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Aspects of the Economic Reform and Structural Adjustment
Program
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Economic Reform and Structural Adjustment Program in
Egypt (Nasser,
H. 1997)
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ERSAP is divided into three basic groups, each relevant
to certain effects on the society and on
WOMEN as
members of the society. |
The
first group of ERSAP aims at economic stability
through decreasing the inflation rates and the deficit
in both the local and foreign balances. Therefore, this
group of policies endeavors to reduce the public
expenditure through various programs such as employment
policies, which aim at reducing the rate of wage growth,
and through the financial policies which attempt to
rationalize the government expenditure in the service
sector (health and education) and to reduce the subsidy
ratio to total expenditure. These policies aim also at
improving the public revenues depending on indirect
taxation. |
The
second group of ERSAP aims at realizing an
economic growth through a number of policies aiming at
transferring the public expenditure from the service
sectors to the productive sectors and from consumption
to investment, by introducing a change in the relative
prices of goods and services to the benefit of tradable
goods. |
The
third group of ERSAP includes the policies which
aim at realizing improvements in the rate of growth of
GDP such as trade liberalization policies, the reduction
of the government role in the economic activities, the
improvement in the money and capital markets, the
establishment of a free pricing system, the
encouragement of the market economic system, the
integration with the external world and the improvement
of the human capacities through developing the incentive
system. |
An obvious
difference exists in the nature of the
various structural adjustment policies,
according to the category of each group of
policies. It is normal that the policies of
the first group of ERSAP would have
recessional effects, due to the limitations imposed on
the supply of money and the reductions in the government
expenditure. All these measures should result into
negative effects on real incomes as well as employment
opportunities. As for the second and third group of
policies of ERSAP, these are of expansionist nature by
transferring the resources from the service sectors to
productive sectors, which produce tradable goods. |
Relevant to
the previous remark is the time interaction
between the various policies of ERSAP. The
policies in the first group are characterized by
recessional effect occurring immediately, given that
most of these policies imply procedural policies and as
soon as they are undertaken, their effects occur.
Therefore, their social impact occurs in the short run.
As for the expansionist effects of the second group of
policies of ERSAP it is expected that these policies
would occur after a relatively longer period of time.
This is due to the significant amount of financial
resources needed for this group of policies, the
presence of some problems related to the inflexibility
of the productive systems, the need for new laws and
regulations and the need of highly skilled personnel
available. |
The third main
point in order to understand the nature of
the social impact of the ERSAP is the difference in
the degree of intensity from one country to another,
according to several factors such as the size of
population, the burden of foreign debt, unemployment
rate, dependency rate and the percentage of those who
live below the poverty line. |
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Handy, H. & A. Subrmanian (1997) "The Egyptian
Stabilization Experience"(Washington D.C.: International Monetary Fund)
Korayem, Katima (1997) "Egypt's Economic Reform and
Structural Adjustment", Working Paper No. 19, (Cairo :
The Egyptian Center for Economic Studies)
Laithy, Heba El, and Oman, O. M, "Profile and Trend
of Poverty and Economic Growth in Egypt", A Background
Paper Prepared for Egypt Human Development Report 1996, UNDP
Subramanian, Arvid (1997 ) “The Egyptian
Stabilization Experience: An Analytical Retrospective“
(Washington, D.C.: International Monetary Fund)
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Testing for the significant change in the Egyptian
Economy under the Economic Reform Program
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As Egypt is characterized by a relatively high
population growth rate as well as high dependency rate
(which reaches 37%) and a relatively low participation
rate in the labor force ( 28.4% in the last Census) and
a relatively high poverty incidence rates(22.47%and
23.2% the lowest poverty line and 44.9% and 50.2% the
highest poverty rate in urban and rural areas,
respectively), it is expected that the negative social
effects of ERSAP in the short run will be intensified. |
Grigorian, David A. & Rania A. Al-Mashat (1977) "Economic
Reforms in Egypt: Emerging Patterns and Their Possible Implications”
(Washington D.C.: World Bank)
El-Tawil, Mona Samir (1997) Development [sic] and reform
in the third world : an analysis of the Egyptian
economic reform program.
Thesis (Cairo: American
University in Cairo. Dept. of Sociology, Anthropology,
Psychology and Egyptology)
Omran, Mohammed (2001) “Testing for the Significant
Change in the Egyptian Economy under the Economic Reform Programme Era“
Aly, Abdel Hamid (1994) The Impact of Structural
Adjustment and Stabilization Policies on the Labor
Market in Egypt.
A paper prepared for the T.W.F & UNICEF
Soliman, Azza Abdel Aziz. (1995) Programme of economic
reform & structural adjustment & its effect on Egyptian
woman in labour force
(Cairo: Cairo Demographic Center)
Economic and Social Commission for Western Asia (1998)
Impact of Economic Reform Policies on Poverty in
Selected ESCWA Member Countries: Egypt, Jordan and Yemen
(New York: United Nations)
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