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Economy, Government Role in the Economy

Egyptian economy, land reforms, privatization, market economy, monarchy

The Egyptian economy was dominated by private capital until the revolution of 1952, which replaced the monarchy with a republic. The new government began to reorganize the economy along socialist lines in the late 1950s. The state played an increasing role in economic development through its management of the agricultural sector after the land reforms of 1952 and 1961. These reforms limited the amount of land an individual or family could own. In the early 1960s the government nationalized much of the industrial, financial, and commercial sectors of the economy. In the 1970s poor performance by much of the state sector and growing shortages of investment capital persuaded the country’s leadership to introduce more liberal economic policies. However, not until 1990 did the government become committed to fundamental economic reforms involving the reduction of subsidies, the removal of price controls, and the privatization of some state-owned industries. These policies were successful in reducing inflation from 20 percent in 1991 to 5 percent in 1997 and in allowing the economy to recover partly from a recession in the early 1990s. Progress toward a purely market economy was slow, however, and huge problems remained. Exports remained sluggish, and in 1998 unemployment stood at 8 percent.

Article key phrases:

Egyptian economy, land reforms, privatization, market economy, monarchy, private capital, unemployment, recession, inflation, new government, revolution, Exports, agricultural sector, republic, economic development, percent, Progress, family, management


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