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Country Commercial Guides for FY 2000: Egypt Report prepared by U.S. Embassy Cairo, released July 1999

CHAPTER III: POLITICAL ENVIRONMENT

NATURE OF POLITICAL RELATIONSHIP WITH THE UNITED STATES

President Hosni Mubarak has supported a strong U.S.-Egypt relationship based on shared interests in promoting regional peace and stability, revitalizing the Egyptian economy, and strengthening trade ties. Over the years, Egypt and the United States have worked closely to help further the Middle East peace process. In 1993-94, Egypt hosted many of the negotiating rounds for the Gaza-Jericho autonomy agreement which was signed in Cairo in May 1994 by Israeli Prime Minister Yitzhak Rabin and Palestinian Authority Chairman Yasir Arafat. In November 1996, Cairo hosted the Middle East/North Africa (MENA) Economic Conference.

MAJOR POLITICAL ISSUES AFFECTING BUSINESS CLIMATE

Terrorism: Since 1992, extremist groups seeking to overthrow the Egyptian government have staged attacks on Egyptian Government officials, security forces and foreign tourists. Terrorist attacks do not threaten the stability of Egypt's secular government, but they do affect overall business climate and Egypt's tourist industry in particular. The November 1997 attack in Luxor, the country's largest single terrorist incident, that resulted in the death of 58 foreign tourists, led to a sharp downturn in numbers of tourists. Nevertheless, the wave of terrorism has receded since Luxor, partially owing to a much stronger and more aggressive security presence throughout the country. The number of terrorist attacks in the first half of 1998 was the lowest since 1993, and there are initial signs that the tourism industry is beginning to bounce back.

Political Reform: The Egyptian political system has undergone significant liberalization since the Nasser era of the 1950s and 1960s. Today, citizens enjoy a substantial degree of freedom of expression, and the judiciary has demonstrated its independence from the executive branch, although the media has recently been the target of increased government scrutiny. The government's anti-terrorism campaign has raised serious allegations of such human rights abuses as torture, arbitrary arrest, prolonged detention without trial, and the use of military courts to try civilians accused of terrorism. Moreover, the governing National Democratic Party (NDP) dominates the political scene to such an extent that, as a practical matter, people do not have a meaningful ability to change their government. In 1997, the People's Assembly approved a three-year extension of the Emergency Law, and Egypt has been under an official state of emergency continuously since 1981, the year in which the late President Sadat was assassinated.

BRIEF SYNOPSIS OF POLITICAL SYSTEM, SCHEDULE OF ELECTIONS, AND ORIENTATION OF MAJOR POLITICAL PARTIES

The Egyptian Constitution provides for a strong president who is empowered to appoint one or more vice presidents, the Prime Minister, the cabinet, and the governors of Egypt's 26 provinces. In 1993, President Hosni Mubarak was endorsed in a national referendum, in which he ran unopposed, to serve a third six-year term as President by the People's Assembly. The People's Assembly has 454 members, 444 popularly elected and 10 appointed by the President. The constitution reserves 50% of the Assembly seats for workers and farmers. Assembly members sit for five-year terms. The next peoples Assembly elections are scheduled for the year 2000.

There is also a 254-member Shura (Consultative) Council that has an advisory role on public policy but no legislative power.

The NDP has been in power since its establishment in 1978, commands large majorities in the Assembly and the Shura Council, and effectively controls the local governments, mass media, organized labor, and the large public sector. The NDP is an umbrella political party containing within its ranks members who favor greater economic and political reform, as well as those who advocate continued government ownership of the public sector and an active government role in directing the economy. There are more than a dozen authorized opposition political parties representing a range of views. But most are small and enjoy limited visibility. Members of five of these parties hold a total of 12 seats in the people's Assembly.