Infitah
Encyclopedia
The Infitah was Egypt
ian President
Anwar Sadat
's policy of "opening the door" to private investment
in Egypt in the years following the 1973 October War (Yom Kippur War
) with Israel
. Infitah was accompanied by a break with long time ally and aid-giver the USSR -- which was replaced by the United States
-- and by a peace process with Israel symbolized by Sadat's dramatic flight to Jerusalem in 1977. Infitah ended the domination of Egypt's economy
by the public sector
and encouraged both domestic and foreign investment in the private sector
. The Egyptian Army's crossed the Suez canal in the October 1973/Yom Kippur War
, which most Egyptians considered a strategic victory, gave Sadat the prestige to initiate a major reversal of Gamal Abdel Nasser
's policies.
and a command economy with limited private investment, dominated the political scene. However, by the 1970s, critics believed Egypt's economy, with its large public sector, had evolved into a "Soviet-style system" of "inefficiency, suffocating bureaucracy, and waste." Sadat also wanted to turn Egypt away from its focus on war with Israel and devotion of resources to a large military establishment. He believed capitalist economic policies would build a substantial private sector, and alliance with the United States and the west would lead to prosperity (rakhaa) and eventually democratic pluralism (he did not wish to risk his power to democratic elections while reforming the economy). His infitah policy was heavily influenced by the free-market philosophy while still retaining some socialist elements. It was not only ideologically but also politically motivated: by aligning himself with the capitalist West, and the rich and powerful members of Egyptian society, Sadat differentiated himself from his predecessor, Nasser, while at the same time securing his position in power. According to author Gilles Kepel
, the Infitah was launched in 1975.
under the Nasser regime through education and jobs as doctors, engineers, teachers, lawyers, journalists for the government or parastatals, were left stuck in an "increasingly marginalized, stagnant and low-paying public sector," under al-infitah. Al-Infitah was a shock to the Nasser era middle class reversing the socialist principles of the Nasserism, seeming to revoke policies, of free education, social equality, abolition of feudalism
, nationalization of land and industry, and progressive taxation. At the same time the public sector continued to dominate the economy. The proportion of the population working for the state grew from 3.8% at the height of the Nasserite era, to 10% (about 35% of the country's entire labor force) after the full thrust of al-infitah in the early 1980s. Despite promotion of foreign private investment, the "state's contribution to the formation of investment capital" (72%), barely changed from the mid-1960s to the end of the 1970s.
According to author Tarek Osman
In 1977, negative public reaction to infitah policies led to massive spontaneous riots
involving hundreds of thousands of Egyptians when the state announced that it was retiring subsidies on basic foodstuffs. On 6 October 1981 Sadat was assassinated during a military parade in Cairo.
For more information on the infitah, see Anwar Sadat
.
Egypt
Egypt , officially the Arab Republic of Egypt, Arabic: , is a country mainly in North Africa, with the Sinai Peninsula forming a land bridge in Southwest Asia. Egypt is thus a transcontinental country, and a major power in Africa, the Mediterranean Basin, the Middle East and the Muslim world...
ian President
President
A president is a leader of an organization, company, trade union, university, or country.Etymologically, a president is one who presides, who sits in leadership...
Anwar Sadat
Anwar Sadat
Muhammad Anwar al-Sadat was the third President of Egypt, serving from 15 October 1970 until his assassination by fundamentalist army officers on 6 October 1981...
's policy of "opening the door" to private investment
Investment
Investment has different meanings in finance and economics. Finance investment is putting money into something with the expectation of gain, that upon thorough analysis, has a high degree of security for the principal amount, as well as security of return, within an expected period of time...
in Egypt in the years following the 1973 October War (Yom Kippur War
Yom Kippur War
The Yom Kippur War, Ramadan War or October War , also known as the 1973 Arab-Israeli War and the Fourth Arab-Israeli War, was fought from October 6 to 25, 1973, between Israel and a coalition of Arab states led by Egypt and Syria...
) with Israel
Israel
The State of Israel is a parliamentary republic located in the Middle East, along the eastern shore of the Mediterranean Sea...
. Infitah was accompanied by a break with long time ally and aid-giver the USSR -- which was replaced by the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
-- and by a peace process with Israel symbolized by Sadat's dramatic flight to Jerusalem in 1977. Infitah ended the domination of Egypt's economy
Economic system
An economic system is the combination of the various agencies, entities that provide the economic structure that defines the social community. These agencies are joined by lines of trade and exchange along which goods, money etc. are continuously flowing. An example of such a system for a closed...
by the public sector
Public sector
The public sector, sometimes referred to as the state sector, is a part of the state that deals with either the production, delivery and allocation of goods and services by and for the government or its citizens, whether national, regional or local/municipal.Examples of public sector activity range...
and encouraged both domestic and foreign investment in the private sector
Private sector
In economics, the private sector is that part of the economy, sometimes referred to as the citizen sector, which is run by private individuals or groups, usually as a means of enterprise for profit, and is not controlled by the state...
. The Egyptian Army's crossed the Suez canal in the October 1973/Yom Kippur War
Yom Kippur War
The Yom Kippur War, Ramadan War or October War , also known as the 1973 Arab-Israeli War and the Fourth Arab-Israeli War, was fought from October 6 to 25, 1973, between Israel and a coalition of Arab states led by Egypt and Syria...
, which most Egyptians considered a strategic victory, gave Sadat the prestige to initiate a major reversal of Gamal Abdel Nasser
Gamal Abdel Nasser
Gamal Abdel Nasser Hussein was the second President of Egypt from 1956 until his death. A colonel in the Egyptian army, Nasser led the Egyptian Revolution of 1952 along with Muhammad Naguib, the first president, which overthrew the monarchy of Egypt and Sudan, and heralded a new period of...
's policies.
Overview
Under President Nasser, proponents of statismStatism
Statism is a term usually describing a political philosophy, whether of the right or the left, that emphasises the role of the state in politics or supports the use of the state to achieve economic, military or social goals...
and a command economy with limited private investment, dominated the political scene. However, by the 1970s, critics believed Egypt's economy, with its large public sector, had evolved into a "Soviet-style system" of "inefficiency, suffocating bureaucracy, and waste." Sadat also wanted to turn Egypt away from its focus on war with Israel and devotion of resources to a large military establishment. He believed capitalist economic policies would build a substantial private sector, and alliance with the United States and the west would lead to prosperity (rakhaa) and eventually democratic pluralism (he did not wish to risk his power to democratic elections while reforming the economy). His infitah policy was heavily influenced by the free-market philosophy while still retaining some socialist elements. It was not only ideologically but also politically motivated: by aligning himself with the capitalist West, and the rich and powerful members of Egyptian society, Sadat differentiated himself from his predecessor, Nasser, while at the same time securing his position in power. According to author Gilles Kepel
Gilles Kepel
Gilles Kepel is a French political scientist, specialist of the Islam and contemporary Arab world. He is Professor at the Institute of Political Studies in Paris and member of the Institut Universitaire de France....
, the Infitah was launched in 1975.
Shortcomings
The implementation of al-infitah is generally considered to have been flawed in its over-ambitiousness and its appearance of having abandoning "solidarity with the poor." The government rewarded its cronies and allies (many of whom became quite rich) and built a power base loyal to the regime with concessions on land, goods and commodities; mandates and contracts to agencies and dealerships, but did little to create free markets and an open economy. The millions of previously poor Egyptians who had joined the middle classMiddle class
The middle class is any class of people in the middle of a societal hierarchy. In Weberian socio-economic terms, the middle class is the broad group of people in contemporary society who fall socio-economically between the working class and upper class....
under the Nasser regime through education and jobs as doctors, engineers, teachers, lawyers, journalists for the government or parastatals, were left stuck in an "increasingly marginalized, stagnant and low-paying public sector," under al-infitah. Al-Infitah was a shock to the Nasser era middle class reversing the socialist principles of the Nasserism, seeming to revoke policies, of free education, social equality, abolition of feudalism
Feudalism
Feudalism was a set of legal and military customs in medieval Europe that flourished between the 9th and 15th centuries, which, broadly defined, was a system for ordering society around relationships derived from the holding of land in exchange for service or labour.Although derived from the...
, nationalization of land and industry, and progressive taxation. At the same time the public sector continued to dominate the economy. The proportion of the population working for the state grew from 3.8% at the height of the Nasserite era, to 10% (about 35% of the country's entire labor force) after the full thrust of al-infitah in the early 1980s. Despite promotion of foreign private investment, the "state's contribution to the formation of investment capital" (72%), barely changed from the mid-1960s to the end of the 1970s.
According to author Tarek Osman
"... al-Infitah's main fault was that it was over ambitious. It failed to recognize the complexities of Egypt's socio-economic conditions ... It ignored the limitations of the country's administrative system and the power of the military establishment. ... the mismatch between the skills of the Egyptian middle class and the various economic opportunities springing up as a result ... As such , it was an unrealistically rapid developmental programmed that was doomed to fail."
In 1977, negative public reaction to infitah policies led to massive spontaneous riots
1977 Egyptian Bread Riots
The Egyptian 'Bread Riots' of 1977 affected most major cities in Egypt from January 18-19, 1977. The riots were a spontaneous uprising by hundreds of thousands of lower class people protesting World Bank and International Monetary Fund-mandated termination of state subsidies on basic foodstuffs...
involving hundreds of thousands of Egyptians when the state announced that it was retiring subsidies on basic foodstuffs. On 6 October 1981 Sadat was assassinated during a military parade in Cairo.
For more information on the infitah, see Anwar Sadat
Anwar Sadat
Muhammad Anwar al-Sadat was the third President of Egypt, serving from 15 October 1970 until his assassination by fundamentalist army officers on 6 October 1981...
.
See also
- Anwar SadatAnwar SadatMuhammad Anwar al-Sadat was the third President of Egypt, serving from 15 October 1970 until his assassination by fundamentalist army officers on 6 October 1981...
- Gamal Abdel NasserGamal Abdel NasserGamal Abdel Nasser Hussein was the second President of Egypt from 1956 until his death. A colonel in the Egyptian army, Nasser led the Egyptian Revolution of 1952 along with Muhammad Naguib, the first president, which overthrew the monarchy of Egypt and Sudan, and heralded a new period of...
- LiberalizationLiberalizationIn general, liberalization refers to a relaxation of previous government restrictions, usually in areas of social or economic policy. In some contexts this process or concept is often, but not always, referred to as deregulation...
- October War
- PrivatizationPrivatizationPrivatization is the incidence or process of transferring ownership of a business, enterprise, agency or public service from the public sector to the private sector or to private non-profit organizations...
- NasserismNasserismNasserism is an Arab nationalist political ideology based on the thinking of the former Egyptian President Gamal Abdel Nasser. It was a major influence on pan-Arab politics in the 1950s and 1960s, and continues to have significant resonance throughout the Arab World to this day. It also...
- Arab socialismArab socialismArab socialism is a political ideology based on an amalgamation of Pan-Arabism and socialism. Arab socialism is distinct from the much broader tradition of socialist thought in the Arab world, which predates Arab socialism by as much as fifty years...
- History of modern Egypt