Egypt’s Military Undermines Its Economic Revival

As Egypt marks the third anniversary of its bailout by the International Monetary Fund, the results are decidedly mixed. While the state has managed to significantly reform its subsidy program, lower its budget deficit, strengthen its reserves, and devalue the pound, ordinary Egyptians have paid a significant cost. Austerity measures introduced to improve efficiencies in the market, coupled with the pound’s devaluation, have devastated their purchasing power and driven many into poverty.

There is little gain to show for all this pain. Exports are down, the purchasing managers index has been negative nearly every month since the bailout began—indicating economic contraction outside of the oil and gas sector—and non-oil foreign direct investment is small and shrinking.