Egypt’s Economic History
Post independence, Egypt followed both nationalization and import substitution schemes as
guided by foreign development agencies. It focused on rapid industrialization until the mid
1970s. During this period, the War of Attrition (1967-1970) severely weakened the Egyptian
economy. From 1974 onwards, President Sadat followed more neoliberal policies that
encouraged trade liberalization, increased privatization, and greater foreign investment. These
policies coincided with an influx of multinational companies and an increase in economic
inequality. The 1980s were marked by an external debt crisis that was then forgiven by the US
and other donors between 1990 and 1992 (marked in the graph). In the 1990s international
financial institutions such as the World Bank and the IMF, imposed strict conditions that
promoted greater privatization and lowered public expenditures. The main purpose of these
economic reforms was to service Egypt’s sovereign debt crisis. In 2007, the global financial
crisis severely impacted the Egyptian economy as high imported food and grain prices meant that
the government needed to step in and provide immediate assistance (State Information Service).
The growth in GDP and GNI during the past three decades has not led to an increase in standards
of living or to a decrease in poverty rates. Therefore, as can be seen, over the years growth has
not led to development.
History of Foreign Aid to Egypt
Historically, the foreign aid that Egypt has received has been of two types: Official Development
Assistance (ODA) and military aid. This aid has been disbursed through bilateral and multilateral
means. Egypt’s biggest bilateral donors from 1980 onwards have been the United States, Japan,
