A New Direction for Egypt’s Economy: Five Influential Economic Thinkers Shaping the Debate


Throughout Egypt’s history, economic thinking has always had a profound influence on society and on the organization of production and distribution. The post-Mubarak era is no exception.

President Gamal Abdel Nasser’s endeavor to establish Egypt as the leader of a unified Arab world and his pioneering of the economic model that came to be known as Arab Socialism have granted the Egyptians unprecedented access to housing, education, health services, nourishment, and other wide social welfare programs. During his era, the combination of a dominating public sector and a land confiscation program has resulted in a transfer of the country’s assets either to the State or to millions of small land owners. While Nasser’s social policies (in particular through education and jobs in the public sector) have flattened the social curve and expanded the middle class in Egypt, the political and economic policies of his successor, Anwar Sadat, have shown a significant departure from the Nasser era. His “opening-the-door” policy (or Infitah) has aimed to relax government controls over the economy by encouraging both domestic and foreign investment in the private sector. However, many see Sadat’s economic policies as having created a wealthy upper class more than having introduced a real policy of free markets.

The thirty years of Mubarak’s reign are less easy to classify under any of his predecessors’ distinct economic ideologies. Although he undertook an ambitious domestic economic reform program in the early 1990s to reduce the size of the public sector and expand the role of the private sector, the support to his reform program dropped with the expansion of crony capitalism and the wide belief that the country was becoming a private property for the benefit of his own family and a small group of businessmen who seized public assets and acquired monopoly positions in strategic commodity markets such as iron, steel and cement. While the State remains heavily present in the country, the hybrid economic and social system has resulted in public services quality having dramatically deteriorated or taken beyond the reach of vast segments of the population. Poverty, unemployment and inequality of opportunities have disfigured the Egyptian society.

Hence, in the wake of a revolution against Mubarak’s social and economic system, Egyptians find themselves puzzled when it comes to the economic system they want to see adopted and implemented in the new Egypt. Similar to what is happening on the political front, Egyptians knew what they don’t want from their rulers but have no idea on what economic direction can make their aspirations come true.

Amid all this confusion, economists, academics and economic thinkers were expected to finally have a role in analyzing, debating and presenting the different alternatives to a population that is about to adopt a new constitution. But in a country where intellectuals and thinkers have too often been crowded out of policy debates, the vacuum is more being filled by business man, official executives and economic journalists who are now playing the main role in shaping the public opinion.

Economics professor Gouda Abdel Khalek is one of the prominent economists who was a well-known figure of the academic world but has taken off this hat when he was appointed after the revolution as Minister of Social Solidarity and Justice. A member of the left-leaning Tagammu’ Party, he remains faithful to his ideas that Egyptians have the right to continue benefiting from the State’s welfare programs and to demand more. Of course, being now part of the interim government, executing his economic prescriptions turns out to be much more challenging.

Galal Amin is another scholar and economist who is widely respected by Egyptians. In addition to teaching, Amin regularly writes accessibly for a general audience. His books (see “Whatever Happened to the Egyptians?”) and opinion pieces on the development of Egyptian society in recent history have enforced his image as a social writer and a critic of the Western influence on the country. When talking about the economic path that Egypt should adopt in the aftermath of the revolution, he clearly recommends that economic stability should be achieved before tackling inequality and social justice. In his views, it is unwise to try improving social justice when the Egyptian economy is experiencing turbulence. Opposed to the establishment of minimum and maximum wages, he also warns that progressive taxation will drive investors away.

But the public opinion on the country’s economic direction is also shaped by the discourse of some businessmen, especially those who have an appeal among Islamists. Hassan Malek is one of those. A prominent businessman and a top member of the Muslim Brotherhood, he owns many companies in fields as various as computer software, ready-made clothes, industrial raw materials and electronics. Prosecuted and imprisoned by the Mubarak regime which accused him of funding the then officially banned Brotherhood’s activities, he represents one of the few people within the sector of trade and industry business owners who were not close to the Egyptian regime. A business partner of Khairat Al-Shater (who was the Freedom and Justice Party’s presidential candidate before being permanently disqualified by the electoral commission because of his prior criminal conviction), the millionaire wants to promote an economic model that resembles that of Turkey, where an Islamic government has achieved a remarkable economic boom. A Muslim Brotherhood-led economy could, in the view of the pro-business leader, open up opportunities and give rise to an entirely new business class.

Maybe the most influential role in Egypt’s post-revolutionary era is played by the media, which has obviously become an important source of economic information and analysis. Hence, when it comes to socio-economic policies, journalists and economic writers are playing a substantial role in shaping the public opinion. For Wael Gamal, whose column in al-Shorouk’s newspaper is closely followed in Egypt, social justice is a fundamental prerequisite for change in Egypt and should be achieved through the provision of equal opportunities in education, healthcare, and work. He calls for introducing fundamental changes to the economic system by making social justice, rather than growth, the policy makers’ first priority.

Likewise, Ahmed Sayed al-Naggar, the Chief Economist for the Al Ahram Center for Political and Strategic Studies, underlines the necessity of reducing the gap between the wealthiest and poorest Egyptians by introducing both a minimum and a maximum wage and recommends the public deficit be reduced through restructuring the budget rather than cutting public spending and introducing a progressive tax system.

The problem with Mubarak’s economic system was not only that many Egyptians were getting poorer within a growing economy, but also that his autocratic rule has crippled society’s capacity to undertake a healthy, informed and much-needed economic debate. In order to rehabilitate the economy and develop a new vision for national economic development, Egyptains will need to engage in a sustained dialogue based on sound analysis of the policy alternatives. 


Hoda Youssef is a postdoctoral research associate at the Woodrow Wilson School of Princeton University. She holds a Ph.D. in Economics from Sciences Po Paris school. Her research work focuses on monetary and fiscal policy, and on the political economy of the MENA region, with a focus on Egypt.

Photo Credit: al-Ahram


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