The Political Economy of Reforms in Egypt

Khalid Ikram

Description

An indispensable study of the Egyptian economy from 1952 to the present day
What are the long-term structural features of the Egyptian economy? What are the factors that have facilitated or inhibited its performance? This crucial and timely work answers these questions and more by examining the most important economic decisions to have impacted the Egyptian economy since 1952 and the political factors behind them.
Drawing on Khalid Ikram's extensive knowledge of economic policymaking at the highest levels, The Political Economy of Reforms in Egypt, 1952-2016 lays out the enduring features of the Egyptian economy and its performance since 1952 before presenting an account of policy-making, growth and structural change under the country's successive presidents to the present day. Topics covered include agrarian reforms; the Aswan High Dam; the move towards Arab socialism and a planned economy; the reversal of strategy and the infitah; fiscal, monetary, and exchange-rate policies; consumer subsidies; external debt crises; negotiations between Egypt and international donors and financial institutions; privatization; labor and employment; and poverty and income distribution. The analysis concludes with an examination of institutional reforms and development strategies to tackle the Egyptian economy's structural problems and lay the foundation for sustained and rapid growth.
Written from the point of view of a 'participant-observer,' this book will be indispensable to students of political economy, to scholars of Egypt and the Middle East, and to the general reader who wishes to understand, especially from the wealth of insider information provided, how domestic and international politics and economics can interact to shape decisions that promote, or prevent, economic reforms.
Introduction
1. The Political Economy of Economic Reform
2. Recurring Issues in Egypt's Political Economy
3. Egypt's Economic Performance since 1952
4. Population: Dividend or Nightmare?
5. Major Political Economy Issues in the Abdel Nasser Era, 1952-70
6. Major Political Economy Issues in the Sadat Era, 1970-81
7. Major Political Economy Issues in the Mubarak Era, 1981-2011
8. Post-Mubarak Issues
9. The Present and the Future

Sujets

• United States Agency for International Development
• Microeconomics
• Economics
• Business
• Agence des États-Unis pour le développement international

Informations

• Publié par: The American University in Cairo Press
• Date de parution: 21 mars 2018
• Nombre de lectures: 0
• EAN13: 9781617978661
• Langue: English

Extrait

Copyright © 2018 by The American University in Cairo Press 113 Sharia Kasr el Aini, Cairo, Egypt 420 Fifth Avenue, New York, NY 10018 www.aucpress.com
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher.
ISBN: 978 977 416 794 2 eISBN: 978 161 797 866 1
Version 1
For Shirin
Contents
List of Figures and Tables
Preface
Acknowledgments
Abbreviations
Introduction
The Importance of Economic Health
Some Conclusions
1 The Political Economy of Reform: A Survey with Special Reference to Egypt
Interest Groups, Crises, and Economic Reforms
Military and Economic Crises
Political Institutions and Policy Reform
“Tragedy of the Commons” and the Impact on the Environment
The Costs and Benefits of Policy Reforms
The “Insider–Outsider” Conundrum
Political Economy and Dictatorships
The Role of the Foreign Patron
The Political Economy of External Assistance
Donors’ Views
Foreign Aid to Egypt: Benefit or Bane?
2 Challenges and Performance, 1952–
Economic Growth
Population, Labor Force, and Unemployment
Structure of Employment
Public Finance
Poverty
Income Distribution
The External Sector
External Debt
Annex: A Note on GDP Estimates
3 The Population and Related Issues
4 Political Economy in the Nasser Period, 1952–
Agrarian Reforms
The Cultivable Area: Water and the Aswan High Dam
Changes in the Role of the State in the Economy
Industrial Development
Elements of a Summing Up
5 Political Economy in the Sadat Period, 1970–
Economic Background to the Infitah
The Infitah
Pressures on the Economy and the Riots of
Relations with the IMF and the World Bank
Toward a Strategy to Address Underlying Grievances
6 Political Economy in the Mubarak Period, 1981–
Overall Performance
Mubarak’s Philosophy of Political Economy of Reform
External Debt Issues
Economic Reform and Structural Adjustment Program (ERSAP)
Crony Capitalism
Developments, 2000–
7 After Mubarak, 2011–
A Brief Review of the Political Timeline
Mohammed Morsi: June 30, 2012–July 3,
Abd al-Fattah al-Sisi
Political Instability and Economic Growth
Economic Performance, 2011–
Sustainable Development Strategy: Vision
From Vision to Realization
8 The Task Ahead
What Is the General Challenge for Egypt’s Policymakers?
What Strategies Would Help to Meet Egypt’s Development Challenges?
GDP Growth and Its Drivers
Economic Governance

Annex
Notes
References
Figures and Tables
Figures
1 Investment and domestic savings, 1965–2016 15
2 GDP and growth rate, 1965–201685
3 Growth rates of GDP per capita in 2005$, 1965–201686
4 Structure of GDP, 1965 and 201687
5 Investment and savings, 1965–201688
6 Unemployment, 1960–201689
7 Structure of employment, 1960, 1980, and 201691
8 Revenue, expenditure, and overall deficit, 1965–201693
9a Composition of tax revenue, 1965–2016102
9b Composition of expenditures, 1965–2016103
10 Poverty headcount, 1982–2015106
11 Gini index, 1991–2015109
12 Exports, imports, and external balance, 1965–2016114
13 Net ODA as percent of gross capital formation, 1965–2015121
14 Total external debt and concessional portion, 1970–2015127
15 Dependency ratios, 1950–2050 137
16 Exports, imports, and external balance as percent of GDP, 1970–81219
17 Public and private gross fixed capital formation, 1982–2011 273
18 Real GDP growth, 2005–2016 314
Tables
1 Population, 1897–2050 (thousands)135
2 The “Ten Commandments” of the Washington Consensus328
3 Precision of plan forecasts, 1983–2002363

Note: Unless otherwise specified, the figures and tables are based on the IMF and World Bank databases.
Preface
T his book describes the interaction between politics and economics that went into dealing with some of the most important issues of economic policymaking in Egypt since 1952. A certain degree of overlap with my earlier book— The Egyptian Economy: 1952–2000: Performance, Policies and Issues (London: Routledge, 2006)—is inevitable. The major distinction between the two is that the earlier book contained a good deal of technical analysis and was lighter on the interaction with politics. The present work tries to rectify the imbalance. However, as before, the focus remains on the durable, structural issues that policymakers confronted, rather than on day-to-day problems.
I have been engaged with the Egyptian economy since 1975 as senior economist in the World Bank responsible for Egypt, as director of the World Bank’s Egypt department, and as a consultant for international organizations and private think tanks. During these years of association, I have been fortunate to have had the opportunity to access many diverse sources of information and advice. Thus, in addition to published material, the present book draws on unpublished studies, background papers, memoranda, and back-to-office reports of the World Bank, the International Monetary Fund, and other international and national organizations.
It has also benefited from discussions with several present and past Egyptian policymakers, politicians of every hue, bureaucrats, scholars and students, members of Egyptian and foreign think tanks and civil society, bankers, lawyers, journalists, diplomats from countries providing assistance to Egypt, and of course with former colleagues in the World Bank and the International Monetary Fund. I am grateful for the candor and the detail with which they discussed their views, and for their unvarnished assessments of political and economic issues confronting Egypt and the country’s policy responses to them. Many of the insights are directly quoted in the text and have been referenced. However, this book is not a journalistic exposé and confidences have been respected; where identification might breach confidentiality, or the source requested anonymity, comments have been paraphrased without attribution.
The Egyptian economy faces a number of difficulties. The proportion of young people in the population is expanding rapidly and their expectations for the future are growing. These developments are taking place in an environment in which world economic growth has slowed, in which the benefits of economic integration and free trade are being called into question, and in a region in which threats of terrorism have added to political uncertainty. History has shown that on many crucial issues, economics and politics are inextricably intertwined. Overcoming the economic difficulties will call on all the skill and the wisdom that Egypt’s policymakers and citizens can muster, together with learning from the experience of successes and failures in the past. I hope this book can help in the task.
Acknowledgments
I n a previous book on the Egyptian economy (Ikram 2006), I wrote that “anyone who works on Egypt will recognize how quickly he incurs debts that beggar his ability to repay them adequately.” The passage of time has only deepened my debt and increased my inability to discharge it. From prime ministers and cabinet members, through bureaucrats, academics, members of think tanks and civil society, politicians from all sides of the political spectrum, businessmen, journalists, and university students, numerous Egyptians have given liberally of their time to discuss economic and political events, no matter how sensitive. They all have helped to shape my thinking on economic issues and policymaking in Egypt. It is impossible to thank them all individually, but I must make an attempt to acknowledge those whose influence was the largest, even though several of them, sadly, are no longer among us.
My biggest intellectual debts concerning Egyptian economic development are to Robert Mabro, Hanaa Kheir el-Din, Heba Handoussa, Heba Nassar, Samir Radwan, Ahmed Galal, Galal Amin, Bent Hansen, Mahmoud Abdel Fadil, Adel Bishai, Gouda Abdel Khalek, Karima Korayem, Ragui Assaad, Nader Fergany, Heba el-Leithy, and John Waterbury.
Since this book is chiefly concerned with policy, the insights of policymakers, past and present, bulk large in the discussions; indeed, one might almost consider them as participants in its writing. I am grateful to many of them for so freely discussing the issues that they confronted and the reasons why they undertook the policies that they adopted, and also why they did not enact others. For the subject matter of this book, I learned much from Kamal al-Ganzoury, Abdel Moneim el-Kaissouni, Abdel Razzaq Abdel Meguid, Abdel Aziz Hegazi, Hilmi Abdel Rahman, Atef Ebeid, Ismail Sabri Abdullah, Hamed el-Sayeh, Salah Hamed, Zaki Shafei, Hazem el-Beblawi, Sultan Abu Ali, Zaafer al-Bishry, Osman Muhammad Osman, Ahmed Abou Ismail, Ahmed al-Dersh, Nabil Fahmy, Mahmoud Mohieldin, Youssef Boutros-Ghali, Wagih Shindy, Ismail Hassan, and Ali Negm.
A major part of Egypt’s economic strategy has rested on access to external aid, therefore it is vital to look at how bilateral donors and international agencies viewed E