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At this point, I would argue that the greatest barrier to development in Egypt is political instability.
Investors, both within Egypt and from other countries, are not likely to want to invest if the political situation is unsettled. They will be afraid that further political unrest will ruin their investments and make them lose their money. At this point, it is not clear when or even whether the Egyptian military will give up political power. If they do not give up power, it is possible that another revolution might start, disrupting economic activity throughout the country. If they do give up power, it is not at all clear what kind of government the Muslim Brotherhood (who would presumably take power) would institute.
Businesses do not like uncertainty. Egypt's political environment is extremely uncertain. This is a major barrier to economic development.
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