debt.
| CAPMAS | Central Agency for Public Mobilization and Statistics |
| EGP | Employment Guarantee Program |
| ERSAP | Economic Reform and Structural Adjustment Program |
| ESA | Employee Shareholder Association |
| FAO | Food and Agriculture Organization |
| FPL | Food Poverty Line |
| GASC | General Authority for Supply Commodities |
| GDP | Gross Domestic Product |
| GNP | Gross National Product |
| GODE | Gulf Organization for the Development of Egypt |
| HIECS | Household Income, Expenditure and Consumption Survey |
| HIES | Household Income and Expenditure Survey |
| IDA | International Development Association |
| IFIs | International financial institutions |
| IMF | International Monetary Fund |
| JICA | Japanese International Cooperation Agency |
| LE | Egyptian pound |
| LFSS | Labor Force Sample Survey |
| LPL | Lower Poverty Line |
| MOED | Ministry of Economic Development |
| MOP | Ministry of Planning |
| NGO | Non-governmental organization |
| NPC | National Planning Committee |
| NTM | Non-tariff measure |
| ODA | Official development assistance |
| PCDNP | Permanent Council for the Development of National Production |
| PRIDE | Project in Development and the Environment |
| REER | Real effective exchange rate |
| RMSE | Root mean squared error |
| SCAF | Supreme Council of the Armed Forces |
| SMEs | Small and medium enterprises |
| TFP | Total Factor Productivity |
| UNCTAD | United Nations Conference on Trade And Development |
| UNDP | United Nations Development Program |
| UNICEF | United Nations Children’s Fund |
| UPL | Upper Poverty Line |
| USAID | United States Agency for International Development |
| VAT | Value-added tax |
| WHO | World Health Organization |
| WVS | World Values Survey |
Introduction
When a country has a continuous history of more than five thousand years, dating the genesis of an issue requiring reform can become a little arbitrary. It seems that in Egypt’s case, no matter which date is chosen, it is almost always possible to look back to find pre-echoes of political-economy issues that are being discussed today. “This country is a palimpsest,” wrote Lady Duff Gordon in 1863 “in which the Bible is written over Herodotus, and the Koran over that” (Gordon 1969).
Even the time of the pharaohs offers important instances of matters with which present-day administrations continue to grapple. A modern policymaker would be no stranger, for example, to wrestling with problems of controlling and distributing the Nile’s waters; to managing an extremely centralized administration; to examining issues raised by the level of government intrusion in the economy; to assessing the consequences for the country’s cropping patterns of farmers’ not having to pay for irrigation water; to estimating the taxes to be levied in the coming year; to concerning himself with the role of religion in the polity; and many more questions that can trace their roots to pharaonic times.1
Or one could start with Napoleon’s expedition to Egypt (1798–1801) because it marked the beginning of the most recent serious interaction between Egypt and the West and has political, economic, social, and cultural consequences that continue to unfold to our day. Moreover, the reign of Muhammad Ali (1805–49), who assumed power after the departure of the French, and his successors saw the introduction of many policies—such as those relating to the ownership of land; the expansion of the canal network; the steady replacement of basin by perennial irrigation in order to meet the requirement of increasing the country’s limited cultivated and cropped area; the government’s sponsorship of industrialization; protection against imports and the consequences of removing it; the enlargement and modernization of the armed forces; the raising of revenues to pay for the policies of economic expansion; the construction of the Suez Canal and the resulting deeper integration of Egypt into the international economy; the rise of external indebtedness and the political vulnerability that it created; and several others that have molded much of Egypt’s contemporary economy and society. These policies delivered many of the strengths that buttress the country but also initiated problems that continue to engage the attention of today’s regimes.
This book has a more limited compass. The discussion focuses on the era since the Free Officers staged a coup on July 23, 1952, but refers back to earlier periods to show how an issue arose and how deeply, with time or reiteration, it has become embedded in the political and economic structures of the country. It discusses the principal economic challenges that Egypt faced and looks at the interaction of politics and economics that went into determining the policies devised to deal with the challenges. In discussing these policies, one must almost inevitably raise the question of whether other approaches would have been more effective.
Four points concerning the approach and the scope of the book should be stated at the outset. First, this is not a book about the politics of Egypt per se; rather, it deals with how political and economic variables interacted to produce the crucial economic outcomes for the country since 1952.
Second, its underlying assumption is that the most important responsibilities of a government are to create a better life for its citizens and to keep the country free from external domination. While many different elements go into the creation of a better and more secure life,
