It is not easy to evaluate economic development in Egypt in the 1970s and 1980s. On the one hand, the ‘infitah’ or open door policy of President Sadat resulted in dynamic economic growth. On the other hand, Egypt has neither developed strong industrial production for the domestic market nor succeeded in encouraging exports of manufactured goods and it has remained heavily dependent on food imports. After more than fifteen years of the open door programme, the basic policy issues are still being debated and the government still hesitates as to how far it can go. The author argues that many attacks on ‘infitah’ – that it compromises economic sovereignty, that it brings corruption, that it enhances foreign influence – are misplaced. The real issue is that of poor execution of the programme. The open door policy, attempting to achieve a variety of objectives, failed in its primary goal of encouraging productive exports and attracting foreign investment. Law 43 fell short of liberalizing the whole economy, compromising between pressure to give the private sector a bigger role and at the same time not willing to give up much of the State’s control. As a result of many inconsequences and loopholes, the legislation was biased towards marginal and unproductive activities. In sum, Egypt’s economic problems are attributable to wide price distortions, excessive government intervention, creation of artificial barriers to international trade and lack of consequence in the open door legislation. Ref.
