In April of the year 2021, Egypt announced the launch of the second phase of the program (economic reform), which will extend for 3 years and aim for structural treatments for the Egyptian economy (1). This calls us to pause before the first phase (2016-2020) with research and a lesson to find out what its goals have been achieved and what has not been achieved and how to address it. Rather, we will move away from the questions to a broader extent and wonder if this program was even possible to succeed in the first place? Were there errors in the implementation or was the destination wrong from the start.

The research concluded that the economic reform programs that were applied in Egypt during the Mubarak era until the last economic reform program during the era of Sisi that they all focused on the macroeconomic imbalances that include the public budget deficit and the balance of payments deficit and the resulting high inflation rates and a decrease in the value of the currency. And in the cash reserves of foreign currencies. Structural imbalances did not receive due attention in any of these attempts, which ultimately leads to a failure to achieve real development in Egyptian society.

There are many studies that are not counted on the Egyptian economy, but what concerns us is the answer to the question (why did the Egyptian economy fail), or so we claim, or in the case of our study now why every economic reform undertaken by the state fails from the days of Muhammad Ali through the Nasser period and then economic reform Under the auspices of the International Monetary Fund and the World Bank in the nineties until the mid-2000s, and then the recent economic reform on which the study is based.

The Arab Monetary Fund published a study on the economic reform (2) carried out by the Egyptian government from 1990 to 2000, in which it focused on the growth rate of the Egyptian economy before and after the economic reform. Then list the points on which this program is based, and what they achieved. etc.

Specialists almost agree that the economy in Egypt has been suffering for decades, or at least it needs major reforms. Some of them see the gap between the rich and the poor as increasing, and some of them see that the current general indicators are good (the macro level), but reforms must take place at the micro level. Which brings us to the important question and the old and the new at the same time, which is why the Egyptian economy (suffering) for decades until now, but rather why the general indicators of the Egyptian economy now seem to be good and in a right direction, despite the increase in the poverty rate (it reached about 30% of the population ), and the lack of quality of services or even their absence in many areas in the villages, what are the reasons for this and how to deal with it, and the most important question is whether we are on the right path in the first place (despite the good general indicators of the overall economy).

There are several definitions of economic reform, although most of them do not diverge too far from the other, but - in my opinion - the definition that Dr. Ahmed El-Sayed El-Najjar came up with is optimal, as he says that economic reform is a set of measures aimed at removing the imbalances that the economy suffers from, Developing the internal rules for continuous self-growth, raising employment rates, the labor force and capital in an economy whose structure and productivity are being developed and the procedures for establishing business are facilitating, while developing its integration into the global economy on equal and fair terms that take into account its level of development and various social considerations, and at the same time aims to distribute income in a manner fair and combating poverty and building organizations and mechanisms to prevent and combat corruption, to ensure the continuity of economic development (3). This definition explained to us (which is its strength) what are the considerations that must be monitored to know and answer the question: Has any economic reform succeeded or not? (which is a research question), and these considerations or metrics can be summarized in

1- Developing the internal rules for continuous self-growth 2- Increasing the rate of employment and capital 3- Facilitating the procedures for establishing businesses in it 4- Developing its integration into the global economy on equal terms 5- Distributing income equitably 6- Combating poverty 7- Building organizations and mechanisms to prevent and combat corruption.

Based on these considerations, the performance indicators for the success or failure of economic reform will be:

- Unemployment rate

- Percentage of private sector investments (foreign - local) in the economy

-Ease of business setup procedures

-Poverty rate

-Income Distribution

-Organizations and mechanisms to combat corruption

According to the request for the agreement contract between Egypt and the International Monetary Fund, which is found on the Fund’s website (4), the Fund says that the Egyptian economy has suffered from “macroeconomic imbalances due to fundamental structural weaknesses and the prolonged political transition phase,” and that in this context, the authorities have developed a program Comprehensive adjustment and reform in order to restore macroeconomic stability, the policy package developed by national authorities includes the following

Adoption of a flexible exchange rate (floating the Egyptian pound) that guarantees the cancellation of the excessive appreciation of the Egyptian pound, usually building, reserves, and providing safety margins to prevent external shocks

Tightening monetary policy to contain inflation

Adjusting public finances to ensure that public debt remains within sustainable limits in the medium term

Strengthening social safety nets and increasing pro-poor spending in order to offset the effects of reforms on low-income people

- Undertake structural reforms to support inclusive growth, create jobs, increase the volume and diversification of exports, improve the business climate, and strengthen public financial management (4(

By quickly reviewing the objectives of the program, which were achieved, we find that

The growth rate of the GDP did not change significantly from the one that existed before the implementation of the program, it increased by about 1% and then decreased in recent years from the rate before the implementation

- The poverty rate increased to dangerous rates, reaching 32.5% (people with incomes 900 pounds per month), then it decreased to 29.5 in 2019, but it is higher than the percentage that was before the program, 27.8%, and that the percentage of the poor and those threatened with poverty reached 60% of the population, according to the World Bank

Inflation rates fell to almost stable levels of 5% after reaching record rates of 29%.

The external debt increased at huge rates compared to the year before the flotation, reaching 131.5 billion dollars, after it was 49.69 billion dollars in 2015.

-There is a discrepancy between the unemployment rates announced by the Central Bureau of Statistics and the rates of the World Bank, but the employment ratio indicator for the population reveals a dangerous indication that the markets are growing slowly compared to the volume of workers leaving the market, 2.5 million new people have been employed in exchange for an increase Population of 19.5 million people in the last 10 years

- Foreign investments increased by approximately $2 billion, which is almost the same percentage in the energy sector, which indicates their concentration in this sector

Sources

- The Independent Arabic newspaper (1)

- Arab Monetary Fund study on the economic reform program in 1990 (2)

- The Economic Reform and Development Program in the Egyptian Society, An Applied Study (3)

Request to conclude an extended agreement within the framework of the “Extended Fund Facility” (the IMF agreement with Egypt) (4)

- BBC report on poverty in Egypt (5)

Brookings Institution report on Egypt's economic reform program (6)