Breaking the shackles: the structural challenge of growth and transformation for Egypt's industrial sector

El-Haddad, Amirah
External Publications (2015)

in: Structural transformation and industrial policy: a comparative analysis of Egypt, Morocco, Tunisia and Turkey and case studies, European Investment Bank 2/3, 68-107


The paper concludes that industrial policy during the last decade has indeed brought about an improvement, but it is not a remarkable one and it is certainly not sufficient to address the country’s severe economic problems like widespread unemployment, underemployment and low productivity. Most importantly industrial growth has been captured; it has favored the cronies and public sector companies. Not just in the steel and cement industries but even in textiles and clothing where the largest exporters were very close to decision making (El-Haddad, 2013). But also, in other sectors allegations of bribes, embezzlement, and continued milking of the public sector are being made post revolution, such as the allocation of Export Development Fund resources discussed above. Public sector managers are accused of profiting from deals with private sector contractors and foreign suppliers. The question then is how can Egypt break the shackles imposed by years of mismanagement, poor governance and excessive regulation and the resulting structural constraints on growth and structural transformation as basis for sustained quality growth? The paper outlines in detail a mix of two policy pillars toward achieving that, namely active and neutral industrial policy.

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