. Contemporaneous Lower Egyptian communities coexisted with their southern counterparts for more than two thousand years, remaining somewhat culturally separate, but maintaining frequent contact through trade. The earliest known evidence of Egyptian hieroglyphic inscriptions appear during the predynastic period on Naqada III pottery vessels, dated to about 3200 BC.

A unified kingdom was founded circa 3150 BC by King Menes, giving rise to a series of dynasties that ruled Egypt for the next three millennia. Egyptians subsequently referred to their unified country as tAwy, meaning ‘Two Lands’; and later km.t (Coptic: Kīmi), the ‘Black Land’, a reference to the fertile black soil deposited by the Nile river. Egyptian culture flourished during this long period and remained distinctively Egyptian in its religion, arts, language and customs. The first two ruling dynasties of a unified Egypt set the stage for the Old Kingdom period, c.2700−2200 BC., famous for its many pyramids, most notably the Third Dynasty pyramid of Djoser and the Fourth Dynasty Giza Pyramids.