By J.Heyworth- Dunne
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Extra info for An Introduction to the History of Education in Modern Egypt
In late 1973, President Sadat shifted to a more outward-looking, ‘open door’ development policy (infitah), designed to encourage domestic and foreign private investment in Egypt. New laws and incentives were introduced, notably Law No. 43 of 1974, to improve the investment climate and assure investors of the government’s commitment to the private sector; and closer political and economic ties were developed with the West and with the United States in particular (following the 1978 Camp David agreements).
When the IMF reviews the stand-by towards the end of 1987, stricter targets may be introduced. If the current programme were to be adhered to, and future programmes were to follow on, it is possible that reform could show positive results. Yet many observers are sceptical on several counts. First, the economy is vulnerable to exogenous shocks—the oil price being a prime example—which could undermine the whole programme. Second, these observers doubt whether the Egyptian government’s heart is really in the reform programme.
In June 1987, for example, the Central Bank blocked al-Rayan’s attempt to buy Bank of America’s 40% share in Misr America International Bank; and it has also stalled the Saudi-based al-Baraka group’s plans to buy a 46% stake in the local Pyramids Bank and convert it to Islamic principles. By taking a firm stand, the authorities risk provoking powerful fundamentalist Muslim opposition. Yet failure to do so could jeopardize the stability of the financial system on which a successful diversified economy will depend.