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Egypt upheaval mars hopes of end to economic woes

Kuwait offered $4 billion in cash, loans and fuel, with Saudi Arabia contributing $5 billion and the United Arab Emirates another $3 billion.

But Cunningham warned that, while welcome, the cash injection was not a long term solution.

“We’re still talking plasters and bandages. The challenges are enormous and they are structural. Egypt’s economy has been badly managed for decades, and it didn’t improve under Morsi.”

Illustrating the severity of the problem, the latest data from Egypt’s official statistics agency shows that unemployment jumped after Mubarak’s ouster and then rose steadily over the next two years to reach a record 13.2 percent in March.

Problems Egypt’s new rulers will have to confront if they are to reverse the inexorable decline include corruption, poor education, a bloated public sector, low productivity and unsustainable food and fuel subsidies.

“They need to fix the entire system,” said Ahmed Galal, head of the Eco Research Forum.

“It’s going to be difficult to do, but it’s doable, with a lot of dedication,” he told AFP, adding that stability and appointing a competent government will be crucial if Egypt’s economic woes are to be resolved.

This week Hazem al Beblawi, a former finance minister and accomplished economist with long experience of working with international financial institutions, was named prime minister.

But his task of forming a national unity government was immediately complicated by Morsi’s Muslim Brotherhood rejecting any offer of jobs in the new cabinet.

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US intelligence firm Stratfor believes the instability goes far beyond political divisions.

It said growing poverty and joblessness, “arguably among the root causes of the uprising in 2011”, was part of a “swelling trend” that motivated the recent protests.

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