IDEAS home Printed from https://ideas.repec.org/p/ags/widerw/295392.html
   My bibliography  Save this paper

Country Study 9

Author

Listed:
  • Abdel-Khalek, Gouda

Abstract

Since joining the International Monetary Fund in 1945 as an original founding member, Egypt has signed four stabilization agreements with the Fund. These agreements were: a credit facility in May, 1962, which collapsed fairly rapidly; a stand-by arrangement in April 1977; an extended fund facility in July 1978; and the new stabilization package agreed in May, 1987, which is supported by a stand-by credit of SDR 250 million. Some of the most important items in the new programme are the following:A gradual devaluation-cum-unification of the exchange-rate structure, with the establishment of an official free market in foreign exchange; an increase in energy prices; an increase in purchase prices of agricultural commodities; action to reduce the budget deficit to 13 per cent of GDP; an increase in interest rates; and (undisclosed) limits on monetary expansion.This package must be viewed against a dismal background of a stagnant economy, rapidly-rising inflation (estimated unofficially at 30 per cent in mid-1987) and a budget deficit which the author of the following paper, Dr Abdel-Khalek, reports to have been 27 per cent of GDP in 1985-86 - and possibly even higher in 1986-87.The real purpose of this programme, which the IMF was persuaded to moderate considerably from its original demands, was to clear the way for a Paris Club rescheduling. Subsequently, about one-quarter of Egypt's medium and long-term debt of about USD40 billion has been rescheduled over ten years, including a five-year grace period.In the author's judgment, the new package may turn out to be self-defeating, and could well founder through failure to control the budget deficit. This failure would leave behind a legacy of a greatly depreciated currency and excessive interest rates. The author concludes that Egypt 'may soon find itself facing a crisis situation even more difficult than the one which led to the present package'.

Suggested Citation

  • Abdel-Khalek, Gouda, "undated". "Country Study 9," WIDER Working Papers 295392, United Nations University, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:ags:widerw:295392
    DOI: 10.22004/ag.econ.295392
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/295392/files/SAPP9.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.295392?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. J. J. Polak, 1957. "Monetary Analysis of Income Formation and Payments Problems," IMF Staff Papers, Palgrave Macmillan, vol. 6(1), pages 1-50, November.
    2. Bienen, Henry S. & Gersovitz, Mark, 1985. "Economic stabilization, conditionality, and political stability," International Organization, Cambridge University Press, vol. 39(4), pages 729-754, October.
    3. Alderman, Harold & von Braun, Joachim, 1984. "The effects of the Egyptian food ration and subsidy system on income distribution and consumption:," Research reports 45, International Food Policy Research Institute (IFPRI).
    4. Lance Taylor, 1986. "Stabilization and Growth in Developing Countries: How Sensible People Stand," Working papers 415, Massachusetts Institute of Technology (MIT), Department of Economics.
    5. Ground, Richard Lynn, 1984. "Orthodox adjustment programmes in Latin America: a critical look at the policies of the International Monetary Fund," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), August.
    6. Katseli, Louka T, 1983. "Devaluation: A Critical Appraisal of the IMF's Policy Prescriptions," American Economic Review, American Economic Association, vol. 73(2), pages 359-363, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gérard Grellet, 1987. "Les politiques d'ajustement orthodoxes. Un point de vue critique," Revue Tiers Monde, Programme National Persée, vol. 28(109), pages 9-23.
    2. Howard R. Vane & Chris Mulhearn, 2006. "Interview with Robert A. Mundell," Journal of Economic Perspectives, American Economic Association, vol. 20(4), pages 89-110, Fall.
    3. Duo QIN & Xinhua HE & Pilipinas QUISING & Shiguo LIU, 2010. "Modeling Monetary Policies in China (PRC)," EcoMod2004 330600115, EcoMod.
    4. Muhammad Hussain, 1991. "Money, Income, and Causality: Some Evidence from Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 30(4), pages 907-918.
    5. Eduardo Amaral Haddad & Natalia Cotarelli & Thiago Cavalcante Simonato & Vinicius Almeida Vale & Jaqueline Coelho Visentin, 2020. "The Grand Tour: Keynes and Goodwin go to Greece," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 9(1), pages 1-21, December.
    6. Nafziger, E. Wayne & Auvinen, Juha, "undated". "War, Hunger and Flight: The Political Economy of Humanitarian Emergencies," WIDER Working Papers 295357, United Nations University, World Institute for Development Economic Research (UNU-WIDER).
    7. Waliullah & Mehmood Khan Kakar & Rehmatullah Kakar & Wakeel Khan, 2010. "The Determinants of Pakistan’s Trade Balance: An ARDL Cointegration Approach," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 15(1), pages 1-26, Jan-Jun.
    8. Sebastian Edwards, 1987. "Economics Liberalization and the Equilibrium Real Exchange Rate in Developing Countries," UCLA Economics Working Papers 433, UCLA Department of Economics.
    9. Philippe Hugon, 1987. "Les jeux économiques et les enjeux des politiques orthodoxes en Afrique : le cas de Madagascar et du Nigeria," Revue Tiers Monde, Programme National Persée, vol. 28(109), pages 95-121.
    10. Gachet, Ivan & Girjalva, Diego & Rivadeneira, Ana & Uribe, Carlos, 2007. "Un Marco de Consistencia Macroeconómica para la Economía Ecuatoriana: Un Regreso a los Fundamentos [Macroeconomic Consistency Framework for the Ecuadorian Economy: Getting Back to Fundamentals]," MPRA Paper 16799, University Library of Munich, Germany.
    11. Donyina-Ameyaw, Samuel, 2004. "A Small Macroeconmetric Model Of Trade And Inflation In Ghana," The Warwick Economics Research Paper Series (TWERPS) 696, University of Warwick, Department of Economics.
    12. Ghani E., 1984. "Effects of devaluation on employment and poverty in developing countries," ILO Working Papers 992349323402676, International Labour Organization.
    13. Mr. James M. Boughton, 2002. "On the Origins of the Fleming-Mundell Model," IMF Working Papers 2002/107, International Monetary Fund.
    14. Helmut Reisen, 1998. "Domestic Causes of Currency Crises: Policy Lessons for Crisis Avoidance," OECD Development Centre Working Papers 136, OECD Publishing.
    15. Carneiro, Dionisio, "undated". "Country Study 11," WIDER Working Papers 295377, United Nations University, World Institute for Development Economic Research (UNU-WIDER).
    16. A. E. Akinlo & A. F. Odusola, 2003. "Assessing the impact of Nigeria's naira depreciation on output and inflation," Applied Economics, Taylor & Francis Journals, vol. 35(6), pages 691-703.
    17. Psofogiorgos, Nikolaos - Alexandros & Metaxas, Theodore, 2017. "IMF, Democracy and Economic Development: Review and Critique," MPRA Paper 79403, University Library of Munich, Germany.
    18. Bošnjak Mile, 2019. "Determinants of Current Account in Cases of Serbia and Romania: Time-Varying Parameters Approach," South East European Journal of Economics and Business, Sciendo, vol. 14(1), pages 21-33, June.
    19. Helpman, Elhanan & Razin, Assaf, 1987. "Exchange Rate Management: Intertemporal Tradeoffs," American Economic Review, American Economic Association, vol. 77(1), pages 107-123, March.
    20. Suescun, Rodrigo, 2005. "Fiscal space for investment in infrastructure in Colombia," Policy Research Working Paper Series 3629, The World Bank.

    More about this item

    Keywords

    International Development;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:widerw:295392. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/widerfi.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.