First among Mubarak's domestic policy initiatives as president has been the campaign to quell Islamic opposition. In the wake of Sadat's assassination he ordered the arrest and imprisonment of more than 2,500 people. He continued to detain nearly all of the more than 1,500 prisoners taken a month earlier during Sadat's crackdown on critics of his regime. Through most of the 1990s, Islamic opposition to Mubarak's government remained his foremost domestic policy problem. During a 1995 visit to Addis Ababa, Mubarak survived an assassination attempt by Egyptian Islamists, allegedly supported by the government of neighboring Sudan. An extended crackdown on members of Islamic groups was implemented over several years, resulting in the detention of an estimated 20,000 persons by 1999. By 1997, the main opposition groups declared a cease-fire, but a terrorist attack on a tourist bus in Luxor and continued fighting in the southern part of the country suggested that the problem had not yet been resolved. In the late 1990s, the number of violent incidents decreased sharply. By 2000, observers considered the problem to be largely under control, and the government had released some 5,000 of the detainees arrested during the crackdown.
Mubarak made great progress toward economic as well as political stability in Egypt through the 1980s and 1990s. In the early 1990s, the Mubarak government embarked upon a program of structural reform that brought the inflation rate under control, reduced the budget deficit, and began the process of selling off state-owned companies to reduce the degree of government regulation. Shortly after his reelection in September 1999, Mubarak replaced Prime Minister Kamal el-Ganzouri with Atif Muhammad Ubaid, a move seen as a response to el-Ganzouri's perceived failure to deal effectively with economic issues, including privatization of the financial sector and exchange rate problems.
Mubarak's reforms helped promote a steady increase of gross national product (GNP) and the annual growth rate. However, the Egyptian economy has relied heavily on tourist revenues, and the tourism sector suffered tremendously following a terrorist attack on tourists in Luxor in October 1997, and the 11 September 2001 terrorist attacks against the United States, which led to the War on Terror. Also, with an increase in violence between the Israeli and Palestinian states, foreign investments in Egypt have dropped dramatically.
In February 2002, the government appealed to 37 nations and international financial institutions and, as a result, received pledges of US $10 billion in aid. The promise of aid came with conditions, however. The Egyptian government must show greater progress and commitment to free enterprise before all the aid dollars are delivered.
In 2002 Mubarak opened the Bibliotheca Alexandrina, a modern installment of the ancient Alexandria Library. The library became the largest cultural edifice in the Middle East, and its opening was meant to send a message of peace to the world.