Egyptian President Abdel Fattah Al-Sisi’s call for a stronger role for the private sector is as paradoxical as it is ambitious, as the military continues to extend its grip on the economy and the size of the public sector, over-indebted, continues to swell. At the risk of dragging the country into a Lebanese-style spiral, some warn.
Inaugurating a new chemical plant at the end of 2021, Egyptian President Abdel Fattah Al-Sisi recognized the failure of his country’s public sector to grow the economy, confirming a “U-turn” (turnaround) in its economic policy initiated a few years ago and which remains just as paradoxical as it is ambitious, explains the British newspaper The Economist.
“We need the private sector. […] We have proven to be incompetent in management,” had recognized Al-Sissi, while the army – from which he comes and which was already in charge at the time of Hosni Mubarak – continues to extend its hold on the country’s economy, recalls The Economist.
While privileging the financial interests of an increasingly influential military caste, the power in place had been forced to begin this reversal under the impetus of the International Monetary Fund (IMF), in return for a loan of 12 billion dollars.
Adoption of laws to improve the business climate, colossal investments in the construction of new roads as well as a new industrial zone along the Suez Canal, liberalization of the exchange rate, start of digitization of public services, these reforms, of course indispensable, are however not sufficient to allow the private sector to take off as long as the army controls whole sections of the economy, explains The Economist.
Some […] talk about privatizing military-owned businesses. But the role of the army is opaque; no one knows the extent of his holdings.”
Another major challenge: even if the role of the army were to be reduced, “one wonders what Egyptian companies will be able to produce”, adds The Economist.
Many (companies) only operate at the end of the production chain. […] To create jobs and stimulate exports, Egypt must manufacture these products, not
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Bachir el Khoury