Former US diplomat David Schenker recently wrote an article in the US magazine The National Interest asking “Is Egypt headed toward collapse?” The answer, of course, is no. While the economic situation is experiencing various challenges, Egypt is far too big to fail. 

Egypt’s significance as a key regional player cannot be overstated, particularly in the context of Middle East stability. As a strategic ally to the US, its failure would be detrimental to US interests, including its efforts to combat terrorism and maintain peace in the Israeli-Palestinian conflict. 

Egypt has also taken on a significant burden in combating illegal immigration and providing refuge to those in need, which underscores its commitment to human rights and humanitarian principles. It is imperative that the international community continues to support Egypt’s efforts to strengthen its economy and governance structures, as any failure to do so would have significant ramifications for the entire region.

When it comes to analysing the Egyptian economy, it is all too common to encounter a one-sided view that fails to consider the multitude of internal and external factors that can impact a developing country attempting to recover from a revolution. This analytical bias is often fuelled by deliberate attempts to falsely portray Egypt as an unstable country, which can only serve to exacerbate the challenges it already faces. 

As a developing country with a population of 110 million people, Egypt has had to contend with a variety of challenges on different scales. The Covid-19 pandemic, which affected the entire world, hit the developing countries particularly hard, while the Russian-Ukrainian war, international supply chain problems, inflation, and other factors have only made it harder for Egypt to take steps towards economic recovery. 

Despite all these obstacles, Egypt has continued to work towards its economic goals with determination and perseverance.

In addition to the challenges posed by Covid-19 and the Russian-Ukrainian conflict, deliberate misinformation has also had a significant impact on the Egyptian economy. This misinformation campaign has not only undermined the social welfare of the Egyptian people but has also fuelled a sense of anger and popular discontent that has threatened to destabilise the state and impede any opportunity for economic growth. 

Such misinformation has led to a distorted view of the country’s economic situation, discouraging real investment in Egypt and hindering efforts to rebuild and revitalise the economy. It is essential to address this issue and counteract such misinformation in order to create a stable and conducive environment for economic development.

While it is true that Egypt’s external debt has increased significantly since President Abdel-Fattah Al-Sisi was elected in 2014, it is worth noting that this is not necessarily an uncommon occurrence in developing countries. Many developing countries rely on borrowing to finance large-scale projects, and Egypt is no exception. The government has invested heavily in infrastructure projects, such as the expansion of the Suez Canal and the construction of the New Administrative Capital, which are aimed at boosting economic growth and creating job opportunities.

As for the high percentage of the budget devoted to servicing the national debt, this is also not uncommon in many countries around the world, including developed ones. It is a challenge for any country to balance debt-servicing with other spending priorities, but the Egyptian government has taken steps to reduce the budget deficit and improve fiscal discipline.

Regarding inflation and food prices, it is worth noting that these are also affected by global and regional economic conditions, and not solely by the policies of the Egyptian government. The Covid-19 pandemic, for example, led to supply chain disruptions and increased food prices worldwide. Additionally, the Russian-Ukrainian war and other geopolitical events have had an impact on global commodity prices, including food prices.

The Egyptian government is currently facing criticism for floating its currency, but this was actually a recommendation made by the International Monetary Fund (IMF). This is a clear example of how the IMF often forgets its true purpose and resorts to using double standards when it comes to supporting the Middle East. 

Additionally, the IMF tends to overlook the unique challenges and nature of each country, failing to provide adequate support to address these issues. Instead, it simply provides a list of recommendations as a condition for financial support, despite the fact that most countries require assistance in addressing a multitude of factors. 

The IMF should assist nations dealing with worldwide disasters and stress, particularly those with limited access to international assistance and resources. Based on that, the IMF should ensure that it engages in development programmes that are tailored to the specific needs of the country concerned and that these programmes are not merely a tool for achieving the IMF’s internal objectives. 

Pushing countries in a way that has been done with the current situation in Egypt and exposing governments to an adhesion agreement as the only alternative in a flimsy negotiation process should be avoided. It should also be born in mind that providing assistance to Egypt or other nations, particularly those enduring economic challenges, is not a gift. Instead, it is the role of the IMF to give such assistance, and in doing so it is serving its stated cause even if there is also a hidden one.

The military’s involvement in the Egyptian economy has raised concerns among investors, which could potentially harm the country’s economic prospects. However, there have been instances where such involvement has been necessary to counter planned campaigns against the government and the country itself. While it is important for strategic intervention to promote economic stability, the challenge lies in striking a balance without resorting to undue criticism, particularly in a country with unique circumstances. 

Despite the challenges, many Egyptians have faith in their military, especially during difficult times. It is worth noting that several countries, among them China, directly support their economies through military involvement, while others like the US provide indirect support through funding veteran projects and companies such as Boeing, as well as entities such as the Michigan Economic Development Corporation (MEDC).

Regarding the military’s role in the economy, the measures that Egypt is undertaking to bolster its business environment, such as the implementation of the State Ownership Policy Document, should be emphasised. This document seeks to enhance the management of state-owned assets and foster a more favourable investment climate in Egypt. Essentially, it envisions the withdrawal of state involvement from investment and various economic sectors, with private investors assuming control instead. The overarching objective is to curb state competition with the private sector and avoid interference in its undertakings.

Egypt is a developing country that faces a multitude of challenges, both internal and external, in its quest for economic recovery and growth. However, the one-sided view often presented by critics fails to consider these complexities and the impact of deliberate misinformation campaigns on the country’s economic stability. 

To address these issues, it is essential to have more support from economic experts and critics providing constructive analysis of the recommendations and policies of the IMF in supporting developing countries like Egypt. The IMF should ensure that its development programmes are tailored to the specific needs of each country and are not merely a tool for achieving its internal objectives. Furthermore, while the military’s involvement in the economy has raised concerns among investors, it can be necessary to promote economic stability in a country like Egypt. 

Overall, it is vital to recognise the challenges facing Egypt and work towards creating a stable and conducive environment for economic development. Egypt’s strategic location, strong military, historical and cultural significance, and economic potential make it an essential player in the Middle East and beyond. As a key ally of the United States, Egypt’s stability and prosperity are crucial for regional security and the resolution of conflicts. 

With its growing population and dynamic economy, Egypt has the potential to become a major regional power and a hub for trade and investment. Its rich heritage and diverse society also make it a unique and important voice in the global community.

* The writer is a professor of international law.

* A version of this article appears in print in the 18 May, 2023 edition of Al-Ahram Weekly