Overview on the modern history of Egyptian economy
Thursday، 18 April 2013 12:00 AM
The Egyptian economy is one of the Middle East's most versatile economies, which the sectors of agriculture, industry, tourism and services engaged in comparable proportions in its basic configuration. The average number of the work force in Egypt is about 26 million, according to 2010 estimates. They are distributed on the service sector (51%), agriculture sector (32%) and the industrial sector (17%).
The Egyptian economy depends basically on agriculture, Suez Canal revenues, tourism, taxation, cultural and media production, petroleum exports and remittances of more than three million Egyptians abroad, mostly in the Gulf States, the United States, Europe and Australia.
In the wake of the January 25th Revolution, the country exerted strenuous efforts to restore the economy on right track and overcome the obstacles through rallying the efforts internally and openness to the world to act dynamically in the world's economy and finance.
The modern history of Egyptian economy:
There are several stages in the Egyptian economy since 1952. They can be summarized as follows:
1- 1952–1966: Import substitution and nationalization, for which the first program of industrialization was launched in 1957, was led by the public sector in heavy industries such as iron, steel and chemical industries. Nationalization reduced the relative importance of the private sector.
2- 1967–1973: Entering the war adversely affected the performance of the economy and public sector role in import substitution.
3- 1974–1981: Economic openness was introduced to encourage Arab and foreign investment through a series of incentives and trade liberalization. The economy expanded, but this proved unsustainable and growth consequently slacked.
4- 1982–1990: The economic conference, which was held in February 1982, determined the development march. During the conference, specialists and experts agreed on the importance of drawing an ambitious and continuous development strategy through five-year plans to began in 1982.
5- 1991–2007: Economic reform was introduced to meet the requirements of international institutions, lenders and donors. The reform included greater incentives to the private sector in all economic activities.
6- 2008-2011: The spillover of the global financial crisis and soaring food prices, especially of grains, led to calls on the government to provide more immediate assistance and to strike a "new deal" on agriculture policy and reform. Egypt faced the long term supply and demand side effects of the global financial crisis on the national economy. Egypt's gains from annual growth rates benefited the rich, and failed to reduce poverty, which increased to some 50% in 2011, leading to socioeconomic and political instability and popular Revolution on January 25, 2011.
7- 2012: Egypt needed to strengthen its economy to exogenous shocks, improve productivity and competition and invest in human capital through social protection from a human right-based approach to address market failures and build good trust in governance. The biggest questions for the new president-elect and new government are how to address corruption at the level of the bureaucracy, citizens and parties? How to meet the expectations of the Egyptian people? And how to bring people from different backgrounds and different voices to support social accountability during economic and political transition to an active State?
8- The urgent plan to activate the economy and establishment of social justice:
The urgent plan has been approved in 2013/2014 by the cabinet to stimulate the economy and establish social justice.
It was represented by the Ministry of Planning in coordination with the economic ministerial group of social justice, which is based on pumping additional funds in the range of 30 billion pounds to specific activities and projects, the citizens would see their return on the overall economic and social life, in a time span that does not exceed nine months. At the same time these activities and projects help establish rapid and sustainable economic growth and overall social justice.
9- Socio-economic plan development plan for 2015-2016:
The Ministry of Planning presented the Social and Economic Development Plan 2015-2016 in the framework of developing planning system, by working on a number of key themes that include the preparation of a long-term strategic framework shared by all sectors of the state, represented in the government, the private sector and civil society, and they share responsibilities.
The economic development plan is prepared for each region and social development plan for each province, which contributes to boosting economic growth and achieving social justice. The development strategy targeted to give more room to citizen in direct participation in the plan preparation and follow-up by the trend towards decentralization.