Oil spurs Egypt's economy, now turning a trade surplus
In Egypt, things are getting better. In fact, better is not the proper word: The once-ailing Middle East economy shows strong signs of getting well in a dramatic economic about-face. This is the gist of an internal, eyes-only World Bank report circulated at the end of 1980 on Egypt's fiscal well-being.
According to the report, the startling and perhaps unexpected improvement in Egypt's foreign-exchange earnings will move the country from a chronic balance-of-payments deficit, at the end of the fiscal year in March, to an estimated trading surplus. This will be a first for the Egyptian government since the fall of the monarchy in 1952.
Although the country has benefited from large, continuing foreign loans and grants, including those from the United States, the new causes for fiscal improvement have been largely self-imposed. One of prime importance was the rise in Sinai oil production and in corresponding Egyptian oil exports. Twelve new oil discoveries were made in the Gulf of Suez in 1980.Production from some of these and from existing facilities returned to Egypt at the time of the Israel territory hand-back reached almost o0 million last year -- an amount equivalent to 20 percent of the gross domestic product, by World Bank estimates.
A second windfall for the economy has been the constantly rising homeland remittances from the cadre of well-paid Egyptian expatriates working in other countries -- doctors, nurses, lawyers, administrative personnel, engineers, and the semiskilled. In 1980, their remittances were estimated at over $2 billion (US). Analysts point out that incoming payments represent a clear uplift, since these are injected directly into the back-home economy through incentive bank accounts and through family recipients.