RENEE MONTAGNE, host:

All this week, we're hearing about the man who has ruled the Arab world's most populous nation for almost 30 years. Egyptian President Hosni Mubarak has dedicated much of his three decades in power to modernizing the economy. His policies have opened up a world of luxury goods, high-end technology and gated communities. But only for Egyptians on one side of the class divide, what one activist calls the new class of nobles. But those on the other side are now finding that even basic middle-class incomes aren't enough to live on anymore. Egyptian economist Galal Amin(ph) says the president's policies have actually divided Egypt into two nations.

Mr. GALAL AMIN (Economist): Egypt has never been deserving the description of two nations, as it today.

MONTAGNE: This morning, NPR's Soraya Sarhaddi Nelson has a tale of two cities: the haves and have-nots of Cairo.

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SORAYA SARHADDI NELSON: This newest gated community in the Egyptian capital is called Uptown Cairo. Dozens of banners flapping over undeveloped plots tempt buyers with a pledge that this will be their street of dreams. Beneath the hillside development, however, life is more like a nightmare.

The sprawling slum here called Duweiqa is one of a growing number of illegal districts with substandard housing. Municipal authorities turn a blind eye to them in exchange for bribes. A growing number of Egyptians are moving to these neighborhoods because they can't afford to live anywhere else in Cairo.

Among the tenants here are Aida Abdel-Fattah and her family.

Ms. AIDA ABDEL-FATTAH: (Foreign language spoken)

SARHADDI NELSON: She describes waking in her single-room shack every night to chase away scorpions from her grown sons who sleep on the floor. The home has no sewage system, so she and her daughter Iman hoist buckets of waste onto their heads every day and carry them down the street to dump. Yet Abdel-Fattah considers herself one of the lucky ones. She has a roof over her head and she's technically middle-class.

Her husband is a retired government printer whose monthly pension is the equivalent of about $100. Her older children are married and throw in extra cash to help with the bills.

Mr. MAHMOUD ABDEL-FATTAH: (Foreign language spoken)

SARHADDI NELSON: Her grown son Mahmoud says there is usually enough left over to give a few dollars to a poor widow and her young children who live next door.

Retired defense ministry worker Ahmed El-Dao(ph) is not so lucky, even though his pension is nearly twice that of Abdel-Fattah's husband. For the past year, El-Dao has lived with his wife in a tiny tent they fashioned out of blankets. Theirs is one of dozens of such tents erected outside a public housing complex named after Egyptian First Lady Suzanne Mubarak.

Mr. AHMED EL-DAO: (Foreign language spoken)

SARHADDI NELSON: The 63-year-old says he and his wife moved here after municipal workers showed up one morning out of the blue and razed their modest home in Duweiqa. His was one of many neighborhoods torn down by panicked municipal officials following a 2008 rockslide here that killed scores of people living in shoddily built homes.

News outlets reported that the Egyptian government was promising flats to the survivors and residents like El-Dao, whose homes were razed for safety reasons. El-Dao claims the workers told him and his neighbors they were eligible for flats in the Mubarak complex, that they should go to the local police station to pick up the papers. But when they got to the precinct, there were no documents. As their original homes weren't legal, they had no documents for those either.

So now El-Dao and hundreds of other people with similar stories live in tents with no place else to go. Meanwhile, many flats in the Mubarak compound sit empty. El-Dao says it's enough to send his blood boiling.

Mr. EL-DAO: (Through translator) If I was a citizen of any other country, I would get more respect. Even Israel and the United States would give me a home to live in because they care for the people. Here, our president doesn't care about me at all.

SARHADDI NELSON: The Egyptian Housing Authority refused a longstanding request to be interviewed for this series, but other Egyptians who agreed to talk had plenty to say about the growing class divide, including those with money.

Like Ahmed Ezat(ph). He quit his lucrative job as an investment banker to run a training program in Cairo for entrepreneurs. His goal is to create more private businesses that will in turn create new jobs. Some analysts estimate a million new jobs are needed each year in Egypt. Ezat says he made his fortune working outside the country, like many Egyptians, but he adds those with connections to Mubarak and his inner circle do quite well here. That's because his government controls every resource businesses need to operate.

Mr. AHMED EZAT: If they are considered to be favored, they are offered licenses, they can get land, the doors are open to them. The entire system of the government is imbedded with a lot of this new class of nobles, if I can use that word. And that has never happened before.

SARHADDI NELSON: With their newfound wealth and revamped customs laws, Egypt's elite have access to just about anything they want. Ezat too acknowledges enjoying the perks of wealth, even if he feels a little guilty about it, like a pricy and large home in a gated community on Cairo's outskirts, plus a Mercedes, a Suzuki motorbike, and private schools for his three sons. But Ezat and some other Egyptians of means nonetheless criticize the government for abandoning the rest of society.

Mr. EZAT: The government has to understand that it sort of painted itself into a corner. And all this advocacy of building this class of nobles was really something that was very detrimental and something that has to be reversed.

SARHADDI NELSON: Author Galal Amin says there are few traces left of the policies of the previous two presidents, Anwar Sadat and Gamal Abdel Nasser, who showed far more sensitivity to the poor and unemployed. Amin says instead Hosni Mubarak has surrounded himself with ministers and advisors who are more sensitive to demands of the International Monetary Fund and World Bank.

Mr. AMIN: When you have an economic policy which neither protects the Egyptian industry, actually, and leaves the public sector a prey to private foreign investment, and not sensitive to the unemployment issue, the poor are bound to suffer.

SARHADDI NELSON: But back in their slum shack in Duweiqa, Aida Abdel-Fattah's son, Mahmoud, hasn't given up hope for a better life.

Mr. ABDEL-FATTAH: (Foreign language spoken)

SARHADDI NELSON: He says he may have been born and raised in this shack, but when he marries someday he will find a way to rent one of the government-built flats down the street.

His mother shakes her head. She tells him there's no point planning on something that will cost the family the equivalent of six months of her husband's pension to get in, plus more than half their monthly income to live there.

Ms. ABDEL-FATTAH: (Through translator) Who can afford that? And the contract is only for one year. After that, they can kick you out.

SARHADDI NELSON: Abdel-Fattah says she might as well be dead for all the help she gets from the Mubarak government. She feels her only recourse is to leave her future in God's hands.

Soraya Sarhaddi Nelson, NPR News, Cairo.

MONTAGNE: Our series continues tomorrow with a look at a different side of Egypt.

Unidentified Woman: Women's rights, human rights, economic rights, political rights - it's the whole thing. I think anyone's who's vocalizing their opinion and asking for change and asking for rights is going to be, you know, cracked down upon.

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MONTAGNE: Bedouin tribesmen, Christian minorities and divorced women in Egypt -we'll hear their stories on tomorrow's MORNING EDITION.

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