Carnegie Endowment for International Peace
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Financial crises are threatening the stability of Egypt, Tunisia, and Lebanon. Despite a rare alignment of elements conducive to change, reforming the economy will still be politically challenging.
Egypt’s and Tunisia’s dependency on outside funding has led them to become peripheral in the global economy and in Middle Eastern and North African geopolitics.
Egypt’s and Turkey’s economic ties have survived the two countries’ political rift because a cutoff in relations would have harmed too many people on both sides.
As Egypt and Ethiopia negotiate the details of the Grand Ethiopian Renaissance Dam, tensions are on the rise. Sudan, which has vested interest in the dam, too, could be an essential third party to smooth over the disputes.
Pouring money into health infrastructure will have little effect if qualified doctors have few incentives to stay.
Armed forces in power and in business will be hard-pressed to implement the complex and painful economic reforms needed to stimulate growth.
The Egyptian military’s involvement in the economy has come at a high cost, contributing to underperformance in development.
President Abdel Fattah el-Sisi has reinvigorated state capitalism in Egypt through military-led real estate development, industrial hubs, extractive activities, private sector encroachment, and using private investment to recapitalize the public sector.
The successful completion of Egypt’s 2016 IMF program is superficial, hiding poor economic growth relative to emerging market peers and an economy burdened by a military-led public sector.
The Egyptian military’s capture of state resources under President Abdel Fattah el-Sisi depends on a poorly run state and the visible corruption of the former regime, auguring a new ruling class of military officers.