According to the CIA World Factbook online, Egypt is a democracy. However, the government is highly centralized with the nation's President holding extensive executive powers. Egypt's President Mubarak has been in power since 1981 and is widely considered to have kept the country's internal situation stable. Stability is good for Egypt's citizens, good for the country and good for the economy. President Mubarak's most powerful and dangerous opposition comes from Islamic fundamentalists that would like to see the nation become a theocracy modeled on Iran. Mubaraj's secular government has gone to great lengths to extremist groups from employing terrorism as a tool to gain political power. This has resulted in a stable domestic situation that bodes well for starting a business -- in this case a professional services firm in Egypt.
Lack of significant progress on the goal of economic reform has limited foreign direct investment in Egypt since the mid-1990s. This has contributed to keeping the annual GDP growth rate in Egypt in the 2 percent to 3 percent range for the years 2001 through 2003. The countryßhas also had limited success in moving away from state owned or controlled sectors of the economy despite the government's promise of more free market-oriented policies. Egyptian officials in late 2003 and early 2004 once again proposed new privatization and customs reform measures, but in the opinion of the CIA, the Egyptian government is likely to pursue these initiatives cautiously and gradually to avoid a public backlash resulting from an increase in unemployment and a spike in inflation. A highly regulated economy is not what one wants to see when one is considering opening any new business.
Monetary pressures on an overvalued Egyptian pound led the government to allow the Egyptian currency to float freely in January 2003. This resulted in a quick and a sharp drop in the currency's value with consequent inflationary pre...