Challenges of Egypt's Economic Transition

Nov. 10, 2011, 7:24 p.m.

The Carnegie Endowment recently published a report by Ibrahim Saif about the economic transition Egypt must undergo to facilitate the transition from authoritarianism to representative government. The report suggests economic policies the government should adopt in the short-term and medium-term (i.e. 3-5 years following presidential and parliamentary elections). The report notes that successful transition will require significant  social, political and economic changes.

The Egyptian economy is going through a critical period as the country transitions to democracy. While the shift from authoritarianism is certainly welcome, it has inevitably incited instability unknown to Egypt for the past thirty years. The implementation of economic reform amid this uncertainty is particularly challenging as political demands take precedence. The state attempted several times to revive the Egyptian economy since the Infitah, or “open door,” policy initiated by President Anwar Sadat in the mid-1970s. Successive, though unsuccessful, reform programs during the 1990s contributed to the pervasive poverty that served as a central driver of the 2011 Egyptian revolution and persists today. Past experiences can provide useful lessons for what to avoid in the future, even if they are unable to impart what exactly should be done.

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