Page 16 - Issue-65
P. 16
Vol 1 - issue 65 ELITE
and its over dependence on hot money military footprint in the economy is a
to provide foreign currency for matter of political economy.
external debt payments. Given its The idea of selling military started to
huge needs in the short term, the be discussed within the government in
government still relies on hot money, 2016 and made public in 2018. The
which gets in and out in a glimpse, President hinted to facing resistance
even in a world of high risk and from the military, saying that “listing
uncertainty. (check the chart) in the stock exchange has many
The two agreements with IMF in 2016 requirements that I don’t want to talk
and 2022 mentioned increasing FDI about.” The resignation of Ayman
and decreasing the current account Soliman, the first chief executive
deficit, which barely moved since officer of the Sovereign Fund of Egypt,
2016, excluding the first quarter in which was given the supervision over
2024 due to Ras-Al Hekma deal effect. the sale of military-owned companies
One of the main reasons that FDI and active in civilian markets in 2020,
the current account (through its effect signals that the military has won the
on exports) are stalling is the unfair battle.
competition with military enterprises, Given the circumstances, Egypt could
which discourages both domestic and start working on other reasons that
foreign investments. In 2022, the IMF cripples FDI and the current account.
mentioned clearly decreasing the role The huge fluctuations in exchange rate
of military in the economy as part of and the huge gap between the official
the agreement, yet not a single and unofficial rates discouraged
military enterprise has been sold, nor investment and decreased
has the military control over the remittances. A more predictable and
economy weakened. unified exchange rate would help
The reason why no actual measures investors evaluate their investments
are taken against the increasing and predict their profits and
Sept. 2024, p.16
