The events in Egypt presents a very good case study on the effects of politics on the economy. Since the purpose of this blog is to discuss economics and finance, I would not dwell on the political aspects of the events but instead will look at its implication to the Egyptian economy.
Egypt is well-known for the tourism industry. But not a lot of people know that it also has a very deep processing industry due to its location as well as cheap labour. Many processed food found in the Middle East comes from Egypt.
How did the the protests effectively caused the whole country to grind to a standstill? Was there widespread bloodshed?
All the protesters needed to do was to force the Egyptian Stock Exchange to close. This has a knock-on effect to the banking sector. Since money is the life blood of any economy, the effect of just closing the exchange and banking sectors was enough to cause a nation to stop on its track.
Economic sabotage?
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