A study has cast doubt on Egypt's ability to implement the reforms necessary for it to change course on decades of economic struggles.
The policy brief, published by the Washington-based Peterson Institute for International Economics on Tuesday, says Cairo is unlikely to deviate from its “well-rehearsed playbook” of returning to fixed exchange rates, relying on geopolitical rents and permitting its military to be deeply entrenched in the economy.
“Countries reform one day after and that means especially the elites of that country feel that their political survival depends on changing course,” Adnan Mazarei, one of brief's co-authors, told The National.
“At the moment … the leads in the army in Egypt think they can handle the political consequences of the current difficulties."
Egypt's economy has faced numerous challenges in recent years, including high debt levels, inflation and foreign exchange shortages.
Effects from wars in Ukraine and Gaza, as well as the Covid-19 pandemic, have only added to these woes.
To help boost Egypt's economy, the International Monetary Fund in March approved an $8 billion loan package, adding $5 billion to a $3 billion agreement signed in 2022.
The injection helped Egypt to avoid a full-blown crisis, which the authors say could be attributed to its “long-standing insistence on maintaining an overvalued currency through fixed exchange rates”.
“In this as in previous instances, international assistance has been provided at least in part because of Egypt’s critical importance for stability in the Middle East,” said the brief, titled Egypt's 2023-24 Economic Crisis: Will this Time be Different?
As part of the agreement, Egypt raised its interest rates and began floating its currency against the US dollar.
While the policy brief acknowledges action Cairo has taken, it questions if the government is committed to implementing deeper reforms.
It offered two potential scenarios for Egypt.
In the first, it calls on Cairo to implement sustained reforms that include reducing the military's economic dominance, allowing for private sector growth and fair competition, as well as reconsidering the reliance on geopolitical rents.
It also calls on Egypt to abandon the fixed exchange rate.
"Of course, the transition won’t be easy. Inflationary pressures, especially on food prices, are a significant concern," the brief says.
"But with targeted social safety nets, the government can protect the most vulnerable while allowing the economy to breathe."
The other, more likely scenario is one where Egypt returns to fixed exchange rates and other measures it has used in the past.
Elites' interests in the status quo, among other factors, mean it is unlikely that sustained consequential changes are pushed through.
“We are pessimistic,” Mr Mazarei said.
He said it was unclear if the programme could break this cycle.
"Trouble comes, they reach an agreement with the IMF, often involving ... some monetary tightening and some exchange rate depreciation, or sometimes even actual floating at the exchange rate," Mr Mazarei said.
"But then when things stabilise, they go back to their own ways in terms of policies, but they also do not do the deep reforms that are needed."
At the conclusion of its third review of the extended loan programme with Egypt last week, the IMF said some of Cairo's efforts to restore price stability have brought positive results.
But there was still need for more reforms, the IMF said.
It said Egypt must accelerate its divestment programme, pursue reforms to set up new firms, expedite trade facilitation practices and create a “level playing field” that would avoid unfair competitive practices by state-owned firms.
The IMF also repeated the importance of the flexible exchange rate regime.
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Fixtures
Tuesday - 5.15pm: Team Lebanon v Alger Corsaires; 8.30pm: Abu Dhabi Storms v Pharaohs
Wednesday - 5.15pm: Pharaohs v Carthage Eagles; 8.30pm: Alger Corsaires v Abu Dhabi Storms
Thursday - 4.30pm: Team Lebanon v Pharaohs; 7.30pm: Abu Dhabi Storms v Carthage Eagles
Friday - 4.30pm: Pharaohs v Alger Corsaires; 7.30pm: Carthage Eagles v Team Lebanon
Saturday - 4.30pm: Carthage Eagles v Alger Corsaires; 7.30pm: Abu Dhabi Storms v Team Lebanon
Mohammed bin Zayed Majlis
Last 10 NBA champions
2017: Golden State bt Cleveland 4-1
2016: Cleveland bt Golden State 4-3
2015: Golden State bt Cleveland 4-2
2014: San Antonio bt Miami 4-1
2013: Miami bt San Antonio 4-3
2012: Miami bt Oklahoma City 4-1
2011: Dallas bt Miami 4-2
2010: Los Angeles Lakers bt Boston 4-3
2009: Los Angeles Lakers bt Orlando 4-1
2008: Boston bt Los Angeles Lakers 4-2
COMPANY%20PROFILE
%3Cp%3E%3Cstrong%3EName%3A%20%3C%2Fstrong%3EEjari%3Cbr%3E%3Cstrong%3EBased%3A%20%3C%2Fstrong%3ERiyadh%2C%20Saudi%20Arabia%3Cbr%3E%3Cstrong%3EFounders%3A%20%3C%2Fstrong%3EYazeed%20Al%20Shamsi%2C%20Fahad%20Albedah%2C%20Mohammed%20Alkhelewy%20and%20Khalid%20Almunif%3Cbr%3E%3Cstrong%3ESector%3A%20%3C%2Fstrong%3EPropTech%3Cbr%3E%3Cstrong%3ETotal%20funding%3A%20%3C%2Fstrong%3E%241%20million%3Cbr%3E%3Cstrong%3EInvestors%3A%20%3C%2Fstrong%3ESanabil%20500%20Mena%2C%20Hambro%20Perks'%20Oryx%20Fund%20and%20angel%20investors%3Cbr%3E%3Cstrong%3ENumber%20of%20employees%3A%20%3C%2Fstrong%3E8%3C%2Fp%3E%0A
Our legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Results:
5pm: Baynunah Conditions (UAE bred) Dh80,000 1,400m.
Winner: Al Tiryaq, Dane O’Neill (jockey), Abdullah Al Hammadi (trainer).
5.30pm: Al Zahra Handicap (rated 0-45) Dh 80,000 1,400m:
Winner: Fahadd, Richard Mullen, Ahmed Al Mehairbi.
6pm: Al Ras Al Akhdar Maiden Dh80,000 1,600m.
Winner: Jaahiz, Jesus Rosales, Eric Lemartinel.
6.30pm: Al Reem Island Handicap Dh90,000 1,600m.
Winner: AF Al Jahed, Antonio Fresu, Ernst Oertel.
7pm: Al Khubairah Handicap (TB) 100,000 2,200m.
Winner: Empoli, Pat Dobbs, Doug Watson.
7.30pm: Wathba Stallions Cup Handicap Dh80,000 2,200m.
Winner: Shivan OA, Patrick Cosgrave, Helal Al Alawi.
Milestones on the road to union
1970
October 26: Bahrain withdraws from a proposal to create a federation of nine with the seven Trucial States and Qatar.
December: Ahmed Al Suwaidi visits New York to discuss potential UN membership.
1971
March 1: Alex Douglas Hume, Conservative foreign secretary confirms that Britain will leave the Gulf and “strongly supports” the creation of a Union of Arab Emirates.
July 12: Historic meeting at which Sheikh Zayed and Sheikh Rashid make a binding agreement to create what will become the UAE.
July 18: It is announced that the UAE will be formed from six emirates, with a proposed constitution signed. RAK is not yet part of the agreement.
August 6: The fifth anniversary of Sheikh Zayed becoming Ruler of Abu Dhabi, with official celebrations deferred until later in the year.
August 15: Bahrain becomes independent.
September 3: Qatar becomes independent.
November 23-25: Meeting with Sheikh Zayed and Sheikh Rashid and senior British officials to fix December 2 as date of creation of the UAE.
November 29: At 5.30pm Iranian forces seize the Greater and Lesser Tunbs by force.
November 30: Despite a power sharing agreement, Tehran takes full control of Abu Musa.
November 31: UK officials visit all six participating Emirates to formally end the Trucial States treaties
December 2: 11am, Dubai. New Supreme Council formally elects Sheikh Zayed as President. Treaty of Friendship signed with the UK. 11.30am. Flag raising ceremony at Union House and Al Manhal Palace in Abu Dhabi witnessed by Sheikh Khalifa, then Crown Prince of Abu Dhabi.
December 6: Arab League formally admits the UAE. The first British Ambassador presents his credentials to Sheikh Zayed.
December 9: UAE joins the United Nations.
The Settlers
Director: Louis Theroux
Starring: Daniella Weiss, Ari Abramowitz
Rating: 5/5
TO ALL THE BOYS: ALWAYS AND FOREVER
Directed by: Michael Fimognari
Starring: Lana Condor and Noah Centineo
Two stars
West Indies v India - Third ODI
India 251-4 (50 overs)
Dhoni (78*), Rahane (72), Jadhav (40)
Cummins (2-56), Bishoo (1-38)
West Indies 158 (38.1 overs)
Mohammed (40), Powell (30), Hope (24)
Ashwin (3-28), Yadav (3-41), Pandya (2-32)
India won by 93 runs
