A Decade After Egypt's June 30 Uprising: Economic Progress or Recession

Ali Zaki analyses Egypt's economic path from 2013 until today.

As we pass the tenth anniversary of Egypt's June 30 uprising, it is crucial to question the true impact of this significant event on the nation's economy. While some might point to signs of recovery, a closer look paints a starkly different picture. Key issues, such as the lingering effects of the currency crisis and the potentially misguided project of the new administrative capital, require a critical examination.

The Unresolved Currency Crisis

The aftermath of the June 30 uprising pushed Egypt into a severe currency crisis. Despite claims of recovery, the reality remains that the Egyptian pound's devaluation led to rampant inflation that hurt the average citizen more than anyone else. Imported goods became more expensive, forcing people to tighten
their belts and struggle to make ends meet.

Moreover, while the devalued pound did attract some foreign investment, it hasn't done enough to offset the negative impacts. The fundamental issues that led to the crisis, such as political instability and a faltering tourism sector, remain largely unresolved, casting a long shadow over Egypt's economic prospects.

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New Administrative Capital: Ambitious or Reckless?

The New Administrative Capital, a project announced in 2015, is estimated to cost about $58 billion. Critics argue that this enormous sum could be better utilized in other sectors. For instance, as of 2018, about one-third of Egyptians were living below the poverty line, and the country's expenditure on healthcare was around 1.6% of the GDP, lower than the average for lower-middle-income countries.

This multi-billion-dollar initiative seems more like a distraction from the government's inability to address deep-rooted economic and social issues, rather than a well-thought-out solution to Egypt's problems. Critics argue that the funds invested in this grand project could have been better spent on education, healthcare, and public services - areas that could directly improve the lives of Egyptian citizens.

In the face of such economic challenges, the decision by the Egyptian government to construct a new administrative capital raises eyebrows. While intended to alleviate Cairo's overpopulation and stimulate economic growth, the project has been criticised for being overly ambitious, costly, and potentially unrealistic.

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Economic Impact: A Mirage of Progress?

A decade after the June 30 uprising, Egypt's economic landscape continues to be characterised by instability and uncertainty. The underlying issues that contributed to the currency crisis remain largely unaddressed, and the mega-project of the new administrative capital seems more of a gamble than a guarantee for the future.

The economic reform program initiated by the Egyptian government, backed by a $12 billion loan from the International Monetary Fund (IMF), led to a series of economic austerity measures. While these reforms did help in stabilizing macroeconomic indicators, they came at a significant cost for ordinary Egyptians. The reform measures led to increases in the prices of fuel, electricity, and public transportation as subsidies were slashed. In terms of debt, Egypt's public debt stood at around 90% of its GDP in 2020, placing it among the countries with high debt burdens.

True economic progress is not just about grand projects and foreign investments; it’s about the well-being of the people and sustainable, inclusive growth. So, as we mark this milestone, we must question - has Egypt truly made economic progress, or are we just skimming the surface?