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The Egyptian Stabilization Experience: An Analytical Retrospective

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  • Mr. Arvind Subramanian

Abstract

This paper analyzes the successful Egyptian stabilization experience during the 1990s, focusing on its distinctive features and contrasting them with the recent experiences of other developing countries. The key policy elements were a large fiscal adjustment, use of an exchange rate anchor that has endured for over six years, supported by prudent monetary policies, and early moves to liberalize interest and exchange markets. The outcomes included the avoidance of an output collapse despite the magnitude of fiscal adjustment; avoidance of stresses on the financial system; reversal of endemic dollarization; financial deepening at the expense of the banking system; and maintenance of external viability despite a lackluster export performance.

Suggested Citation

  • Mr. Arvind Subramanian, 1997. "The Egyptian Stabilization Experience: An Analytical Retrospective," IMF Working Papers 1997/105, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:1997/105
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    Cited by:

    1. Ossama Mikhail, 2004. "Economic Freedom and The Business Cycle: The Egyptian Experience," Macroeconomics 0402002, University Library of Munich, Germany.
    2. Dina M. Yousri & Christian Richter, 2018. "Sociological challenges for Egypt’s development: 1981–2013," International Economics and Economic Policy, Springer, vol. 15(4), pages 727-742, October.
    3. Zaki, Mokhlis Y., 2001. "IMF-Supported Stabilization Programs and their Critics: Evidence from the Recent Experience of Egypt," World Development, Elsevier, vol. 29(11), pages 1867-1883, November.
    4. Philip Arestis, 2003. "Financial Sector Reforms in Developing Countries with Special Reference to Egypt," Economics Working Paper Archive wp_383, Levy Economics Institute.
    5. Marinheiro, Carlos Fonseca, 2008. "Ricardian equivalence, twin deficits, and the Feldstein-Horioka puzzle in Egypt," Journal of Policy Modeling, Elsevier, vol. 30(6), pages 1041-1056.
    6. Mikhail Ossama, 2005. "Economic Freedom and the Business Cycle: The Egyptian Experience," Review of Middle East Economics and Finance, De Gruyter, vol. 3(1), pages 1-19, April.
    7. Yamada, Toshikazu, 2008. "Sustainable Development and Poverty Reduction under Mubarak's Program," IDE Discussion Papers 145, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    8. Mohammed Omran, 2002. "Testing for a Significant Change in the Egyptian Economy Under the Economic Reform Programme Era," WIDER Working Paper Series DP2002-59, World Institute for Development Economic Research (UNU-WIDER).
    9. Mr. Klaus-Stefan Enders, 2007. "Egypt—Searching for Binding Constraints on Growth," IMF Working Papers 2007/057, International Monetary Fund.
    10. Kamal, Mona, 2013. "The Role of Corporate Social Responsibility (CSR) in the Egyptian Banking Sector," MPRA Paper 44697, University Library of Munich, Germany.
    11. Gutner, Tammi, 1999. "The political economy of food subsidy reform in Egypt," FCND discussion papers 77, International Food Policy Research Institute (IFPRI).
    12. Léonce Ndikumana, 2003. "Capital Flows, Capital Account Regimes, and Foreign Exchange Rate Regimes in Africa," Working Papers wp55, Political Economy Research Institute, University of Massachusetts at Amherst.
    13. Achy, Lahcen, 2001. "Equilibrium exchange rate and misalignment In selected MENA countries," MPRA Paper 4799, University Library of Munich, Germany, revised 2001.

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