Egypt faces daunting challenges in the period immediately ahead. After several years of relative stability, both economic and political trends have turned ominous, as this largest and most important of Arab states presses against the outer limits of its resources. Negative developments in recent months affecting tourism, oil revenues and remittances from millions of expatriate workers in oil-rich Arab states have aggravated the tenuous situation. For President Hosni Mubarak’s government an economic crisis is almost inevitable in the near term, and a major political explosion only slightly less likely.