Based on a critical analysis of the various laws that govern foreign investment and banking in Egypt, the author explores the regulatory factors that impede the functions of private banks in Egypt. He situates his analysis in the context of a survey of the literature on the consequences of multinational investment in the less-developed countries for international capital movements, indigenous production, social structure and income distribution, technology and patterns of consumption. He describes the history of the banking system in Egypt and the situation at the end of June 1984, the role in economic development of the private commercial and investment and business banks established under Egypt’s open door economic policy (Investment Law No. 43 of 1974), their sources and uses of investment, and their influence on public sector banks, the national economy and the balance of payments. He lists specific problems preventing private banks from increasing their contribution, such as inability to extend credit facilities in local currency, inability to accept deposits in local currency, inability to effect foreign exchange dealings in Egyptian pounds, and inability to obtain collateral in a borrower’s assets, and recommends amending those regulations that at present limit the ability of private banks to do business. Bibliogr.
