the research and innovation system in egypt - ARTI Puglia

At the turn of the millennium, monetary pressures have eased more with the continued oil
price rise since 2002, increased natural gas exploration and production and a moderate
rebound in the sensitive sector of tourism. Egypt’s reform record has substantially
improved since Nazif government came to power in 1994. Egypt has made substantial
progress in developing its legal, tax and investment infrastructure. The reform programme
is still a work in Progress.
Four years into a robust economic expansion, this country has shaken off its history of
Arab state socialism and embraced the free market. A rush of construction is throwing up
office buildings. Sluggish state-owned companies from banks to department stores are
being sold to private investors, and foreign capital is flooding in, lured by the scent of
certain profit. Egypt today has all the earmarks of a gathering boom. Ambitious economic
reforms launched in 2004 have won plaudits from the business community. Economy
grows at an annual rate of about 7%. Egypt’s reformist prime minister, Ahmed Nazif,
remains committed to the transition from a bloated state-centric economy to a more
market-oriented one.
1.2 Reform Era
Under comprehensive economic reforms initiated in 1991, Egypt has relaxed many price
controls, reduced subsidies, reduced inflation, cut taxes, and partially liberalized trade
and investment. Manufacturing become less dominated by the public sector, especially in
heavy industries. A process of public sector reform and privatization has begun to enhance
opportunities for the private sector. Agriculture, mainly in private hands, has been largely
deregulated, with the exception of cotton and sugar production. Construction, nonfinancial
services, and domestic wholesale and retail trades are largely private. This has
promoted a steady increase of GDP and the annual growth rate. The Government of Egypt
tamed inflation bringing it down from double-digit to a single digit. Currently, GDP is rising
smartly by 7% per annum due to successful diversification.
Gross domestic product (GDP) per capita based on purchasing-power-parity (PPP) increased
fourfold between 1981 and 2006, from US$ 1.355 in 1981, to US$ 2.525 in 1991, to US$
3.686 in 2001 and to an estimated US$ 4.535 in 2006. Based on national currency, GDP per
capita at constant 1999 prices increased from EGP (Egyptian Pounds) 411 in 1981, to EGP
2.098 in 1991, to EGP 5.493 in 2001 and to EGP 8.708 in 2006. Based on the current US$
prices, GDP per capita increased from US$ 587 in 1981, to US$ 869 in 1991, to US$ 1.461
in 2001 and to an estimated US$ 1.518 (which translates to about US$ 130 per month) in
2006. According to the World Bank Country Classification, Egypt has been promoted from
the low income category to lower middle income category. Average wages in 2007 hover
around $8-10 per day.
The reform programme is a work in progress. Noteworthy that the reform record
has substantially improved since Nazif government came to power. Egypt has made
substantial progress in developing its legal, tax and investment infrastructure. Indeed,
over the past 5 years, Egypt has passed, amended and admitted over 15 legislative pieces.
The economy is expected to grow by about 7%-8% in 2007/2008.
12 the research and innovation system in Egypt