Egypt was facing a severe foreign exchange shortage when the Gulf crisis broke out. Its debt arrears were piling up and it was finding it more and more difficult to obtain new loans. The Gulf crisis threatens to make this situation even worse. Here’s how:
Remittances sent home by some 1 million Egyptian workers in the Gulf amounted to at least $4.25 billion in 1989. About half of these workers have returned home, causing an estimated annual loss of $2.4 billion.
Suez Canal tolls were $1.38 billion in 1989. The government expects a 10-20 percent drop over a year due to the loss of Iraqi and Kuwaiti oil tanker traffic and the decline in shipments of goods to those two countries.