Economic Crisis and the Politics of Reform in Egypt

Abstract

ECONOMICS AND DEVELOPMENT Ray Bush. Economic Crisis and the Politics of Reform in Egypt. Boulder, Colo.: Westview Press, 1999. xv + 184 pp. Tables. Figures. References. Index. $55.00. Cloth. Economic Crisis and the Politics of Reform in Egypt is simply dazzling. In this book, Ray Bush provides us with an innovative approach for looking at the economic crisis not only in Egypt, but in other developing countries as well. By placing the small fanner at the core of the economic reform process, Bush has turned the neoclassical orthodox paradigm on its head. The book's six chapters critically investigate the prevailing strategies for economic liberalization in terms of the relationships between the Egyptian state, its society, and its agricultural sector. In the first, Bush introduces his main thesis, that although economic and political reforms have been necessary in Egypt, the strategy promoted by the international financial institutions (IFIs) and the Government of Egypt (GoE) is inappropriate to the needs of the country. The author then discusses the origins of Egypt's current economic crisis by tracing its history from Gamal Abdel Nasser's government (1954-70) through Anwar el-Sadat's (1970-81) to that of Hosni Mubarak (1981-present). In chapter 3, Bush assays remedies for the political economy of the country, and in the following chapter evaluates the impact of the the GoE's reforms by looking at aggregate data such as productivity levels, exports, poverty levels, and income. Next he extends his general critique by analyzing new data from the Delta governorates. Finally, in the last chapter he provides evidence to support his contention that Egypt is at a turning point in its economic crisis. Bush describes the three pillars of IFI economic orthodoxy before debunking them. The first of these is that distortions in the Egyptian economy are promoted by the dominance of an unproductive, rent-seeking state. Thus liberalization and privatization (i.e., the state's retreat from economic activity) will permit the country to discover its true comparative advantage. second, rising overall levels of welfare will offset increased inequality associated with the economic reforms. Therefore, the state's retreat from economic activity will make it possible for a productive private market structure to emerge. Third, reforms will promote a more open and transparent policy framework. For the sake of brevity, I will discuss only what I perceive to be Bush's three main counterarguments. His first major finding is that policy-makers are preoccupied with monetary aggregates of the productive economy, thereby ignoring human resources, issues dealing with the reproductive economy, and indicators of health, nutrition, and skill development. …