The Relation between Economic Transition and Political Transformation – Egypt in the Light of EEC's Experience

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Suzanna Sobhy ElMassahFollow
Ola Al-Sayed

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This study investigates the role of political transformation to practice a successful economic transition. Though most of EECs have started from similar points yet they didn't all reach the same levels. EECs have proved that countries, which start transition process with democratic institutions and civil liberties, are able to achieve faster economic transition. The paper concluded a relation between economic transition and political transformation, though subject to democracy consolidation. However, the causal path is still debatable. Egypt showed bad performance in all economic transformation indicators; the worst of all were the level of socio economic development and welfare regime. This could be understood in the light of artificial political transformation prior 2011, followed by security and public disorder in addition to immersing the successive governments and general deterioration of economic conditions in the wake of January 2011 events. The lack of strong government with legitimate institutions and law enforcement to protect property rights, leads more quickly to chaos rather than to successful market economy. Therefore, the challenge for Egypt is bi-dimensional; political transition will not be consolidated without the support of the economic performance, otherwise people will prefer going back to the authorized rule even with corruption. The negative correlation between economic and political transformation in Egypt could be explained by unconsolidated political transformation in addition to the public pressure on Egyptian executives. Egypt has strong potential for a dynamic economy including a youthful workforce, gorgeous tourist places, excellent access to technology, and an exclusive geographic location. The right combinations of policies are very critical for Egypt to avoid the risk of being trapped in a vicious cycle of economic sluggishness and persistent sociopolitical conflict. A clear view of the political economy and with the support of the international community is highly required. The main challenges for the recently elected president, Abdel Fattah El-Sisi, are to assure security followed by inclusive growth policies to generate new job opportunities. That would expect to relax the social unrest to accept further transition policies by the new government.




Economic Transition, Political Transformation, Democracy, Egypt, EEC

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