Looking Back at How Egypt Got to Today

This chapter reviews the sharp economic policy shifts from 1952, which witnessed the fruition of the drivers that brought the Free Officers to power, as Egypt’s new regime sought to establish its legitimacy and find an appropriate economic paradigm. The chapter starts with a description of public policies at the beginning of the period which lacked a particular economic philosophy beyond pragmatism, such as agrarian reform and the nationalization of the Suez Canal to fund the Aswan Dam. The chapter then recounts Egypt’s transformation in the 1960s into a state-led economy featuring a continued focus on mega projects, central planning, and the creation of a welfare society. The regime shifted course with the open-door (Infitah) policy in the 1970s with variations in adopting it during the 1980s. This was followed in the 1990s by various measures under the Economic Reform and Structural Adjustment Program, and then the shift in 2004 to pro-growth and investment policies until the interruption triggered by the Global Financial Crisis of 2008. Throughout this period, Egypt experienced several shocks but avoided deeper fundamental reforms by relying on external rents. The country thus failed to sustain growth and development.