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The Nile valley forms a natural geographic and economic unit, being bounded to the east and west by deserts, to the north by the sea and to the south by the Cataracts of the Nile. The need to have a single authority to manage the waters of the Nile led to the creation of the world's first state in Egypt in about 3000 BC.

Egypt played an important role in the negotiations leading to the Madrid Peace Conference in 1991, which, under United States and Russian sponsorship, brought together all parties in the region to discuss Middle East peace. This support has continued to the present, with President Hosni Mubarak often intervening personally to promote peace negotiations. In 1996, he hosted the Sharm El-Sheikh "Summit of the Peacemakers" attended by President Bill Clinton and other world leaders. In 2000, he hosted two summits at Sharm El-Sheikh and one at Taba in an effort to resume the Camp David negotiations suspended in July of 2000, and in June 2003, Mubarak hosted President George W. Bush for another summit on Middle East peace process.

The People’s Assembly may cause the resignation of the executive cabinet by voting a motion of censure. For this reason, the Prime Minister and his cabinet are necessarily from the dominant party or coalition in the assembly. In the case of a president and assembly from opposing parties, this leads to the situation known as cohabitation. While motions of censure are periodically proposed by the opposition following government actions that it deems highly inappropriate, they are purely rhetorical; party discipline ensures that, throughout a parliamentary term, the government is never overthrown by the assembly

After Mohamed Naguib resigned in 1954, Gamal Abdel Nasser, the real architect of the 1952 Revolution, assumed power as President and nationalized the Suez Canal leading to the 1956 Suez Crisis. Between 1958 and 1961 Egypt and Syria formed a union known as the United Arab Republic.

Egypt has been a republic since 18 June 1953. President Mohamed Hosni Mubarak has been the President of the Republic since October 14, 1981, following the assassination of former President Anwar Sadat. President Mubarak is currently serving his fourth term in office. He is the leader of the ruling National Democratic Party. Prime Minister Ahmed Nazif was sworn in as Prime Minister on 9 July 2004, following the resignation of Dr. Atef Obied from his office.

Export of petroleum and related products amounted to $2.6 billion in the year 2000. In late 2001, Egypt's benchmark "Suez Blend" was about $16.73 per barrel ($105/m³), the lowest price since 1999.

The Shura Council is the 264-member upper house of Parliament created in 1980. The Shura Council roughly translates to the ‘Consultative Council’ in English. In the Shura Council 174 members are directly elected and 88 members are appointed by the President of the Republic for 6-year terms. One half of the Shura Council is renewed every three years.

In addition to the agricultural capacity of the Nile Valley and Delta, Egypt's natural resources include petroleum, natural gas, phosphates, and iron ore. Crude oil is found primarily in the Gulf of Suez and in the Western Desert. Natural gas is found mainly in the Nile Delta, off the Mediterranean sea shore, and in the Western Desert. Oil and gas accounted for approximately 7% of GDP of fiscal year 2000-01.

Under comprehensive economic reforms initiated in 1991, Egypt has relaxed many price controls, reduced subsidies, and partially liberalized trade and investment. Manufacturing is still dominated by the public sector, which controls virtually all heavy industry. A process of public sector reform and privatization has begun, however, which could enhance opportunities for the private sector. Agriculture, mainly in private hands, has been largely deregulated, with the exception of cotton and sugar production. Construction, non-financial services, and domestic marketing are largely private. This has promoted a steady increase of GNP and the annual growth rate. Among Arab countries, Egypt's GDP is second only to Saudi Arabia's. However, the Egyptian economy relies heavily on tourist revenues. The tourism sector suffered tremendously following a terrorist attack on tourists in Luxor in October 1997, and the September 11, 2001 terrorist attacks against the United States, affecting the economy as a whole.

The Egyptian system for presidential election is regarded by many as not being fully democratic due to the fact that it is the People’s Assembly and not the populace itself, who retains the upper-hand in choosing the Chief of State. In addition, it allows for whatever party or coalition controlling the People’s Assembly to put forward their candidate as the presidential candidate. This greatly explains how in most of the 1980s and 1990s the National Democratic Party has managed to maintain the office of President and a parliamentary majority.