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Egypt’s performance
At the end of 2007, well before the onset of the global financial crisis, the IMF was lauding Egypt’s upsurge in economic growth as “an emerging success story” (IMF 2007, p. 32) and was quick to attribute this success to economic reforms, started in 2004, which encouraged “the private sector to become the In fact, net FDI into Egypt originating in the Arab region soared from only US$ 0.5 billion in 2005/06 to US$ 3.3 billion in 2006/07, accounting for about 56 per cent of the total increase. At the end of 2007, well before the onset of the global financial crisis, the IMF was lauding Egypt’s upsurge in economic growth as “an emerging success story” (IMF 2007, p. 32) and was quick to attribute this success to economic reforms, started in 2004, which encouraged “the private sector to become the
In fact, net FDI into Egypt originating in the Arab region soared from only US$ 0.5 billion in 2005/06 to US$ 3.3 billion in 2006/07, accounting for about 56 per cent of the total increase. Egypt’s capital account was also enjoying a boom. Between 2005/06 and
2006/07, FDI inflows into Egypt leapt from US$ 6.1 billion to US$ 11.1 billion,or by 82 per cent. As a result, Egypt’s FDI/GDP ratio shot up to 9.3 per cent in 2006/07 (see Figure). So, on the African continent, Egypt’s inward FDI trailed only South Africa’s.
So, much of Egypt’s IMF-scripted ‘success story’ can be attributed to the boom in the global oil market and the good fortunes of its neighbouring GCC countries. Unfortunately, Egypt will remain heavily reliant on such FDI, along with remittances and tourism receipts. Despite being an oil exporter, the country runs Capital inflows and the rising cost of imports, such as food, have led in recent
years to soaring inflation. In response, there has been the biggest wave of worker Behind the ‘Success Story’ Capital inflows and the rising cost of imports, such as food, have led in recent years to soaring inflation. In response, there has been the biggest wave of worker strikes since the 1950s, protesting rising food costs, low real wages and lay offs. These trends belie the IMF’s rosy image of Egypt as an emerging economic ‘success story’, for its success has been superficial, and likely to be short-lived. Source: MOED 2007
2002/03 2003/04 2004/05 2005/06 2006/07. reached (see background paper, Achcar 2009).Moreover, although the official unemployment rate had dropped to 9.1 per. Both FDI and remittances have undoubtedly resulted from the boom in revenues. enjoyed by the richest Arab oil exporting countries, namely, those in the Gulf Cooperation Council (GCC). Their oil export revenues escalated from US$ 191.1 billion in 2004 to US$381.9 billion in 2007—by almost 100 per cent.
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