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Egyptian State Capitalism in Crisis: Economic Policies and Political Interests, 1967–1971

  • Mark Cooper (a1)


Most analyses of Egypt in the 1970s, whether political or economic, have a central concern, the liberalization policies of the Sadat regime. The reason for this focus is clear; rather striking and deep-seated changes took place in Egypt under the heading of that policy. Most analyses, however, suffer two major drawbacks; they fail to integrate the political and the economic and they take an approach with a very short historical vision. In doing so, they run the risk of critical misinterpretations of the nature of the policy, the regime, and the changes in Egypt.



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1 For highly critical, yet perceptive analyses see, El Khouly, Loutfi, ‘Une Overture a Doublt Face,’ Politique Aujourd'hui (May–july, 1974);Shakir, T., The Issue of National Liberation and the Socialist Revolution in Egypt (Arabic) (Beirut, 197?). More sympathetic are Gray, Albert, ‘Egypt's Ten Year Economic Plan 1973–1982,’ Middle East Journal, 30 (Winter 1976), 3649;Waterbury, John, Egypt: Burdens of the Past, Options for the Future (American Universities Field Staff Reports), part. 3.

2 Dekmejian, Hrair, ‘Marx, Weber, and the Egyptian Revolution,’ Middle East Journal, 30 (Spring, 1976), 158173, had conceded the first point but still failed to see the second, ‘The political impact of Sadat's economic policies is an exciting area of research – and inquiry into the political economy of egypt?’ (p. 171).

3 Hansen, Bent and Nashishibi, K., Egypt: Foreign Trade Regimes and Economic Development (New York, 1976), chap. 5;Mabro, Robert and Radwan, Samir, The Industrialization of Egypt 1933–1973 (Oxford, 1976), chaps. 3, 4;El-Edel, D. M. R., ‘Economic Planning for Developing Countries: The Egyptian Experience,’ Institute of National Planning (hereafter, INP) memo. 1008, March 1972.

4 A comarative framework that can be used to locate Egypt can be found in Little, Ian, Scitovsky, Tibor, and Scott, Maurice, Industry and Trade in Some Developing Countries (Oxford, 1970); for data on Egypt see Aly, Muhammad Sultan Abu, ‘Experiences of the Harrod Domar Model as a Model of Economic Development with an Application to the Egyptian Experience’ (Arabic), L'Egypte Contemporaine, 352 (04 1973), 103117;Montasser, Essam, ‘Egypt's Pattern of Trade and Development: A Model of Import Substitution Growth,’ L'Egypte Contemporaine, 356 (04 1974), 141247.

5 Amin, Golal, ‘The Egyptian Economic Experience and the Rovolution,’ in Vatikiotis, P. J., Egypt Since the Revolution (London, 1968), pp. 4050;Aziz, Hassan Abdel, ‘The Problem of Industrial Development in Egypt,’ INP memo. 1051, Nov. 1973.

6 Mabro, Robert, The Egyptian Economy, 1952–1972 (Oxford, 1972), passim: O'Brien, P. K., The Revolution in Egypt's Economic System (London, 1966), p. 297.

7 Fadil, Mahmoud Abdel, Development, Income Distribution and Social Change in Rural Egypt (Cambridge, 1975), conclusion;Radwan, Samir, The Impact of Agrarian Reform on Rural Egypt (1952–1975) (Geneva, 1977), conclusion.

8 Mabro and Radwan, The Industrialization of Egypt, chap. 7;Fadil, M. Abdel, ‘Employment and Income Distribution in Egypt, 1952–1970,’ Development Studies Discussion Paper, No. 4, 01. 1975, University of East Anglia, East Anglia;Ayubi, Nazih,‘Bureaucratic Evolution and Political Development: Egypt 1952–1970,’ unpublished Ph.D. diss., St. Antony's College, Oxford, 1976.

9 O'Brien, The Revol ution in Egypt's Economic System, chap. 7. Mabro and Radwan, The Industrialization of Egypt, pp. 65–70.

10 Becker, Abraham S., Hansen, Bent, and Kerr, Malcolm, The Economics and Politics of the Middle East (Elainer, 1975), pp. 15;Sakr, Sakr Ahmed, ‘Development Alternatives in Egypt,’ INP memo. 998, Oct. 1971.

11 Malek, Anwar Abdel, Egypt: Military Society (New York, 1968), chap. I.

12 Abdullah, Ismael Sabry, The rganization of the Public Sector (Arabic) (Cairo, 1969), pp. 273294.

13 Marād, Mahmoud, Who Ruled Egypt? (Arabic) (Cairo 1975), passim;Riad, Hassan, L'Egypte Nasserienne (Paris, 1964), passim;Malek, Egypt; Military Society, chaps. I and 2.

14 The defeudalization of 1964–1966 was clearly such a case. It probably scared more people than it expropriated, precisely because of the contradictory political interests that cross-cut it.

15 This is the key aspect of the political economy that underlies the two-gap stagnation structure.

16 Dekmejian, Hrair, Egypt under Nasir (New York, 1971), chap. 12.

17 Needless to say, this deflation has various interpretations. Most agree that there was a severe deflation; e.g. Dekmejian, Egypt under Nasir, chap. 13;Hussein, Mahmoud, Class Conflict in Egypt: 1945–1970 (New York, 1973), chaps. 7 and 8;Soliman, Lotfallah, ‘Jusqu'au Sadat Peut-il Aller?’ Politique Aujourd'hui (May–July 1974);Itey, Roland, ‘R.A.U. Graves Tensiones Internes,’ Revue Francaise d'Etudes Politiques Africaines (Dec. 1968);Jawad, Kamal, ‘Nasser et Ses Enemies,’ Jeune Afrique (14 Dec. 1968).

18 Hansen and Nashishibi, Egypt, chapt. 5.

19 See, e.g., ‘Economic Liberalization,’ Al-Tali'a, Sept., 1968;Mursi, Faud, This Is the Economic Liberalization (Cairo, 1976).

20 Mabro and Radwan, The Industrialization of Egypt, p. 40, use this adjective.

21 The version used in this work is found in Documents of Abdul Nasser, January 1967–December 1968 (Arabic), Center for Political and Strategic Studies, Al-Ahram (Cairo, n.d.).

22 Ibid., p. 377.

23 Ibid., pp. 377–378.

24 Ibid., p. 379.

25 Hussein, Class Conflict, chap. 8.

26 The point of class bias in the revolution has become universally accepted. See the review essay by Binder, Leonard, In a Moment of Enthusiasm (Chicago, 1978), chap. I.

27 Fadil, Development, Income Distribution and Social Change, conclusion; Radwan, The Impact of Agrarian Reform, conclusion.

28 Dekmejian, Egypt under Nasir, chap. I.

29 Soliman, ‘Jusqu'au Sadat.’

30 Al-Ahram, Aug. 1968.

31 Jawad, ‘Nasser et Ses Enemies;’ Itey, ‘R.A.U. Graves Tensiones.’

32 Hegazi and Oteify are the examples par excellence of those who remained in the core the longest but utilimately were ridden out.

33 Al-Ahram, June 1968.

34 Minister of Economics and External Trade, Hassan Abbas Zaki, Arab Political Encylopedia, Documents and Notes (July–Dec. 1968), p. 100 (hereafter APE).

35 Ibid., p. 14.

36 Al-Ahram, Sept. 1968; Al-Goumhouriya, Aug. 1968.

37 APE, July–Dec. 1968, pp. 166–167.

38 Ibid., pp. 173–174.

39 Al-Ahram, Al-Goumhouriya, Aug. 1968.

40 APE, July–Dec. 1968, p. 54.

41 Ibid., p. 59.

42 There are two sets of records, one temporary, one permanent. References here are to the temporary records: Official Gazette, Legislative Section, Minutes of the National Assembly 12th session, 15 Feb. 1971 (Arabic) (hereafter, Minutes).

43 Ibid., p. 5.

44 Ibid., p. 6.

45 Ibid., p. 7.

46 See Sidqi, Aziz, Minister of Economics, 5 Feb. 1969, APE, Jan.–June 1969, p. 14.

47 Sidqi, Aziz, Conference of Administrative Leadership, Session on Administrative Problems in Industry, 27 09. 1968, p. 133 (Arabic).

48 Ibid., Session on Financial and Economic Reform, Hilmy Al A'yid, p. 37.

49 Sabri, Ali, Speech to the National Assembly (4 04 1964) (Cairo, n.d.).

50 Sidqi, Conference, p. 121.

51 Hegazi, APE, Jan.–June 1969, pp. 122–123.

52 Sidqi, Conference, p. 122.

53 APE, July–Dec., 1968, p. 205.

54 APE, Jan.–June 1969; Al-Ahram, Aug. 1968, May–June 1969, March 1970.

55 Minutes, 13, 14 July, 1969.

56 Al-Ahram, Aug. 1968.

57 APE, Jan.–June, 1968, p. 98.

58 Ibid., p. 101.

59 Presidential Decree 46/1969, modifying Presidential Decree 2193/1967, which was already an increase: see APE, Minister of Agriculture, 6 Feb. 1969.

60 Springborg, R., ‘The Ties That Bind: Political Association and Policy Making in Egypt,’ unpublished Ph.D. diss., Stanford University, 1974, has a detailed discussion of the machinations around this law. He fails to see any systematic relationship between the law and the political economy. What Sprinborg takes as the nature of Egyptian politics and analyzes in one or two cases is placed within the larger framework of the political economy in this analysis.

61 APE, July–Dec. 1968, p. 51.

62 Ibid., p. 48.

63 See Springborg, ‘The Ties That Bind,’ and Adbullah, The Organization of the Public Sector, who take diametrically opposed views. Also, Hifagi, Shams al-Diene, Agricultural Cooperation, Thought and Law (Cairo, 1973) (Arabic), Hamid, Fauzi Abdel, The Problem of Agriculture in Developing Nations and the Agrarian Reform Experiment in Egypt (Cairo, 1973) (Arabic);Basyuni, Sayid, Agricultural Possession: Between Fact and Law (3 vols.; Cairo, 1975, 1976) (Arabic).

64 28 Sept. 1970–1914 May 1971.

65 Official Gazette, 2 Feb. 1970.

66 Aziz, Hassan Abdul, ‘Structural Change in Egyptian Industry,’ INP memo. 1052, Nov. 1973.

67 This was the ideology that would later drive the foreign investment laws, see People's Assembly, Legislation Committee, The Law of Arab and Foreign Investment and Free Zones (Cairo, n.d.) (Arabic).

68 Hansen and Nashishibi, Egypt, chaps. 6 and 7.

69 Mursi, Fuad, This Is the Economic Liberalization, pp. 268–269.

70 Mabro and Radwan, The Industrialization of Egypt, give an exhaustive discussion of Egyptian industrial statistics in their statistical appendix.

71 Fadil, Employment, has discussed this in the Egyptian case. See also, Hansen, Bent, ‘Employment and Wages in Rural Egypt,’ American Economic Review, 59 (Fall, 1969), 298314:Mabro, Robert, ‘Industrial Growth, Agricultural Unemployment and the Lewis Model: The Egyptian Case, 1937–1965,’ Journal of Development Studies, 3 (07, 1967), 322352;Hanafi, Mohamed Nazem, ‘Surplus Labor and the Problem of Disguised Unemployment in the Egyptian Agriculture,’ INP memo., 1054, Dec. 1973

Egyptian State Capitalism in Crisis: Economic Policies and Political Interests, 1967–1971

  • Mark Cooper (a1)


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