The Rafik Hariri Center for the Middle East hosted a discussion with Egyptian economist Magda Kandil, US government officials, and experts from international financial institutions and think tanks on November 10.
Participants discussed the relationship between Egypt’s political transition and economic problems, as well as well as the prospects for international assistance and trade partnerships. A prevailing sense of insecurity and lack of certainty about the political transition and legal environment are discouraging Egyptian as well as foreign investors. A populist backlash to the neoliberal reforms implemented under Mubarak’s rule has tarnished the image of the private sector and dampened entrepreneurial activity, as the business community retreats in the face of deprivatization lawsuits and anti-corruption probes. Although most Egyptians accept the inevitability of fuel subsidy reform–essential to restoring fiscal health–it is unclear when the government will take on this problem in a serious fashion.
Participants agreed that foreign assistance and debt forgiveness can help resolve Egypt’s immediate financing needs, but the key to long-term growth and prosperity lies in mutually beneficially trade partnerships with Europe and the United States. Participants discussed how Egyptian government plans, private sector efforts, and international partners might focus efforts on generating trade and credit opportunities for small and medium enterprises (which create more than three-quarters of jobs in Egypt) in order to maximize employment and training opportunities.
Dr. Magda Kandil is the executive director of the Egyptian Center for Economic Studies. Previously, she worked with the International Monetary Fund where she held the positions of advisor to the executive director, senior economist, and visiting scholar at the IMF Institute’s Research Department. Dr. Kandil has published extensively on debt accumulation, public spending, price flexibility, exchange rate fluctuations, and Egypt’s macroeconomic policies. She received her PhD in economics from Washington State University.