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brief history on political economy in egypt

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Nihal El Banna 900061813 PolS. 202. Prof. Ninette Fahmy. Assignment 2. 10/15/2007. A Brief History on Political Economy in Egypt Political economy according to Encyclopedia Britannica is a social science concerned with the raising of revenue by the state and the increase of the state's general resources. Political economy has caused both world wars in a sense. Meaning, that Germany's motive to politically dominate Europe's heartland - in both world wars - was economic in nature. Germany needed markets were it can sell its manufactured products, during its era of industrialization, and markets to secure its supply of cheap raw materials. Thus, its political decisions and foreign policies were based on economic desires. While in World war two, Germany's desire to acquire colonies all over the world was also in attempt to boost its economy. Meanwhile, Britain, France and the United States helped Germany prosper until it was able to threaten their security in Europe. These super powers helped Germany because they had political motives which were keeping Eastern Europe guarded by a powerful capitalist country like themselves, against the rising influence of communism in the Soviet Union and their satellites.1 In Egypt, politics has had many important consequences on the Egyptian economy and vice versa. ...read more.


not be able to establish a strong political influence, threatening the republican regime.6 Moreover, if the state controls all resources then they selectively benefit individuals and/or groups who are loyal to the state.7 As a result, via economic means, the state was able to form and guarantee the loyalty of several influential groups and individuals in society. In the following decades, during Sadat era, the condition has changed as the Soviet Union seemed less cooperative with Egypt. Meanwhile, after the October war in 1973, Egypt's relations with the U.S. seemed to improve. For instance, the U.S. was a leading donor of foreign aid to Egypt.8 As a consequence, Egypt had to invest its foreign aid in a way not contradicting with the U.S. benefits in the region, and naturally the Open Doors policy was adopted.9 The Open Doors policy reflects on the decrease on trade embargoes and tariffs in trade especially with Egypt's Middle Eastern partners.10 (Tariffs and other forms on trade restrictions were imposed during Nasser's era). Once more the importance of foreign aid to Egypt's economy plays its role when Arab countries start supplying Egypt with aid after the Gulf war. ...read more.


proper representation nor the finance to pose a real threat on the political system.16 Third, the Egyptian wealthy entrepreneurs were mostly policy makers at the time of Sadat, and they were so much for the Open Doors policy, because this would give them the opportunity to broaden their investments and becoming wealthier in that sense.17 In conclusion, regarding Egypt's political economy status, presently and in the future, it seems that the country's market economy has to undergo a reconstruction phase, through which Egypt could be more competitive in the international market in the era of globalization. The political regime in Egypt has to be aware of the economic benefits returning on society if proper economic legislations are implemented. Hence, the political regime is less likely to be threatened if people are economically satisfied. The Egyptian government has to put into consideration another level of negative consequences if the country does not improve economically. Such negative consequences are on the level of its regional political status. In other words, Egypt leading political role in the Middle Eastern region has diminished during the last two decades. Meanwhile, other Arab countries, such as Saudi Arabia, had become more influential due to their astonishing economic performance. ...read more.

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