Can Sisi’s Egypt achieve sustained economic growth?
108 , 2018-03 , 日本貿易振興機構アジア経済研究所
Although Egypt has seen improved political stability and public order under the Sisi administration, the economy remains stagnant. The average economic growth rate during the first three years of Sisi’s presidency was 4.5 percent. More recently, Egyptians have suffered the highest inflation rates in decades due to the devaluation of the currency in November 2016. Will the bold economic reforms of 2016 lead to sustained economic growth for Egypt? This article argues the probability of reduced long-term economic growth prospects under the Sisi regime’s governance and economic policies.The Sisi administration has pursued a policy of social stability by restoring authoritarianism. The government has restricted citizens’ freedom of assembly, association, and expression through newly legislated undemocratic laws. As for the economic policy, its three main pillars include stabilizing the macro-economy, upgrading the social security program, and implementing ambitious infrastructure projects. While these policies are based on the standard market economy model, the military is now playing a critical role in economic activity more than ever before. That is, the Sisi regime has tried to control economic as well as political activities in an autocratic manner. Excessive military intervention in economic activity deters fair market competition, and, hence, innovation. As a result, Egypt cannot be expected to achieve sustained economic growth under the Sisi regime.