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Sunday, January 20, 2013

How's the Egyptian Economy Doing?

I'm always looking for visible signs of the state of the economy when I travel.  I'll share a couple with you.  First, some bad news.

As we were driving close to downtown Cairo the other day on our way to the Citadel and Al-Azhar Park, we passed a long line of cars parked at the side of the road.  I'd have missed it but my friend pointed out that they were waiting for fuel.  They are in line to reach this Mobile station, with the Citadel in the background.
Egypt2-01 Egypt2-02

Each of the vehicles in that line runs on propane and there is a shortage of that fuel.  You might have read about the shortage of cooking propane last year in articles like this one from last April on a World Bank blog.  You might have also seen some references to shortages of gasoline, but that problem seems under control.  There is certainly no shortage of cars on the streets, and traffic is as bad as ever.

Now for some economic news you may not have seen.  Building construction appears to be booming.  I took this picture three years ago but the view had not changed much two years ago when the revolution began.

That patch of farmland at the edge of the Ring Road freeway was totally undeveloped when we left here in 2011.  Here is what it looks like today.

And there are plenty of similar examples to be found all around the city.  There is a new apartment building now topping out just behind ours.  Some people tell me that buildings are being put up in some places "without proper permits."  That sounds quite possible.  This is Egypt.

And some buildings that have been built don't appear to have high occupancy.  I suspect that part of that is due to people investing in real estate as a hedge against possible currency devaluation.  But I'd guess that the construction business is booming here relative to say, Las Vegas.

The tourist industry is definitely in recession, especially in the south.  This is a good time to book a trip here as there are bargains available.

I've also heard some reports that factories here that manufacture for the European market are receiving orders for shorter runs, like three months versus a year.  That makes it harder to go to a bank for a loan or to make commitments to employees.  But overall, people found 2012 a year of improvement and are cautiously optimistic for the future.

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