Egypt President Mubarak Is 'Making the Whole Country Pay the Price'

Feb. 1, 2011 — -- While hundreds of thousands of citizens protest on the streets of Egypt, businesses and public services have languished and economists say the crisis could have significant long-term effects on the Egyptian economy.

"In the short term, the economy has practically come to a standstill," said Ragui Assaad, professor at the University of Minnesota's Humphrey School of Public Affairs.

The protests have paralyzed ports and deliveries of goods, the government has shut down Internet access, people have been unable or unwilling to go to work, and there have food shortages at supermarkets and gasoline has become inaccessible, he said.

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Assaad, who specializes in the Egyptian labor market, said the longer President Hosni Mubarak refuses to resign and the protests continue, the more damage will take place.

"The longer he remains in power, the bigger the cost is going to be. So far, people have been willing to bear the cost, like changing their dietary habits, like eating accessible foods like falafel, because they think change is coming," Assaad said. "He is on his way out, but he's making the whole country pay the price."

ArabianBusiness.com reported that Egyptian telecommunication providers could lose millions of dollars because of the government's shutdown of the Internet and communication services.

With reports that the United States and other countries have evacuated their foreign citizens, Assaad said tourism, which is nearly half of Egypt's foreign revenues, is especially suffering.

"Tourism, which is a large part of the economy, is being decimated," Assaad said. "Foreign investors, once banks open, are going to take money out."