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ÉLITE FRANÇAISE
NUMÉRO 11, NOVEMBRE 2020

which used to ruin the state budget have The flotation decision led to an incontrollable
been lifted. In order to reduce the impact of rise in inflation, as we have already pointed
these reforms on low-income classes and to out, and the austerity monetary policy that
gain popular support for the program, 1% of sought to reduce inflation had a severe side

the GDP was allocated in the form of effect. In fact, raising the interest rate, forced
subsidies for food commodities, cash investors to save their capital in banks instead
transfers to the elderly, low-income, and free of taking the high risk of taking credits to start
school meals. In addition, social protection their businesses, which reduced the private-

programs, such as "solidarity and dignity", sector growth. Furthermore, this decision
have included about 10 million low-income mainly affected the non-rich classes whose
individuals. This system is more efficient income is limited to salaries in the Egyptian
than indirect fuel subsidies.Furthermore, the pound, while the rich classes that possess real

program gave clear importance to the estate, dollars, and gold, have seen the value of
institutional role, providing for the writing of their wealth doubled after this decision. Which
operational performance reports for rose inequality in a country where 1% of the
economic authorities, a roadmap for pension population own 28% of the wealth. Finally,

reforms, and finally the submission of a social protection programs are undoubtedly
budget statement for the House of insuffisante to support 32 million people below
Representatives with each general budget. the poverty line. So, while these decisions are
These decisions are expected to raise the level important, they have been harsh on the poor

of governance in Egypt, which is an and middle classes. Economically, the state ’s
important step to attract investors. Greater aim was to encourage the private sector to be
access to finance to SMEs, and new the motor of the economy. The Government
insolvency and bankruptcy procedures will has therefore reduced the number of public

also result in a better business climate. sector workers to stimulate the market. But
Finally, the program was concerned with the decline in the state ’s role coincided with
strengthening the role of women, and the the absence of the private sector, creating an
government worked to improve the safety of economic vacuum. Although economic

public transport. decisions by the state are important, they have
As a direct result, macroeconomic indicators not been sufficient to restore investors' full
have already improved after the program confidence to start businesses and create the
was implemented, with public debt down to necessary jobs. So reducing the size of the

85% of GDP, owing to the budget 2%-of- public sector led to only reducing government
GDP surplus. The foreign exchange reserve spending and increased unemployment.
reached $44 billion in 2019, up from just 1.7 According to the World Bank, the procedures
billion in 2016. The program has put Egypt for doing business in Egypt require 12 days,

on the path of growth, as confidence in the while it takes 9 days only in Afghanistan to
macroeconomic performance of Egypt rose start your business, which reflects the need to
after restructuring it and restoring its improve governance in Egypt, and explaining
stability. But the impact of these policies has part of investors' lack of confidence for

been particularly heavy on the poorest. entering the Egyptian market.

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