Reinvigorating Egypt’s Economy

While blaming the revolution is not a persuasive explanation for Egypt’s current economic woes, its appeal to many Egyptians is understandable. Over the last few months, their economic situation has gone from bad to worse.

NEWPORT BEACH – Some two years into Egypt’s grass-roots revolution, the country’s economy is in a worrisome downward spiral. A growing number of people, inside and outside of the country, are starting to blame the revolution itself for derailing an economy that was growing, reducing its external-debt burden, and maintaining a comfortable cushion of international reserves.

Blaming the revolution is the wrong approach to Egypt’s current economic woes. Yet its appeal to some is understandable, given that the country’s economic situation has continued to worsen over the last few months. Growth is anemic, unemployment is high, and new investment has fallen off dramatically – all of which complicate already-difficult financial, social, and political conditions. The result is a growing threat of several vicious circles at once.

Domestic supply disruptions are now fueling inflation and compounding the problems of a subsidy-laden national budget. They have also aggravated the weakness of external finances, contributing to a sharp drop in international reserves that has been contained only by exceptional loans and deposits from abroad.

To continue reading, please log in or enter your email address.

To read this article from our archive, please log in or register now. After entering your email, you'll have access to two free articles from our archive every month. For unlimited access to Project Syndicate, subscribe now.

required

By proceeding, you agree to our Terms of Service and Privacy Policy, which describes the personal data we collect and how we use it.

Log in

http://prosyn.org/Y5i4ko2;

Cookies and Privacy

We use cookies to improve your experience on our website. To find out more, read our updated cookie policy and privacy policy.