Economic Development in Egypt: The Next Step
What’s next for Egypt? This is the one crucial question that people have on their minds. The Post-Mubarak era promises a lot, but can the new regime increase economic development in the country and get Egypt to its full potential?
Don’t get me wrong. I am not proclaiming that Egypt’s economy was in shambles under Mubarak. On the contrary, the then government’s adoption of liberal economic policies and massive foreign aid from the United States actually benefited Egyptian economic development. But under Mubarak, corruption and privatization of public assets caused an impediment to growth. Analysts have indentified Egypt and other middle-sized economies as a potential success story, but Mubarak was holding the country back. With 40 % of the population living on 2 dollars or less a day, there was bound to be resentment to the regime.
But enough of what has happened. This article is about the next step. In the post-Mubarak era, Egypt can take several different paths. In 1980, when Egypt was ranked 125th, China was ranked 165th in terms of GDP per capita. Fast-forward three decades, and China has left Egypt in its dust. But Egypt has the potential to grow rapidly. Mubarak’s liberalized policies need to continue to be implemented, but more importantly the new regime needs to focus on education and reaping the benefits of globalization. Networks like Al-Jazeera and the Internet have improved the people’s self-awareness, which would be beneficial to the economy in the long run. Egypt cannot rapidly grow over night. It needs to take small steps before taking a giant leap. And the first step is creating jobs for the young educated middle class by taking advantage of globalization.
The video here explains the technicalities on both a micro and macro level behind Egypt’s poor economic situation. Where do you think Egypt is heading? Post your comments in the section below!Udit Hinduja is a Program and Research intern with the SISGI Group’s Research Division. To learn more about the SISGI Group please visit www.sisgigroup.org.