Occupying the northeast corner of Africa, Egypt is bisected by the highly fertile Nile valley separating the arid western desert from the smaller semiarid eastern desert. Egypt's 1979 peace treaty with Israel brought security, the return of the Sinai, and large injections of US aid. Its essentially pro-Western military-backed regime is now being challenged by an increasingly influential Islamic fundamentalist movement.

Egypt has a long tradition of ethnic and religious tolerance, though the rise in Islamic fundamentalism has sparked sectarian clashes between Muslims and Coptic Christians. Most Egyptians speak Arabic, though many also have French or English as a second language. There are Berber-speaking communities in the western oases. Small colonies of Greeks and Armenians live in the larger towns. Islam is the dominant religion, followed by Coptic Christianity. Although many Jews left Egypt for Israel after 1948, a small community remains in Cairo.

Cairo is the second most populous city in Africa, and a key social question in Egypt is the high birthrate. In 1985 the government set up the National Population Council, which made birth control readily available. Since then, the birthrate has dropped from 39 to fewer than 25 per 1000 people, but population growth is still high. The population is predicted to reach almost 100 million by 2025. The growing influence of Islamic fundamentalists, who oppose contraception, could see the rate accelerate once more.

Egyptian women have been among the most liberated in the Arab world, and under a law passed in 2000 they now have the right to initiate divorce proceedings. The steady rise of Islamic fundamentalism, however, threatens their position, particularly in rural areas.

Strengths

Oil and gas revenues. Well-developed tourist infrastructure. Remittances from Egyptians working throughout the region. Suez Canal tolls. Agricultural produce, especially cotton. Light industry and manufacturing.

Weaknesses

Tourism revenues hit by "war on terrorism." Dependence on imported technology. High birthrate.

Profile

Under President Nasser, Egypt followed an economic policy inspired by the Soviet model. Rigid and highly centralized, it gave Egypt one of the largest public sectors of all developing countries. Economic restrictions were first relaxed in 1974. President Sadat's open-door policy allowed joint ventures with foreign partners for the first time, although the business classes were the only ones to profit. Most Egyptians suffered from new austerity measures.

Under President Mubarak, economic reform has quickened and there is more awareness of poverty and the high levels of unemployment. Priorities now are to encourage manufacturing, sustain economic growth, and reduce the gap between rich and poor.

Egypt is a multiparty system in theory. In practice, the ruling NDP, backed by the military, runs a one-party state.

Profile

Egypt has been politically stable since World War II, with just three leaders since 1954 when Nasser came to power. Anwar Sadat was assassinated in 1981, but was immediately replaced by Hosni Mubarak, a man in the same mold. The NDP retains its grip on the political process by means of the state of emergency, and has close links with the military. Elections in 2000 were more transparent than before and the Islamic opposition fared slightly better, but many candidates elected as independents then joined the NDP.

While Nasser promoted Arab socialism, influenced by the Soviet model, Sadat and Mubarak encouraged private enterprise and a liberalized economy. However, there has been no parallel liberalization in politics – one reason for the growing success of Islamist militants.

Main Political Issues

Islamic fundamentalism

The NDP government is engaged in a struggle against Islamist terrorist groups seeking to turn Egypt into a Muslim theocracy along Iranian lines. Extremists have been responsible for numerous attacks on police and tourists. The fundamentalist message, with promises of improved conditions, has proved attractive to both urban and rural poor. Mosques are often the main providers of education and health services that parallel the state's. Although the government uses draconian measures to counter the terrorist threat, and banned the only legal Islamic party, the Labor Party, in May 2000, it continues to allow religious organizations to pursue their social programs.

The state of emergency

The ruling NDP in 1994 extended the national state of emergency in force since the assassination of President Sadat by Islamic terrorists in 1981. Emergency laws have been invoked to justify the ban on religious parties, especially the Muslim Brotherhood. The state of emergency was extended in February 2002 for a further three years. Human rights groups claim that emergency powers are routinely applied to silence the NDP's political opponents.

Egypt has close relations with the West, particularly the USA. Its support for the alliance against Iraq in the Gulf War was crucial, and Egypt received a massive economic reward from Saudi Arabia. It is also one of only two Arab countries to be technically at peace with Israel, for which it faces criticism from hard-line Arab and Islamic states. However, the Israeli military action in 2002 has weakened Egypt's support, and it continues to lobby for the creation of an autonomous Palestinian state.

Relations with Iran are particularly tense: Iran actively supports the Islamist groups operating against the NDP government, and characterizes Egypt as a corrupt state under US influence.

Egypt has expressed concern over international treatment of Iraq; President Mubarak advocates a diplomatic solution. He has opposed recent US-led air strikes against Iraq and urged restraint in the "war on terrorism."

Egypt's diplomatic service is the Arab world's largest, and many Egyptians, such as former UN Secretary General Boutros Boutros Ghali, have served on international bodies.

Egypt's armed forces, the largest in the Arab world, are battle-hardened from successive wars with Israel and from participation in Operation Desert Storm to liberate Kuwait in 1991. More than 500,000 reservists augment the regular troops.

After the 1978 Camp David framework agreements were reached with Israel, Egypt stopped buying Soviet weapons and aircraft, and turned instead to Western suppliers. Cooperation with the USA has reaped dividends in the form of access to more sophisticated defense equipment and improved training. Egypt has a small arms industry and sells light weapons, notably its version of the Soviet-developed AK-47 assault rifle, to other developing countries.

Oil and gas are Egypt's most valuable resources. Oil multinationals are involved in new explorations, but more competitive oil-rich countries, such as Algeria and Yemen, are more profitable; 55% of Egypt's oil production is consumed locally.

Most electricity is derived from coal and hydroelectric power. The Aswan High Dam, built between 1960 and 1970 and with a maximum output of 10 billion kWh, provides the bulk of hydroelectricity. Within four years, revenue from it had covered its construction costs. The USA gave aid in 2000 to upgrade the power plant, with work going ahead in 2001.

Egypt suffers from a chronic lack of water. The Nile, the only perennial source, is increasingly saline because of its much-reduced flow, due to irrigation use and the Aswan High Dam. The main cities suffer heavy industrial pollution, and environmental controls are few. In Cairo a sewerage system has improved sanitary conditions.

Cities are linked by adequate roads, but railroads are the main transportation arteries, and trains are frequently overcrowded. The Suez Canal is a vital international shipping lane.

Health care, although improved, remains basic – there is only one hospital bed for every 500 people. Patient–doctor ratios are among the lowest in the Arab world. Islamic medical centers based on the mosque organization are spreading, and are replacing the state system. Female circumcision was banned in public hospitals in 1996, although this move was challenged in the courts.

Most Egyptians attend elementary school until the age of 11, but not many complete secondary education. A small majority of men, but a minority of women, are literate. A government initiative to improve girls' primary education was launched in 2000. The quality of the education given by Egyptian universities is widely respected in the Arab world.

Terrorist attacks have tarnished Egypt's reputation as a law-abiding country; street crime and muggings were previously rare.

Intercommunity violence – in particular between Muslims and Christians – has become more common, as have attacks on Western tourists by Islamic extremists. Human rights groups have criticized the police for their abuse of current emergency laws, which results in the routine torture and death in police custody of scores of political prisoners.

Wealth disparities are highly marked in Egypt. The largely urban Coptic Christian community is the group with the country's highest standard of living. Most Egyptians remain subsistence farmers wih low incomes. The return of many unemployed workers from the Gulf states to their mainly rural homes has further depressed conditions in the countryside.

Egypt's wealth of antiquities from its ancient civilizations have made it a key tourist destination since the 1880s. Today, it also offers Nile cruises and some of the world's best scuba diving, notably on the coral reefs near Hurghada on the Red Sea.

The industry went into sharp decline, however, when militant Islamists began targeting Western tourists in the mid-1990s; in an attack in Luxor in November 1997 58 tourists were killed. Heightened security measures allowed for a brief recovery, but the situation worsened following the September 2001 attacks in the USA; the resultant contraction in the global tourism industry affected Islamic countries in particular.

Egypt's centuries-old Ottoman occupation ended in 1914, when the country came under British rule. It became fully independent in 1936. Army officers led by Lt. Col. Nasser seized power in 1952.

• 1953 Political parties dissolved, monarchy abolished. Republic proclaimed with Gen. Mohammed Neguib as president.
• 1954 Nasser deposes Neguib to become president.
• 1956 Suez Crisis over nationalization of Suez Canal. Israeli, British, and French forces invade, but withdraw after pressure from UN and USA.
• 1957 Suez Canal reopens after UN salvage fleet clears blockade.
• 1958 Egypt merges with Syria as United Arab Republic.
• 1960–1970 Aswan High Dam built.
• 1961 Syria breaks away from union with Egypt.
• 1967 Six-Day War with Israel; loss of Sinai.
• 1970 Nasser dies; succeeded by Anwar Sadat.
• 1971 Readopts the name Egypt. Islam becomes state religion.
• 1972 Soviet military advisers dismissed from Egypt.
• 1974–1975 USA brokers partial Israeli withdrawal from Sinai.
• 1977 Sadat visits Jerusalem for first meeting with Israeli prime minister.
• 1978 Camp David accords, brokered by US, signed by Egypt and Israel.
• 1979 Egypt and Israel sign peace treaty, alienating most Arab states.
• 1981 Sadat assassinated by Islamist extremists. Succeeded by Hosni Mubarak.
• 1982 Last Israeli troops leave Sinai.
• 1986 President Mubarak meets Israeli Prime Minister Shimon Peres to discuss Middle East peace.
• 1989 After 12-year rift, Egypt and Syria resume diplomatic relations.
• 1990–1991 Egypt participates in UN operation to liberate Kuwait.
• 1991 Damascus Declaration provides for a defense pact among Egypt, Syria, and GCC countries against Iraq.
• 1994–1998 Islamist extremists begin campaign of terrorism, killing civilians and tourists. Government steps up countermeasures.
• 1999 Banned Gamaat Islamiya ends campaign to overthrow government.
• 2000 Egypt recalls ambassador to Israel because of escalating Israeli aggression against Palestinians.
• 2001 Heavy decline in tourist numbers following September 2001 attack on USA.