The rescue packages from the World Bank and the International Monetary Fund (IMF) brought burdensome conditions for the Egyptians. They pushed for tougher austerity policies such as floating currency, reducing subsidies in general and energy subsidies in particular, totally lifting pesticides and fertilizers, accelerating privatization pace as well as the liberalization of foreign trade.
This is how the reform measures took place in the early 1990s, and if the reader thinks at first that we are talking about the latest reform measures, there is nothing wrong with it, as it is the same measures that lenders bring every time to “reform” the economy.
The reforms implemented by Egypt for the World Bank and IMF rescue package included the application of VAT at a rate of 14%, with fuel prices rising and the currency floating that led to the collapse of the pound and the unleashing of inflation, leading to a cumulative increase in consumer prices of 54% since December 2016.
These price increases were not accompanied by a rise in wages, which pushed more Egyptians to the bottom of the poverty line, while a large proportion of those who were already below the poverty line were pushed under the extreme poverty line. What kind of reforms are these people who are impoverishing people day after day?
This paper discusses the reform measures being implemented, which are related to rescue loans provided by international institutions that promise us with good life if we comply. The paper focuses on the impact of similar reform measures in the 1990s on the Egyptian economy, how they contributed to the creation of the crisis today, and led to the removal of the state from the economy, paving the way for a free market economy instead of addressing the structural imbalance of the Egyptian economy.
These measures not only failed to address this imbalance, but also contributed to its deepening and directly helped to create today’s crisis.
Finally, we are trying to answer the urgent question: why do we continue to implement reform measures that we know well they do not work?
YOU CAN FIND IT HERE : Economic Reform policies