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Egypt Development Planning
Planning in Egypt remained essentially a blueprint for
investment, and the balance between supply and demand was adjusted
through quasi-market mechanisms and fiscal and monetary policies.
The emergence of Egyptian economic planning could be traced to the
creation in 1952 of the Permanent Council for National Production
(PCNP). The PCNP initiated partial planning by surveying the
country's basic economic resources and proposing investment
projects and budgets. More comprehensive planning awaited the
formulation of the First Five-Year Plan (1960-65). The plan was the
work of the National Planning Committee, which absorbed the PCNP
and other planning affiliates. It sought progress on all economic
fronts, following what economists called a balanced growth model,
which required heavy investments. It favored heavy industry,
electricity, irrigation, and land reclamation--a persistent pattern
since then.
Achievements were mixed: GDP grew at a rate close to the target
of 7 percent per annum, but other goals were not met. The lack of
macroeconomic coordination and implementation mechanisms, as well
as the projection of unrealistic targets are cited as reasons for
this failure. Furthermore, private-sector investment, which was
expected to play a key role, did not materialize, especially after
the wave of nationalization in the early 1960s.
A number of subsequent plans were never implemented. It is
indicative of the long hiatus in planning that the next plan was
also called the First Five-Year Plan (FY 1982-86). (To avoid
confusion, this plan is referred to as the 1980s First Five-Year
Plan, and the earlier one as the 1960s First Five-Year Plan). It
was seen as part of a long-term plan extending to the year 2002.
With this plan, the Ministry of Planning began to assume major
responsibility for the economic process.
The plan itself had the same thrust as that of the 1960s,
emphasizing heavy industry and electricity, and suffered similar
problems. Apart from improving the infrastructure, especially in
the metropolitan areas, its targets, including an annual GDP growth
rate of 8 percent, were seldom accomplished. Before its conclusion,
Egypt was feeling the heavy burden of external debt
(see Debt and Restructuring
, this ch.).
The latest plan, the Second Five-Year Plan (FY 1987-91),
promised continuity and change. The most prominent investment areas
were those of electricity and power, industry, public utilities,
irrigation, and land reclamation. It anticipated a GDP growth rate
of 5.8 percent per year, which in early 1990 it was already failing
to meet. Most noticeably, the plan envisaged that private-sector
investment would almost double to 39 percent of the total, from 23
percent in the previous plan. The increase was predicated upon an
assessment of the sector's outlays in the preceding plan, which
showed outlays as often surpassing targets, and upon the incentives
the government would offer. The government specified other plan
objectives, such as increased productivity, rather than added
capacity; a shift to exports rather than import substitution;
improvement of data gathering by spreading computer usage and
training census personnel; and redressing regional disparities
through investment in new and previously neglected regions.
Data as of December 1990
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