SOAS Research Online

Abstract

This Thesis analyses Egyptian economic policy making in the 1970s. Despite recommendations for decentralisation and greater use of market forces, only limited reforms occurred. These resulted in a big increase in resources available and the development of new sectors. A central hypothesis put forward is that the interaction of the sectors made reform hard. These were strong incentives to maintain the status quo and not decentralise public sector plus government decision making. These included the need to maintain employment in the public services in view of the overall shortage of jobs. There was also pressure to maintain the country's socialist legacy so as to maintain the loyalty of the urban working classes. The impact of rent seeking activity is looked at as a source of inertia, preventing reform. As a result of these pressures the government felt able to reform the foreign sector but not the domestic economy. Changing the trade and exchange systems would create new opportunities which were not available, or not thought to be available in industry and agriculture. The problems encountered in economic policy making are examined in four broad areas. The investment and planning system is analysed in order to see how consistent and comprehensive development strategy was. Pricing policy is dealt with in relation to cotton and public industry because of its importance in the economy. The implications of these policies are then examined in terms of public finance and the monetary consequences of the budget deficit. Finally, the foreign sector is looked at with special attention to the areas of opportunity: oil revenues, Suez Canal tolls and emigrant remittances. Conclusions are then drawn about the effects of the liberalisation and the reasons why it took such a partial form.