The rule of Mubarak (1981-present)

Mohammed Hosni Mubarak had been Sadat's vice-president since 1974 and, like Sadat, seemed singularly unimpressive prior to assuming the presidency. At first he continued Sadat's policies but with less flamboyance and more domestic sensitivity. He allowed the publication of Islamic newspapers and downplayed the Israeli connection. At the same  time, he accelerated the process of privatization and developed Egypt's tourist infrastructure, which enhanced its lucrative tourist industry. More impressively, he managed to resume diplomatic and trade relations with moderate Arab countries while maintaining the treaty with Israel. By the end of the 1980s Egypt was once again playing a leading role in Arab politics. Egypt's vital role in support of Saudi Arabia and Kuwait in the Gulf War combined with death of socialist-communist influence in the Arab world returned the country to the centre of Middle Eastern politics.

However, Egypt's domestic situation is far from stable. The country's economic reforms and infrastructure development cannot keep pace with the population explosion and inflation. Extremist Muslim groups launched a campaign of terrorism against foreigners, which paralyzed the government and damaged tourism between 1992 and the beginning of 1994. But security forces broke the main terrorist groups in Cairo and Upper Egypt and the summer of 1994 experienced a spectacular revival of tourism, particularly from Saudi Arabia and the Gulf States.

Although most terrorist cadres have been imprisoned and many have been sentenced to death, the threat to Egypt's stability remains, as Islamic fundamentalism becomes more deeply rooted in Arab societies.

President Hosni Mubarak was sworn in for a further six-year term in office on 5 October 1999. Mubarak, the only presidential nominee, won nearly 94 percent of the votes in a popular referendum on September 26.