NASSER’S ERA (1952 -1973)
WHAT ARE THE MAIN ECONOMIC POLICIES DURING THIS
PERIOD ?
The revolution of 23 July 1952 transformed the Egyptian
economy which is based on the private property, to an
economy that is formed mainly by the public sector.
The reasons?
a. In 1956 the united states and great Britain governments
withdraw the offers of economic and financial support for
building the Aswan Dam. As a response Nasser nationalized
The Suez Canal Company so that incomes collected from
passing fees may become a financing source for building the
dam.
b. The revolutionary government has lost all hope in the
possibility of achieving a complete and efficient economic
and social development with the free economy system.
Therefore moves on 1956 to the nationalization of the
industrial and financial structure.
In the economic policy of creating a strong public sector
that has a strong powerful role in the economic and social
development of Egypt we can find 4 separate periods:
1951- 1956; 1957 – 1960 ;1961 -1965 ;1966 -1973.
First period (1951 -1956 ) Agricultural reform
The agricultural reform was the main objective of the
revolutionary government.
The laws of the reform limited the private property to the
agricultural land at 200 feddans and the excess land was
distributed to landless peasants.
The stipulated incentives for forming agricultural
cooperatives.
Second period ( 1957-1960) Industrial Reform
A significant growth in state intervention in the economy
through the nationalization of private enterprises;
(which is
changing control and ownership of these private enterprises
to public sector).
The Industrialization Policy states that the government will
finance the development projects of the heavy industry. And
the light industry will be financed by private property
sector.
Enlarging the public sector’s proportion by the
nationalization in 1957 of the foreign properties in Egypt.
The government had industrialization the increase in the
population welfare and the decrease of foreign influence in
Egyptian economy.
Third period: 1960-1965- National Planning
The Egyptian economy was based on economic and social
development planning as a method of macroeconomic
management.
This period was the beginning of the National Planning.
The plan was divided in two 5 year plans.
From these 10 year plan only the first 5 year plan was
applied.
The Implementation of the first 5 year plan (1960/61 -
1964/65) had as objective:
The acceleration of the economic growth rate & the
distribution of incomes in favor of the low income social
categories.
The Implementation of the first 5 year plan:
1.
Achieved implementing some economic
development strategies.
2. Achieved the continual industrial developments
through directing the investments in this sector.
(The amount of investments directed to industry was
34.1% and the total investments to the other productive
sectors were 60.1%).
3. Achieved a large contribution of the
Agricultural sector to the industry financing & the
transfer
of an important part of the agricultural sector’s
income to the industrial sector.
This was accomplished based on the export of the
agricultural products.
Fourth period: 1967 -1973 War Economy period
In this period, the Egyptian economy was oriented in the
direction of fulfilling military objectives, neglecting the
accomplishment of the second year five-year plans
objectives.
In the war economy period, the rate of the Egyptian
economic growth is lower than in the previous period
because of the 1967 war conditions, which had imposed big
investment for military purposes.