Roundtable discussion on institutional reform.. What does it mean and can it get Egypt out of its economic crisis?

On February 15, 2024, ECFA hosted Dr. Abla Abdel Latif, Executive Director and Director of Research of the Egyptian Center for Economic Studies. During the meeting, she spoke about “Institutional Reform: What does it mean, and can it get Egypt out of the economic crisis?” This meeting came with the participation of Ambassador Dr. Ezzat Saad, ECFA Director, and businessman Mohamed Kassem, with the presence of a number of ECFA members.

In addition, she discussed the causes of the current crisis and the role of internal factors in the economic crisis, as the internal factors consist in the reliance in economic policy on fiscal and monetary policy, and then reliance on raising the interest rate and foreign exchange liberalization. When the situation reaches its peak of complexity, floatation is resorted to, for example, which is a temporary solution and does not solve the roots of the problem. In this regard, she nooted that Egypt has suffered from the same problem throughout its history in different ways, and the problem is solved with temporary solution that does not address the roots of the crisis.

In this context, she pointed out the importance of comprehensive institutional reform in order to advance the Egyptian state and not solely focus on the problems of bureaucracy, laws, and corruption, as this is one of the misconceptions of institutional reform.

She also tackled a number of other concepts that are addressed from a narrow-minded perspective and not a comprehensive concept. These concepts include deepening and localizing industry, digital transformation, key performance indicators, foreign exchange liberalization, focusing on infrastructure and not development, directing all resources to one initiative such as Hayah Karima, assigning the problem to population increase, and multiple entities, and the concentration of agricultural land on a small area of ​​Egypt’s area, at a rate not exceeding 6%.

Ultimately, she concluded that getting out of the crisis requires a contingency plan that includes compliance with the IMF program and focusing on comprehensive institutional reform and governance. She also presented a proposal that would contribute to institutional reform and getting out of the crisis, while indicating the importance of separation of powers and strengthening the role of oversight, the balance between limiting imports and not harming exports, focusing on excellence in industry and local production at the lowest cost, and the presence of a political will to gradually change.