Abstract With its large population, history and culture, Egypt is a leader in the Arab world. The current government is headed by Prime Minister Ahmed Nazif, who was appointed by President Hosni Mubarak in 2004 with a brief to liberalise the nation’s economy. That brief was reconfirmed in 2005 when Mubarak won his fifth term in office on a mandate of continued liberalisation. The government has been awarded notable praise in its efforts thus far, having been nominated as most improved economy in terms of ease of doing business by the World Bank in 2008. Much of Nazif’s task involves dismantling the remnants of Nasser’s “Arab socialism”, which still defines a large part of Egypt’s economic structure. A significant portion of Egypt’s population (as high as 20% by some estimates) survives on less than $2 a day, and continues to depend on the state to subsidise basic necessities such as bread and fuel. These subsidies not only place a considerable burden on the state budget, but they also encourage corruption and profiteering. Bread shortages in the first half of the year led to social unrest, prompting the government to take immediate and concerted action to alleviate a potential crisis. The prospect for continued progress in the economy remains strong. Two issues on the horizon have the potential to affect this progress: an internal struggle of over the succession of President Mubarak and renewed labour unrest.
This chapter provides interviews with Prime Minister Ahmed Nazif; Romano Prodi, former Prime Minister of Italy; Dominic Asquith, UK ambassador to Egypt; and Naguib Sawiris, Chairman and CEO Orascom Telecom, while Susan C. Schwab, US Trade Representative, provides a viewpoint on the importance of free trade and US-Egypt cooperation.

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