Egypt's Economic Hopelessness
A lack of property rights (with 92 percent of Egyptians holding their property without legal title), no enforcement of contracts, and a wildly vast bureaucracy, just for starters, make it a place terrible to build a business or even have security about keeping one's home. Hernando de Soto writes at the WSJ, quoting an Al Jazeera headline from January 14, a week before the Egyptian uprising:

"[T]he real terror eating away at the Arab world is socio-economic marginalization."

It turns out that much of Egypt's economy operates on the black market because it's so impossible to do anything legally. From a 2004 investigation by de Soto and his colleagues, championed by Egypt's then-minister of finance:

Egypt's underground economy was the nation's biggest employer. The legal private sector employed 6.8 million people and the public sector employed 5.9 million, while 9.6 million people worked in the extralegal sector.

...The entrepreneurs who operate outside the legal system are held back. They do not have access to the business organizational forms (partnerships, joint stock companies, corporations, etc.) that would enable them to grow the way legal enterprises do. Because such enterprises are not tied to standard contractual and enforcement rules, outsiders cannot trust that their owners can be held to their promises or contracts. This makes it difficult or impossible to employ the best technicians and professional managers--and the owners of these businesses cannot issue bonds or IOUs to obtain credit.

...Without clear legal title to their assets and real estate, in short, these entrepreneurs own what I have called "dead capital"--property that cannot be leveraged as collateral for loans, to obtain investment capital, or as security for long-term contractual deals. And so the majority of these Egyptian enterprises remain small and relatively poor. The only thing that can emancipate them is legal reform. And only the political leadership of Egypt can pull this off. Too many technocrats have been trained not to expand the rule of law, but to defend it as they find it. Emancipating people from bad law and devising strategies to overcome the inertia of the status quo is a political job.

...Due to burdensome, discriminatory and just plain bad laws, it is impossible for most people to legalize their property and businesses, no matter how well intentioned they might be.

The examples are legion. To open a small bakery, our investigators found, would take more than 500 days. To get legal title to a vacant piece of land would take more than 10 years of dealing with red tape. To do business in Egypt, an aspiring poor entrepreneur would have to deal with 56 government agencies and repetitive government inspections.

Pedro Jimenez writes in the comments:

I'll share an anecdote of "Rent Control" laws in Egypt and one that shaped my views on economic freedom: I know one family who used to live in a subsidized rent controlled apartment in EGYPT for ONE DOLLAR PER MONTH RENT!

After a decade of living in the apartment, they moved to the United States, and they maintained the lease on the apartment for over a decade. The subsidized rent was still ONE DOLLAR A MONTH. The apartment remained VACANT all this time!

A decade later, the lessee traveled to Egypt to check the apartment-> It was unused, empty, and the landlord poured concrete into the toilet bowl, rendering it useless, but the apartment was still in overall good shape.

I'll ask one of the family members if they still hold the lease to this apartment. This same family member recently complained about a "serious housing problem" in Egypt that the government was never able to solve.

How ironic.

Also, it's likely that the Egyptians lack of credit is related to Islam, since charging interest is prohibited by the Quran. If the Muslim Brotherhood takes over, it's unlikely anyone will ever be able to get credit, once Sharia-compliant banking laws are in effect.