REFORMIST POLICIES ALLIED TO THE PRESENCE OF EXPERIENCED INTERNATIONAL COMPANIES HAVE PUT THE EGYPTIAN ECONOMY BACK ON TRACK AFTER A TEMPORARY SLOWDOWN IN THE PRIVATIZATION PROCESS. WITH THE NUMBER OF VISITORS SURPASSING FIVE MILLION AND NEW OIL AND GAS RESERVES DISCOVERED DAILY, TOURISM AND PETROLEUM HAVE NOW EMERGED AS THE COUNTRY'S NEW INVESTMENT FRONTIERS

WHILE STABILITY in the Middle East is everyone's concern, Egypt is one of the few countries that has both the clout and political wherewithal to move the Israeli-Palestinian peace process forward. Relying on its reputation as a regional powerbroker, Egypt will no doubt continue to play a dominant role in regional politics.

The most senior statesman in the Arab world is Egyptian President Hosni Mubarak, whose experience in the region is without equal. "We have a unique role to play in the process," says Atef Ebeid, President Mubarak's prime minister since 1999. "We need peace in the region and it would be unfair to the people of Egypt to get involved in any conflicts. A negotiated and just peace will be good for everybody. It is not in the interest of the Palestinians or the Israelis to continue the conflict." Mr. Ebeid himself has been instrumental in maintaining stability at home, both on the economic and p o l i t i c a l fronts. In fact, the U.S.-based National Defense Council Foundation (NDCF), a non-governmental and non-profit think tank that studies defense and foreign affairs issues, recently released its annual list of world conflicts, and Egypt was no longer on it.

In contrast, other nations thought to be relatively safe, such as Spain, were added to the NDCF's list of world conflicts for 2000. The NDCF c r e d i t e d Egypt's stability to a drop in Islamic radicalism, particularly since candidates from the moderate Islamic Brotherhood were allowed to stand as independents in the November 2000 legislative elections, in which Mr. Mubarak's National Democratic Party won 388 of the parliament's 454 seats. Political stability has been a boon to Egypt's economy and especially to the tourism industry, which for the first time in Egypt's history became the country's main foreign currency earner in 2000. Also for the first time, the number of tourist arrivals to Egypt surpassed the five mil-lion mark, while earnings topped US$3.2 billion, a 15% increase over 1999.

In the early 1990s, Egypt embarked on an ambitious structural and liberalization reform program that met with immediate success. Mr. Ebeid says accelerated privatizations- after a relatively slow period in 2000-and a liberal monetary policy are at the root of his government's bid to maintain a stable domestic macroeconomic climate and continued economic growth, which is expected to reach 4.9% in 2000-01.

"Delaying privatization is really not in our interest, for purely economic reasons," Prime Minister Ebeid explains. "The price (of companies ear-marked for privatization) will be lower than today, and we need the money to pay the companies' debts and to finance our investments in Egypt's infrastructure. There was no political or administrative reason for the slow-down. There has just been a downturn in the market and in demand, that is all."

And since Mr. Ebeid heads a reformist economic team, investors frustrated by the slow pace of liberalization during the 2000 election year will see a sharp increase in activity in 2001. "Even if things stay as they are in terms of demand, we have decided to move faster," vows Mr. Ebeid. "The good news is that we are receiving signals from investors who are willing to come, and we can offer them decent terms. There are also new frontiers opening, the most exciting being in oil, natural gas and information technology."

A CHANGING POPULATION

EGYPTIAN PRESIDENT Hosni Mubarak's ruling National Democratic Party sailed to victory in final-round legislative elections in November 2000, signaling a vote of confidence for the president's handling of domestic and international affairs since the November balloting came just one year after Mr. Mubarak was reelected to another four-year term. The multi-round elections for the 454-seat parliament are held every five years, and in 1995 the NDP garnered 90% of the seats. In the year 2000, Mr. Mubarak's party won all but 66 seats, or some 85%.

In first round voting last October, several key NDP members lost their seats as democratic changes in election rules allowed the moderate, formerly outlawed Islamic Brotherhood field canidates to run as independents, marking the group's return to parliament after more than ten years on the political fringe. The Islamic Brotherhood supports the establishment of an Islamic state by peaceful means, but it has been accused of being a front for militant groups whose activities all but disappeared after a tough government crackdown in 1977.

The results sent a clear message to the current Egyptian leadership that many of its constituents want change. Although no significant constitutional reforms are expected as a result of the election, there will no doubt be a clear voice in parliament calling for moderation as the government strives to strengthen democracy and promote economic liberalization.