Stabilization and Adjustment in Egypt

Stabilization and Adjustment in Egypt

Reform or De-Industrialization

Gouda Abdel-Khalek

This book studies the impact of Egypt’s Economic Reform and Structural Adjustment Programme (ERSAP), the effects of which have been of great interest to the international community. Organizations such as the World Bank and the IMF uphold the programme as a success story and example for other countries to follow. ERSAP also has its critics, however, who resent its tendency to downsize government and fear possible negative effects on growth and development. The author discusses these concerns along with those regarding the possible negative social effects of ERSAP.


Gouda Abdel-Khalek

Subjects: development studies, development economics, economics and finance, development economics


ANNEX I Table AI.1 Development of the exchange rate system and exchange rates 1945–97 LE/US$ 0.242 0.348 0.435 0.391 Remarks Egyptian pound pegged to pound sterling Following devaluation of pound sterling by 30.5 per cent in 1949 1962 devaluation according to stabilization programme Following the second devaluation of the American dollar by 10 per cent in 1972. The pound followed the dollar in the first devaluation by 7 per cent in the same year Establishment of the parallel market rate Devaluation and unification of exchange rate Return to multiple rates: (a) Central Bank Pool* = LE 0.70/US$; fixed (b) Commercial Banks’ Pool** = LE 0.80– 0.84/US$; adjustable (c) Accounting exchange rate for clearing accounts and payments agreements with non-IMF members fixed at 0.391 (d) Transactions outside authorized banks (black market) Devaluation and unification of the exchange rate; pegging to the American dollar Year 1945–49 1949 1962 1972 1973 1979 1981 0.391 0.700 1991–97 Notes: * Central Bank Pool: Receipts: Exports of cotton, rice, petroleum plus Suez Canal and Sumed dues. Payments: Imports of wheat, wheat flour, sugar, tea, edible oil, fertilizers, including shipping and other related charges, plus public debt service and government expenditure abroad. ** Commercial Bank Pool: All items of receipts and payments other than those under Central Bank Pool. 167 ANNEX II Table AII.1 Authorized Banks’ Pool Parallel marketa Declaredb Premium Flexibleb Black market 0.588 0.637 0.667 0.700 0.700 0.700 0.700 0.832 0.832 0.832 0.832 0.832 0.832 1.288d 1.329 1.362 1.764e 0.730 0.741 0.769 0.746 0.746...

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