A Value Proposition for Egypt Beyond Revolution: Competitiveness Analysis with Policy Recommendations

The Egyptian revolution of Jan 25th 2011 presents a cross road in Egyptian history that hasn’t been witnessed since ancient times. This peaceful and truly popular revolt came as a result of system failure on both political and economic levels of the regime of Hosni Mubarak who has been ruling the country for the past 30 years with political oppression, deteriorating standards of living and lack of economic equity. Persistent corruption with R&D spending less than 0.5% of the country’s GDP generated an elusive path of artificially “high” growth rates. Now as Egypt embarks on its new beginning a number of questions are in desperate need for answers. This paper examines Egypt’s economic performance before the revolution with an analysis of Egypt’s real GDP growth, chronic inflation trends, poverty and income distributions as well as the performance of the economy’s sectors and relative national competitiveness on the global scale. The analysis brings to light the most critical economic problems which was the main trigger of the January 25th revolution. The paper also examines the short term impacts of the revolution on the economy. The analysis then maps the unique opportunity in front of Egypt to step change its economy on macroeconomic as well as sectoral levels with a “Unique Value Proposition” as the recommended framework. Critical policy recommendations are then founded on a proposed cycle of competitiveness in order to achieve a higher economic quality of life for the masses and transform Egypt into an innovation driven economy in the long run. Starting with education, leading to cultural transformation and institutional governance, followed by reaching a competitive economy based on efficiency, are parallel prerequisites to achieving an innovative Egyptian economy in the long run with global competitiveness. Concrete strategies and timeline action plans are proposed.