Basics of the Egyptian Economy: the 1952 Movement
All nations go through fundamental moments that help materialize their futures; these moments are important in realizing the political, economic, and social questions and answers needed in order to work towards a better wellbeing for a nation’s people. Egypt has passed through many defining moments in its modern history, including the Free Officers movement, the crisis of the ‘67 war, post 6th of October war, and post 25th of January revolution. The 1952 Free Officers revolution has shown a particularly important issue in Egyptian approaches to political movements. Let’s begin the discussion with this movement.
Answering the economic aspects of political movements is an important part of working towards social change. The mentioned political movements weren’t as concerned with answering the questions for the economic situation, leading to severe problems that continued even after revolutions and movements had evolved. Egypt’s economic identity and pathway have changed relative to the political perspective of the ruler. This can be seen, for example, after the 1952 military movement occurred rather than a social contract or agreement. When, afterwards, the socialist (اشتراكي) approach was implemented during Nasser’s period in contrast to the open-door policy, ‘infitah’, which was enhanced during Sadat’s rule, the state’s new economy still had not figured out its structure, not knowing whether to focus on an extreme free market and neoliberal pathway, a radical leftist approach, or a mixed economy*. Since the governing of the era was more interested in political gains and conflicts (for many good reasons), Egypt in its modern history was not reaching clear answers to the questions of productivity, inclusivity, and development.
Because of the vagueness in the approach of the questions of productivity, inclusivity, and development, the answers to these questions were weak due to the weakness of the sustainable planning methods and the implementation process of those plans. Although the real GDP growth was more than the population growth from 1965 till 2020 at 5.01% growth on average compared with population growth 2.23% on average according to WorldBank (2020),Egypt’s economic growth has been more due to increases in labor and, in particular, capital compared to small increases in total productivity across the last 50 years (Ikram, 2018). Besides that, Egypt approached a 0.70 Human Development index in 2018 based on the Human Development Report 2019, but such quantitative data does not present the quality of production in terms of educationand health. Regarding inclusivity, based on UNPD (2019), the GINI Index (which helps measure inequality) approached to be 31.5% by 2017 and the poverty gap according to CAPMS reached to be 32.5%.
These data can point us to the importance of growing GDP in a productive manner, and specifically the importance of more qualitative sustainable development rather only increase in the index numbers of education, life expectancy, and income. In addition, decrease of inequality and poverty gaps that wasn’t taken into consideration by the political movement post the revolution, none of them realized an economic vision and plan to productively work on improving those figures and improve the social life of households.
The 1952 Free Officers revolution has shown a particularly important issue in Egyptian approaches to political movements (relevant even until the 25th of January revolution): the importance, or lack thereof, of specifying economic questions in searching for solutions – specifically, solutions that include a larger focus on inclusivity and political mobility, productivity, and development.
Notes for further understanding:
* There are different types of economies in economic theory, although most lie on a spectrum rather than being strictly one type or the other. On the extreme right of this imaginary spectrum, the government controls everything in the economy; it controls who gets to buy and sell and what they get to buy and sell. Usually, this part of the spectrum is the communist approach to economics. In it, the government also provides welfare, education, and other social services in return – it is particularly used in arguments against massive class gaps, although it does provide the government with an incentive to be corrupt. An important figure under this approach is Karl Marx.
On the other side of this imaginary spectrum lies the extreme free market and neoliberal pathway. Because neoliberalism focuses on political, social, and economic aspects, let’s focus on the extreme free market for this definition. In this theoretical market, the government almost ceases to exist. People decide what to buy, what to sell, and what prices they may choose to do so. This approach, usually referred to in discussions of a capitalistic society, is said to increase income and wealth inequality, as well as support other kinds of possible human rights abuses. An important thinker for this approach is Adam Smith.
Most economies are mixed market economies; they neither abide to solely communist principles nor capitalistic principles.
Citations and Sources for Further Reading
Ikram, K. (2018). The Political Economy of Reforms in Egypt: Issues and Policymaking Since 1952. New York; Cairo; The American University in Cairo Press.
World Bank (2020), GDP growth (annual %) - Egypt, Arab Rep, retrieved from https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locations=EG
Wu, Lawrence, and Michelle Lanz. “How The CIA Overthrew Iran's Democracy In 4 Days.” NPR, NPR, 7 Feb. 2019, www.npr.org/2019/01/31/690363402/how-the-cia-overthrew-irans-democracy-in-four-days.
UNPD (2019), Inequalities in Human Development in the 21st Century,retrieved from http://hdr.undp.org/sites/all/themes/hdr_theme/country-notes/EGY.pdf
