More than thirty years after the launch in 1991 of the Economic Reform and Structural Transformation Program that was supposed to privatize much of Egypt’s state-owned economy, government interventions through laws and regulations remain so widespread that they virtually determine the level and composition of output in many economic sectors, even those in which the private sector owns majority stakes. In June 2022, the Egyptian government appeared ready to change this: it released a draft State Ownership Policy designed as a roadmap for the state to “exit” a number of economic sectors, reduce its role in some, and increase its role in yet others. The release was timed to influence the government’s negotiation of a new loan from the International Monetary Fund (IMF), its fourth since 2016. Neither the first loan, worth $12 billion, nor the accompanying 50 percent devaluation of the Egyptian Pound, had fixed underlying weaknesses in the Egyptian economy or improved the country’s exports. Consequently, when the Egyptian government requested a new IMF loan to help it confront the severe financial and economic crisis of early 2022, the Fund demanded structural reforms that would level the playing field for the domestic private sector and enable gains in productivity, domestic savings and surplus, and investment. Since then, the Egyptian government has confirmed its State Ownership Policy as the structural benchmark for the IMF loan program, and announced the partial privatization of several dozen state-owned companies.
Are these measures sufficient to address Egypt’s economic problems? Will the gains from selling shares in some of the more profitable state-owned companies offset the loss of government revenue from them? Are the government’s and IMF’s expectations of increased investment realistic? How likely are Gulf investors to commit funds on the scale sought by Egypt? And what are the implications of the State Ownership Policy (and the IMF loan program) for the Egyptian military’s prominent role in the economy?
The Malcolm H. Kerr Carnegie Middle East Center and the Tahrir Institute for Middle East Policy hosted a public panel to unpack these issues on Thursday, May 18 which featured contributions from Ishac Diwan, Robert Springborg, Hafsa Halawa, and Yezid Sayigh. The discussion was moderated by Timothy Kaldas and held in English.
Watch the recording:
Speaker Profiles:
Hafsa Halawa
Nonresident Scholar at the Middle East InstituteHafsa Halawa is an independent consultant working on political, social and economic affairs, and development goals across the Middle East and North Africa (MENA), and Horn of Africa regions. A former corporate lawyer, Halawa has held positions in government, the UN, INGOs/NGOs, corporate multinationals, private firms, and think tanks. She now consults independently for a similar broad set of clients on a variety of issues, at request.
Timothy Kaldas
Deputy Director, the Tahrir Institute for Middle East PolicyTimothy E. Kaldas is the Deputy Director of the Tahrir Institute for Middle East Policy. He is also an adjunct professor of international relations at the Autonomous University of Barcelona where he is pursuing his PhD. His current research interests focus on the political economies of MENA countries, regime competition and survival strategies and Egypt’s foreign policy. He lived in Cairo, Egypt for 12 years from 2008 to 2020 where he worked in several fields including as a visiting professor of politics at Nile University, a wedding photographer, an independent risk consultant, a consultant at UN Migration, and Director of Communications at the Munathara Initiative.
Robert Springborg
Research Fellow at the Italian Institute of International Affairs; Adjunct Professor at Simon Fraser University in VancouverRobert Springborg is Visiting Professor in the Department of War Studies, King’s College, London, and a non-resident research fellow of the Italian Institute of International Affairs. Until October 2013, he was Professor of National Security Affairs at the Naval Postgraduate School and Program Manager for the Middle East for the Center for Civil-Military Relations. He has worked as a consultant on Middle East governance and politics for USAID, the U.S. State Department, the UNDP, and various UK government departments.
Yezid Sayigh
Senior fellow, Malcom H. Kerr Carnegie Middle East CenterYezid Sayigh is a senior fellow at the Malcolm H. Kerr Carnegie Middle East Center in Beirut, where he leads the program on Civil-Military Relations in Arab States (CMRAS). His work focuses on the comparative political and economic roles of Arab armed forces, the impact of war on states and societies, the politics of postconflict reconstruction and security sector transformation in Arab transitions, and authoritarian resurgence.
Ishac Diwan
Director of Research of the Finance for Development LabIshac Diwan is the Director of Research for the Finance for Development Lab, a new institute located at the Paris School of Economics, where he also teaches economics. Until recently, he was Chair of the Socio-Economy of the Arab World at Paris Sciences et Lettres. He currently teaches at the Ecole Normale Superieure in Paris and has held in recent years teaching positions at Columbia University, School for International Public Affairs, and the Harvard Kennedy School. His current research interests focus on the political economy of the Middle East, in addition to broader development issues.