Economy: Egyptian govt’s new challenge

Since the 2011 revolution the Egyptian economy has gone from bad to worse.

BBC Online

Unemployment is up, so is the budget deficit, job creation is virtually non-existent and the Egyptian pound has lost much of its value. And matters are made even worse by the general lack of security in the country. As part of her series of reports looking at the challenges facing Egypt today Shaimaa Khalil focuses on the Egyptian economy.

If you look at a map of Egypt, the Nile Delta is a splash of green between Cairo and its second largest city Alexandria.

Of course there’s a lot of agriculture there but the Delta is also the industrial heartland of the country.

El Mahalla El Kubra, or Mahalla, as it’s more widely known, is Egypt’s textile capital.

Until recently cotton textiles accounted for around a third of Egypt’s industrial production. But there’s been a massive decline and two years after the revolution many factories in Mahalla are barely functioning.

Most of these factories are government owned, but in the past two years the government has been running out of money. Foreign investment has all but dried up because of the unstable political and security situation in the country.

As a result the factories have not had the capital investment they need. Huge machines are lying idle for want of parts and maintenance. The workers too aren’t getting paid on time. The result has been numerous strikes, further stalling production.

The Samanoud textiles factory is one of the biggest in Mahalla. In the factory, workers stand in front of rows of noisy looms weaving the cotton cloth.

Most of them have worked in the factory for more than two decades — but have now become disillusioned.

“We’re worse off now … We don’t get paid on time. We’ve got people to support; we’ve got school fees to pay,” Mostafa Abdullah, a worker in the Samanoud factory said.

You hear this kind of story across Egypt, not just in big factories but also in the smaller, unofficial enterprises.