Egypt, a regional power in the Middle East and North Africa, exerted great efforts in 2008 to advance the Palestinian-Israeli talks and the inter-Palestinian dialogue, while pushing forward its reform agenda in a bid to improve the public's standards of living and social justice in the populous country.
EFFORTS ON PALESTINIAN ISSUE FACING CHALLENGES
Since the beginning of year 2008, Egypt has been busy mediating between the Palestinians and Israel on the thorny issues including the resumed peace talks, a possible prisoner swap and a truce between Israel and Palestinian militant groups.
Although Egypt tried to narrow the gaps between the Palestinians and Israel in a bid to advance the peace process, few tangible progress, except a fragile truce in and around the Gaza Strip, has been reached in the past year due to big differences of the two sides.
Under the sponsorship of Egypt, a truce agreement between Palestinian Islamic Hamas movement and Israel came into effect on June 19 in and around Gaza, raising hopes for a chance to realize peace in the Middle East despite of deep doubts on the duration of the calmness.
In the following months, the two sides restrained armed conflicts in and around the Palestinians enclave but fresh clashes broke out in early November, which endangers the Egyptian-brokered ceasefire.
On Nov. 4, at least six Hamas gunmen and one Islamic Jihad militant were killed by Israeli army, the first Israeli action in Gaza since the ceasefire took effect in June.
In response, Palestinian militants in Gaza fired dozens of Qassam rockets and mortar shells in the following days.
On Nov. 11, Israel's caretaker Prime Minister Ehud Olmert vowed that the confrontation with Hamas is unavoidable and Israeli army is prepared for it.
The tit-for-tat attitude of retaliation of both sides has caused great worries about the already deteriorate situation in the Palestinian-Israeli region and deep doubts over an extension of the Cairo-brokered truce.
According to media reports, the truce agreement should include a cessation of violence and holding negotiations on release of Palestinian prisoners, followed by a gradual lifting of siege on Gaza and negotiations over release of Israeli captive Gilad Shalit.
Hamas has demanded Israel to free more than 1,000 prisoners in exchange for Shalit, who was kidnapped by Hamas-led militants in across-border raid near Gaza in 2006.
Apparently, the talks on a possible prisoner swap is unlikely to resume under such a circumstance at present.
On Nov. 9, the international Quartet, which groups the United States, the European Union, the United Nations and Russia, held a meeting in the Egyptian Red Sea resort of Sharm el-Sheikh under the sponsorship of Cairo and evaluated developments of the peace negotiations between the Palestinians and Israel, which resumed ata U.S.-hosted Mideast conference in November last year.
At the Annapolis conference, Palestinian and Israeli leaders pledged to try to reach a peace agreement by the end of 2008.
Although the Palestinians and Israel promised in Sharm el-Sheikh to carry on their peace negotiations, a deal is not likely to be reached by the end of this year as expected.
As for the reconciliation among Palestinian factions, Egypt also played as an active mediator but encountered difficulties to bring together the Palestinian groups for a national unity dialogue.
Since late August, Egyptian mediators have held a nearly two-month talks with some 12 Palestinian movements, including rival Fatah and Hamas, and presented a draft plan in late October designed to end the inter-Palestinian rift.
Just two days ahead of a long-awaited Palestinian national unity dialogue that is planned to open in Cairo on Nov. 10, Egypt had to put off the Palestinian meeting due to the boycott of the Islamic Hamas movement.
Some sources said the Palestinian national dialogue is likely to resume in December, but gaps between Hamas and Fatah cast shadows on the possibility.
Hamas said it would go to the dialogue only if President Mahmoud Abbas' security forces stops arrests against the movement's activists in the West Bank.
In addition, Hamas complained that the Arabs and the mediator Egypt "only listen to one party (Fatah) and doesn't listen to Hamas' vision."
REFORMS TO REACH SOCIAL JUSTICE
In the domestic front, Egypt carries on its economic and social reforms in face of price hikes and looming impact of the current international financial crisis.
Since the beginning of this year, Egyptian market experienced continuous price hikes mainly due to rising food prices.
According to the statistics issued by the Central Agency for Public Mobilization and Statistics (CAPMAS), Egypt's urban inflation soared to 22 percent in the year to July, the highest since January 1992.
With a population of nearly 80 millions, Egypt faces a big challenge to ease the burden of the public, especially that of the low-income class.
The Egyptian government has taken a series of measures, including supply more cheap food on a ration card system, to curb the soaring prices that triggered protests this year in some areas of the country.
Due to a drop in food and beverages prices, average urban inflation dropped to 20.2 per cent in October from 21.5 per cent in September, said the CAPMAS.
Meanwhile, another challenge for the Egyptian government is the negative impact of the current global financial crisis that is spreading in the world.
In October, Prime Minister Ahmed Nazef said the ongoing global financial crisis could impact his country on three aspects, including the banking sectors, the stock market and the growth rate of the economy.
Egyptian economy registered a 7.2 percent growth in the fiscal year of 2007-2008 (as of June 2008) and a 7.1 percent increase in the fiscal year of 2006-2007.
It is estimated that the current global financial turmoil may slow down Egypt's economic growth rate from more than 7 percent to6 percent.
During the fifth annual conference of the Egyptian ruling National Democratic Party (NDP) in early November, President Hosni Mubarak said maintaining the economic growth rate and extending social justice are the two priorities of the party and the government.
In order to push forward the reforms, the ruling NDP proposed in early November that the government give Egyptians free shares in public sector companies, according to which all Egyptians over 21 years old would receive the shares.
Egyptian Minister of Investment Mahmoud Mohieddin noted that the government will create a new group of shareholders and soon finalize a draft law for the state-owned asset management program.