Skip to main content
SpringerLink
Log in

Egypt’s Integration into the Global Economy and the Dynamics of Political Deliberalization

  • Chapter
  • First Online:
The International Dimensions of Democratization in Egypt

Part of the book series: Hexagon Series on Human and Environmental Security and Peace ((HSHES,volume 11))

Abstract

The process of integration into the global economy had a significant impact on the path of democratization in Egypt. This process initially started in 1974 when President Sadat introduced his open-door economic policy (Infitah). It was a programme of economic liberalization aimed at shifting Egypt away from Nasser’s legacy of a centralized economy and state-led development, toward a model of a free market capitalist economy. The programme accelerated from 1991 with Egypt concluding its first comprehensive stabilization and structural adjustment agreement with the World Bank and IMF. These initial agreements stipulated the liberalization of foreign trade and exchange markets, the elimination of price controls, and the privatization of the public sector , in exchange for World Bank loans and foreign debt forgiveness from the Paris Club . The 1991 agreement, along with successive agreements, came in response to a severe economic crisis that hit Egypt in the 1980s. Emblematic of a series of global transformations that extended the sway of the market system, such exposure made it extremely difficult for any country to escape market fluctuations.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 39.99
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Hardcover Book
USD 54.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Notes

  1. 1.

    The riots started with demonstrations of the workers in Helwan and Shubra el-Kheima in the suburb of Cairo, and then extended to Alexandria and other major cities. The protests were also joined by university students, pensioners, housewives, children, and migrant workers.

  2. 2.

    These revenues accounted for more than three-quarters of current account receipts and more than 40 percept of GDP by the mid-1980s, compared with just 6 per cent in 1974.

  3. 3.

    Al-Ahram Weekly (Cairo), Issue No. 436, 1–7 July 1999.

  4. 4.

    Al-Ahram Weekly (Cairo), Issue No. 775, 29 December–4 January 2006.

  5. 5.

    For a review of the main provisions of Law 8/1997, see at: http://www.amcham.org.eg/resources_publications/trade_resources/dbe/dbedtls.asp?sec=2&subsec=1.

  6. 6.

    These fields include land reclamation; fish, poultry and animal production; industry and mining; tourism; maritime transportation; refrigerated transportation for agricultural products and processed food; air transportation and related services; housing; real estate development; oil production and related services; hospitals and medical centers that offer 10 per cent of their services free of charge; water pumping stations; venture capital; computer software production; projects financed by the Social Fund for Development; leasing; and guarantees for subscription in securities. These 18 fields were not exhaustive as the Prime Minister had the discretionary power to add to such fields by executive decree. See at: http://www.amcham.org.eg/resources_publications/trade_resources/dbe/dbedtls.asp?sec=2&subsec=1.

  7. 7.

    For a review of the main provisions of Law 3/1998, see at: http://www.amcham.org.eg/resources_publications/trade_resources/dbe/dbedtls.asp?sec=2&subsec=1.

  8. 8.

    Al-Taqrîr Al-Istirâtîjî Al-‘Arabî 1997 (Arab Strategic Report 1997), (Cairo: Markaz Al-Ahrâm Lil Dirâsât Al-Siyâsiyyah Wa Al-Istirâtîjiyyah, 1998), p. 286.

  9. 9.

    For a review of Egypt’s international trade agreements, see at: <http://www.mfti.gov.eg/english/agreements.htm>.

  10. 10.

    To name a few examples, real GDP growth rate increased from 1.9 per cent in 1991/92 to 4.7 per cent in 1994/95, 5 per cent in 1997/98, 6.8 per cent in 2006/07 and 7.2 per cent in 2007/08. In nominal terms, exports grew from $3.9 billion in 1991/1992 to $7 billion in 2001/2002 and $18.4 billion in 2005/2006. The current account deficit, which was $634 million in 1990, turned into a surplus of $4.5 billion in 1993. After registering deficits, ranging from 1 to 3 per cent of GDP between 1997 and 2000, the current account has picked up since 2001, registering a surplus of 5 per cent in 2003 and 2004, and 2 per cent in 2005, in large part because of increased exports of petroleum products. The overall investment level reached 18.7 per cent of GDP, and foreign direct investment grew from $135.6 million in 1991 to $520.2 million in 1994 and $7.2 billion in 2006. The country’s balance of payment account registered surpluses of $1.8 billion in 2005 and $1 billion in 2006, which has helped the Central Bank increase its foreign reserves, which reached $22.7 billion (excluding gold) at the end of October 2006.

  11. 11.

    Al-Ahram Weekly (Cairo), Issue No. 805, 27 July–2 August 2006.

  12. 12.

    CAPMAS Statistical Year Book, (Cairo: CAPMAS, September 2009), p. 80.

  13. 13.

    “Human rights conditions in Egypt throughout the last ten years: Between market freedom and deterioration of citizens’ conditions.” A report prepared by the Land Center for Human Rights (Cairo), June 2004; and “Workers’ Strikes against Corruption and Savagery of the Market.” A report prepared by the Land Center for Human Rights (Cairo), February 2007.

  14. 14.

    “Egypt Human Development Report 2008,” (New York: United Nations Development Program & The Egyptian Institute for National Planning, 2008), p. 35.

  15. 15.

    “Labor Conditions in Egypt.” A Report prepared by the Land Center for Human Rights (Cairo), 2003.

  16. 16.

    In January 2001, the Egyptian government liberalized the exchange rate regime. This allowed the pound to depreciate immediately against the dollar from LE 3.30 to LE 3.85, with only room to shift within the band of one and half per cent either way. In July 2001, the rate shifted again to LE 3.90. In August 2001 and following a policy of very gradual devaluation in the first eight months of 2001, the government took the step of setting a new exchange rate of the Egyptian pound that now stood at LE 4.15 to $1, while at the same time doubling the width of the currency band to plus or minus 3 per cent. In December 2001, the dollar-pound exchange rate went officially from LE 4.26 to LE 4.50, which represented a further 40 per cent devaluation of the pound comparable to its value at the beginning of 2001. Toward the end of 2003, the dollar price in the black market went beyond LE 7, making a difference of around 1 Egyptian pound between the formal and informal exchange rate. This considerable upsurge was followed by a slight decline in the dollar’s price to reach LE6.90–LE6.70 over the first quarter of 2004.

  17. 17.

    CAPMAS Statistical Year Book, op.cit., p. 225.

  18. 18.

    See the CBE annual reports from 2002/2003 to 2007/2008; at: http://www.cbe.org.eg/English/Economic+Research/Publications/.

  19. 19.

    “Egypt Human Development Report 2008,” op.cit., p. 32.

  20. 20.

    CAPMAS Statistical Year Book, op.cit., p. 225.

  21. 21.

    Al-Ahram Weekly, Issue No. 839, 5–11 April 2007.

  22. 22.

    CAPMAS Statistical Year Book, op.cit., p. 225.

  23. 23.

    The CBE annual report (2008); at: http://www.cbe.org.eg/English/Economic+Research/Publications/.

  24. 24.

    According to the 2004/2005 Household Income, Expenditure and Consumption Survey (HIECS) conducted by CAPMAS, the average Egyptian household spent approximately 40 per cent of its income on food products. See the HIECS at: <www.capmas.gov.eg>.

  25. 25.

    Information about the wage levels is available on the CAPMAS website. See also CAMPAS Statistical Year Book, op.cit., p. 225.

  26. 26.

    “Arab Republic of Egypt: Poverty Assessment Update.” A World Bank Report No. 39885—EGT (Vol. 1) 16 September 2007.

  27. 27.

    “Arab Human Development Report 2009: Challenges to Human Security in the Arab Countries,” (New York: United Nations Development Program, 2009), p. 113.

  28. 28.

    Al-Ahram Weekly (Cairo), Issue No. 878, 3–9 January 2008.

  29. 29.

    Al-Ahram Weekly (Cairo), Issue No. 937, 5–11 March 2009.

  30. 30.

    Al-Ahram Weekly (Cairo), Issue No. 532, 3–9 May 2001.

  31. 31.

    “Egyptian Citizens’ Perceptions of Transparency and Corruption”. The Final Report of the 2009 National Public Opinion Survey at: http://www.cipe.org/sites/default/files/publication-docs/2009%20Egypt%20National%20Survey%20Report%20EN.pdf.

  32. 32.

    Al-Taqrîr Al-Istirâtîjî Al-‘Arabî 2007/2008 (Arab Strategic Report 2007/2008), (Cairo: Markaz Al-Ahrâm Lil Dirâsât Al-Siyâsiyyah Wa Al-Istirâtîjiyyah, 2008), p. 442.

  33. 33.

    “Why Egypt's young dream of life abroad,” BBC News, 6 November 2009; at: <http://news.bbc.co.uk/2/hi/africa/8342741.stm>.

  34. 34.

    For a detailed review of these strikes, see Al-Taqrîr Al-Istirâtîjî Al-‘Arabî 2007/2008 (Arab Strategic Report 2007/2008), op.cit., pp. 422–429.

  35. 35.

    Ibid.

  36. 36.

    Al-Ahram Weekly (Cairo), Issue No. 537, 7–13 June 2001.

  37. 37.

    Al-Ahram Weekly (Cairo), Issue No. 765, 20–26 October 2005.

  38. 38.

    Ibid.

  39. 39.

    “The Right to Adequate Food in Egypt.” The Initial report (Art. 1–15) submitted by FIAN International on Egypt at the occasion of the 22nd session of the Committee on Economic, Social and Cultural Rights (Spring 2000).

  40. 40.

    “Echoes of the Land,” Al-Ahram Weekly (Cairo), Issue No. 735, 24–30 March 2005.

  41. 41.

    “Violence, Land, and the State in Egypt.” A report prepared by the Land Center for Human Rights (LCHR), Cairo, May 2006.

  42. 42.

    Al-Taqrîr Al-Istirâtîjî Al-‘Arabî 1997 (Arab Strategic Report 1997), op.cit., pp. 292–294.

  43. 43.

    Al-Taqrîr Al-Istirâtîjî Al-‘Arabî 1995 (Arab Strategic Report 1995), op.cit., pp. 439–446.

  44. 44.

    For a review of Al-Sha‘b newspaper’s treatment of the ERSAP during the 1990s, see Al-Taqrîr Al-Istirâtîjî Al-‘Arabî 1994 (Arab Strategic Report 1994), op.cit., p. 359.

  45. 45.

    Al-Ahram Weekly (Cairo), Issue No. 463, 6–12 January 2000.

  46. 46.

    “Sub-Saharan Africa: From Crisis to Sustainable Growth,” (Washington DC: World Bank, 1989); at: http://www.gbv.de/dms/zbw/256156794.pdf.

  47. 47.

    “Better Governance for Development in the Middle East and North Africa: Enhancing Inclusiveness and Accountability,” (Washington DC: World Bank, 2003); at: https://openknowledge.worldbank.org/bitstream/handle/10986/15077/271460PAPER0Be1ance0for0development.pdf?sequence=1.

  48. 48.

    World Bank, “Most Improved in Doing Business 2008”; at: <http://www.doingbusiness.org/reforms/top-reformers-2008>.

  49. 49.

    International Monetary Fund, “Arab Republic of Egypt: 2010 Article IV Consultation”, IMF Country Report No. 10/94, Washington, April 2010; at: http://www.mof.gov.eg/MOFGallerySource/English/April2010%20IMF%20Article%20IV%20Consultation.pdf.

  50. 50.

    Ibid.

  51. 51.

    See the World Bank website—Egypt: Country Brief; at: <http://siteresources.worldbank.org/INTEGYPT/Resources/EGYPT-ENG2009AM.pdf>.

  52. 52.

    “U.S. Support for the Egyptian People,” US State Department, 3 March 2013; at: http://www.state.gov/secretary/remarks/2013/03/205579.htm.

  53. 53.

    “IMF delegate claims Egypt loan to be finalized in May,” Al-Masry Al-Youm (Cairo), 24 April 2013.

  54. 54.

    “Economic Transformation in MENA: Delivering on the Promise of Shared Prosperity.” International Monetary Fund, G-8 Summit, 27 May 2011; at: <http://www.imf.org/external/np/g8/pdf/052711.pdf>.

  55. 55.

    “A new loaf: Will Egypt tighten bread subsidies?” Al-Masry Al-Youm (Cairo), 17 October 2012.

  56. 56.

    “Cutting Egypt’s budget deficit: Who will pay the bill?” Al-Ahram (Cairo), 23 May 2013.

  57. 57.

    “Perhaps poor-friendly,” Al-Ahram Weekly (Cairo), 21 May 2013.

  58. 58.

    “Leftist opposition figures slam IMF Egypt loan, call for state-led economy,” Al-Ahram (Cairo), 8 April 2013.

  59. 59.

    Ibid.

  60. 60.

    “Labour strikes and protests double under Morsi,” Daily News Egypt, 28 April 2013; at: <http://www.dailynewsegypt.com/2013/04/28/labour-strikes-and-protests-double-under-morsi/>.

  61. 61.

    “5232 social, economic and labour protests held in 2013: ECESR,” Daily News Egypt, 7 July 2014; at: <http://www.dailynewsegypt.com/2014/07/07/5232-social-economic-labour-protests-held-2013-ecesr/>.

  62. 62.

    “Workers say SCAF has no right to ban strikes,” Al-Ahram (Cairo), 10 April 2011.

  63. 63.

    “World Report Chapter: Egypt 2012.” Human Rights Watch, January 2012; at: <http://www.hrw.org/world-report-2012/world-report-2012-egypt>.

  64. 64.

    “The Condition of Egyptian Workers: One Year After the Brotherhood’s Rule.” A report issued by the Center for Trade Union & Workers Services (Cairo), July 2013; at: http://www.solidar.org/IMG/pdf/ctuws2one_year_of_trade_union_freedom_violations_during_morsi_s_regime.pdf.

Author information

Authors and Affiliations

  1. Political Science, Port Said University, Port Said, Egypt

    Gamal M. Selim

  2. Political Science, The British University in Egypt, Cairo, Egypt

    Gamal M. Selim

Authors
  1. Gamal M. Selim
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Gamal M. Selim .

Rights and permissions

Reprints and permissions

Copyright information

© 2015 Springer International Publishing Switzerland

About this chapter

Cite this chapter

Selim, G.M. (2015). Egypt’s Integration into the Global Economy and the Dynamics of Political Deliberalization. In: The International Dimensions of Democratization in Egypt. Hexagon Series on Human and Environmental Security and Peace, vol 11. Springer, Cham. https://doi.org/10.1007/978-3-319-16700-8_5

Download citation

Publish with us

Policies and ethics

Search

Navigation