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Egypt's largely uneducated urban and rural lower classes were intensely devoted to Islam, but they lacked a thorough knowledge of the religion. Even village religious leaders had only a rudimentary knowledge of Islam. The typical village imam or prayer leader had at most a few years of schooling; his scholarly work was limited to reading prayers and sermons prepared by others and to learning passages from the Qur'an. Popular religion included a variety of unorthodox practices, such as veneration of saints, recourse to charms and amulets, and belief in the influence of evil spirits.

Under the 1980 amendments of the Egyptian Constitution, the President is elected for six years. As of 2005, President Mohamed Hosni Mubarak has been the President of the Republic since 14 October 1981 and is currently serving his last year of his fourth term. President Mubarak was re-elected in 1987, 1993, and 1999, making him the longest serving Egyptian President in the history of the Republic.

The President names the Prime Minister and may preside over the cabinet. President Mubarak holds a monthly meeting with the cabinet on which he presides. In addition, the President is the Supreme Commander of the Egyptian Armed Forces. The President concludes treaties and may submit questions to national referenda. The President also possesses the constitutional power to dissolve the People’s Assembly, however, no President has ever done so. In certain emergencies, the President may assume special, comprehensive powers.

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.

A series of International Monetary Fund arrangements, coupled with massive external debt relief resulting from Egypt's participation in the Gulf War coalition, helped Egypt improve its macroeconomic performance during the 1990s. Through sound fiscal and monetary policies, Cairo tamed inflation, slashed budget deficits, and built up foreign reserves. Although the pace of structural reforms, such as privatization and new business legislation, has been slower than the IMF envisioned, Egypt's steps toward a more market-oriented economy have prompted increased foreign investment. Lower combined hard currency inflows - from tourism, worker remittances, oil revenues, and Suez Canal tolls - in 1998 and the first half of 1999 resulted in pressure on the Egyptian pound and sporadic dollar shortages, but external payments were not in crisis. Despite ample reserves, the Central Bank did not provide sufficient hard currency to commercial banks and Cairo restricted imports for a short period; these developments confirmed to some investors and currency traders that government financial operations lack sufficient coordination and openness. Monetary pressures have since eased, however, with the continued oil price recovery starting in mid-1999 and a moderate rebound in tourism. Increased gas exports are a major plus factor in future growth.

The Muslim Brotherhood's reemergence as a political force coincided with the proliferation of Islamic groups. Some of these groups espoused the violent overthrow of the government while others espoused living a devout life of rigorous observance of religious practices. It is impossible to list all the Islamic groups that emerged in the late 1970s because many of them had diffuse structures and some of the more militant groups were underground. Egypt's defeat and loss of territory in the June 1967 Six-Day War was the main cause for the growth of religiously inspired political activism. Muslims tended to view the humiliating experience as the culmination of 150 years of foreign intrusion and an affront to their vision of a true Islamic community. Islamic tradition rejected the idea of non-Muslims dominating Muslim society. Such a state of affairs discredited Muslim rulers who permitted it to persist. It was, therefore, incumbent on believers to end the domination and restore the true supremacy of Islam. As part of their Sunni creed, the most radical activists adopted jihad and committed themselves to battling unbelievers and impious Muslims. During the 1970s and 1980s, Islamists perpetrated a number of violent acts, including the assassination of Anwar Sadat in October 1981.

Egypt's vast and rich literature constitutes an important cultural element in the life of the country and in the Arab world as a whole. Egyptian novelists and poets were among the first to experiment with modern styles of Arabic literature, and the forms they developed have been widely imitated. Egyptian novelist Naguib Mahfouz was the first Arab to win the Nobel Prize in Literature. Egyptian books and films are available throughout the Middle East.

Egypt is on good terms with all of its neighbours, and was the first Arab nation to make peace with Israel. It has a territorial dispute with Sudan over the Hala'ib Triangle