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Egypt: The price of revolution

Three months after Egypt's revolution, the country's economy struggles to recover.

Egypt's finance minister recently warned that the government deficit could be as high as $30 billion next fiscal year.

Some analysts and economists, however, criticize the rise in government spending, which is apparently aimed at placating public anger on the street.

"One problem is that they just raised government salaries. But if inflation is already near the same rise in level, the person getting more money doesn't really have more purchasing power," said Kandil. "From a worker's perspective, it may feel good. But from an economic perspective, it actually destabilizes the economy and leads to greater inflation."

The only real sign of hope is the recent promises of billions of dollars in foreign aid and debt relief from the United States, Saudi Arabia and the World Bank, among others.

Most economists agree that Egypt's short-term costs are well worth the possibility of long-term future gains.

"We are witnessing the price of democracy. You can't expect a revolution to pass without any impact," said Monal Abdel-Baki, a professor of economics at the American University in Cairo. "Once institutional frameworks like the parliament and presidency are established, we'll see the end of this phase."

But how, when, and if the millions of foreigners decide to return is still a concern for workers in the vital tourism sector.

For Samir Abdel Basset, life in the souvenir shop simply must go on — even without customers.

With little income, the young vendor can barely afford to drink his usual five daily cups of sweet tea. Still, he trudges on with a smile, smoking cigarettes and watching old Egyptian soap operas to pass the time in his empty shop.

"What else can I do? Customers will come back at some point, I think. Everything, of course, is up to God," he said.

http://www.globalpost.com/dispatch/news/regions/middle-east/egypt/110526/egypt-economy-revolution-protests