Guest Post: Egypt’s own Industrial Revolution

Guest post from Ghanem Nuseibeh, Founder of Cornerstone Global Associates and Senior Visiting Fellow at King’s College London

The regime change in Egypt, as historical as it may be, will be easily dwarfed in its impact by an economic miracle on the scale of Britain’s Industrial Revolution.

Regardless of the causes of the Egypt’s regime change, the most positive effect it had is the removal of a complex, quasi-governmental system of exceptional corruption that stifled the chances of economic development.

That has gone, for good.

What remains within Egyptian society are factors that are often seen as challenges and risks, but  with the right policies and catalysts, can have a transformative impact on Egypt and the whole of the Arab region.

Those include the military’s grip on large chunks of the country’s economy, a high demographic growth rate and an unemployed youth bulge. Those are precisely the ingredients that Israel needed to create its so-called “Start-Up Nation” economic miracle in the early 1990’s.

Egypt may even have more favourable conditions than Israel’s: it has regional market access and regional capital.

The plan: A $2 billion fund that gives grants to scientists and engineers to develop products, perhaps under the umbrella of the military, can not only lead to creating hundreds of thousands of jobs, but give Egypt years and years of economic growth. Such an initiative would need Gulf financial commitment, who should see this as an investment that will generate wealth, rather than a cost.

Achieving this will not be easy, but will create an economic miracle that has the potential to be as big as the Industrial Revolution.

The government, the military as well as Gulf backers all have a role to play in ensuring that a Gulf-backed mega venture capital-like fund run under the auspices of the Egyptian military becomes the nucleus of the Arab Economic Spring.


  • Nadine
    Posted August 6, 2012 at 2:06 pm | Permalink

    An okay idea in theory, but I wouldn’t agree that the quasi-governmental system of corruption has gone for good. Reform of the Central Auditing Organization, which monitors Egypt’s public finances, is still on-going. We have no Parliament to pass a freedom of information law, which would go a long way towards a more transparent environment. A law to reconcile investors’ business disputes with the government was passed unilaterally by the military. And an unaccountable military, which has control of significant swathes of the economy, has veto power over legislation. Gulf investors have also been linked with a lot of business corruption. I’d say an anti-corrupt environment and mega venture fund that actually works for Egypt’s economic betterment still have some way to go.

  • Ghanem
    Posted August 6, 2012 at 5:10 pm | Permalink

    I agree that there still is some corruption, but the former levels of “extreme” corruption have gone. Now its more manageable. Clearly a lot needs to be done, but one cannot wait forever. Given the overall set of variables, the time now is right and corruption can be factored in. You cannot delay economic development until everything else is resolved. The involvement of the military can be harnessed for a good purpose and that’s why a plan that needs their involvement will be more likely to succeed than a plan that bets on the curtailment of their influence. Britain’s Industrial Revolution caused much distress and came at a time of imperfect conditions. Israel’s start-up relied on a strong and highly involved military and many other examples.

  • Posted October 1, 2012 at 7:41 pm | Permalink

    Egypt is going to see some incredibly changes in the near future. Now that it’s in the limelight for reasons other than tourism.

Post a Comment

Your email is kept private. Required fields are marked *