Egypt’s Presidents and Their Contribution

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Table of Contents

Introduction
Evolution in the Egyptian Political system
Evolution in the Egyptian economic policy
Privatization
Customs legislations
Corporate tax
Evolution in the Egyptian economy
Conclusion
Reference List

Introduction

Leadership is the definite role assigned to each and every president/country. The most common and wrong presumption by most presidents is that since their job title puts them in a position of leadership, the individuals who work under them will automatically be subject to their every word. In actual sense, however, the title presidency is not necessarily directly linked to leadership. In order for effectiveness to be achieved in leadership, the person in charge must constantly ensure that his/her influence to the people subordinate to him/her is always positive and intended to achieve the unique goals of the country. Furthermore, it has been proven that the leadership style adopted can make make people in governmental control either excellent or terrible leaders.

This report is an analysis of the leadership Egypt’s three presidents. The contribution of leadership style of each of the presidents to the economy of the country shall be identified and then discussed in detail with an effort of isolating its strengths, and weaknesses. This report shall also draw parallels between the leadership style of each of the three presidents in the wake of economic policy changes.

Evolution in the Egyptian Political system

Egypt has been operating under the law of emergency for the past 43 years. Even though this law was supposed to have come to be amended by the 1980s, it has continually been extended to suit the needs of the state. The law strongly dictates the limits of all non-governmental activities and it has banned all forms of street demonstrations and the reception of unregistered financial donations (Bowker, 2010). However, with the entry of the new millennium, the radicals of the country have become bolder and have time and again trampled on these restrictions.

For instance, in the year 2003 all the independent democratic parties advocated for local democratic reforms with some of them categorically disputing the planned transfer of the presidency from Hosni Mubarak to his son Gamal Mubarak (Fahmy, 2002). Advocacy groups such as the Egyption Movement for Change (Kefaya) have also come around to completely reject the usage of violence by the government’s security agencies. When in it comes to issues affecting the local citizenry, peasant farmers have also come out to demand more openness when it comes to land issues and land reform (Fahmy, 2002). For instance, in 1997 the Nasser-era land reform policies touching fixed rents and the security of inherited land tenure were revoked after they were subjected to pressure from peasant activists (Bowker, 2010).

Gamal Abdel Nasser was one of the kingpins of the Free Officers rebellion group which strategized for taking over country leadership from the monarchy. In the year 1950, Nasser and his covert formation plotted a coup which would come to be known as the revolution (Fahmy, 2002). With the success of the upheaval, Mohamed Naguib was given the position of commander in chief while six other Free Officers leaders were appointed principles. The new authorities announced that their reign would be characterized by the end of occupation, feudalism and monopoly (Bowker, 2010). The principles also declared that they would aim at curtailing social injustices coupled with making efforts towards the democratization of Egypt.

In 1953 the monarchy was abolished and Mohamed Naguib declared president and Gamal Abdel Nasser was crowned prime minister. The Free Officers executive was renamed the RCC and leadership came with promises of agrarian reforms (Bowker, 2010). There was more liberalism as disbanded groups such as the Moslem Brotherhood were allowed to partake in their non-political activities. Even though the leadership of the RCC was smooth in the earlier days, there was constant wrangling between the top leaders Gamal Abdel Nasser and Mohamed Naguib leading to the 1955 overthrowing of Naguib by Nasser who was officially elected president leading to a disbandment of the RCC. Nasser’s leadership led to an abolition of the martial law and censorship (Fahmy, 2002).

In 1956 Nasser nationalized the Suez Canal with an aim of using the revenues obtained in building the Aswan High Dam. This move angered both Britain and France with the two countries leading attacks in the Canal. The Security Council was however pressured to call for the withdrawal of the French and British armies from the region leaving Abdel Nasser to be seen as a hero (Fahmy, 2002). This is because both the Soviet Union and the United States opposed the British, French and Israeli actions.

After Abdel Nasser’s death in 1970, his vice president Anwar El-Sadat took over as president of Egypt (Bowker, 2010). He was confirmed as president by a referendum in 1970. His entry into state leadership was marked by attempts to overthrow him by some political opponent. Being members of his cabinet, he managed to come up with a strategy termed as the corrective revolution and which he used to expel them from government (Fahmy, 2002).

El-Sadat’s political strategy was to win the approval of the masses by capturing neighboring territories. To this end, he managed to secure arms from the Soviet Union and in 1973 he combined forces with Syria to attack Israel. The plot was initially successful but soon military aid was dispatched to Israel from America leading to a retreat of El-Sadat’s troops (Bowker, 2010). The following year a disengagement treaty was signed which gave Egypt a narrow strip along the Suez Canal. This victory was seen as Egypt’s way of regaining national pride and it gave Sadat the green light to carry on with his strategy of economic reform.

Sadat’s reign came with the open-door economic policy which unfortunately only served to widen the gap between the rich and the poor. This was because it encouraged more importing of products as compared to the usage of locally manufactured goods. Consequently inflation rates soared and the country had to depend on aid from the USA (Fahmy, 2002).

In 1976, a bill for the formation of independent parties was signed into law and this marked the beginning of multiparty politics in Egypt. In the same year a referendum was held and Sadat retained his presidency. Seeing the economic challenges plaguing his country, he held talks with International Monetary Fund and he was forced by the institution to do away with all the subsidies (Bowker, 2010). The economic struggles coupled with the removal of subsidies led to protests by the citizens- demonstrations which were marked by several deaths and injuries to scores of people. Sadat was forced to come up with a new economic strategy. In 1978, Sadat held talks with Israel and a peace deal was signed between the two countries. This move angered most of Egypt’s Arabic allies leading to Sadat’s assassination in 1981 (Bowker, 2010).

Following Sadat’s death, his vice president Hosni Mubarak took over after a formal election. Mubarak promised to continue with Sadat’s peaceful legacy and he started on this path by releasing political captives that had been imprisoned by his predecessor (Bowker, 2010). Mubarak strived to ensure peaceful relations with the USA, the Soviet Union and other Arab states. As far as the economy was concerned, Mubarak initiated economic reforms and it was during his early years in office that Egyptians began to appreciate the freedom of expression especially through guarantees of press freedom (Fahmy, 2002). One factor that has contributed to his political supremacy is the setting up of a privatization scheme as a way of getting the economy back on the growth track.

Of the Egyptian president’s Mubarak has been the one who has made conscious efforts to ensure peaceful relations with other nations. He for instance actively contributed to the peace talks between Palestine and Israel and he also came out to speak against the September 11^th 2001 attacks on the United States (Fahmy, 2002). His popularity with the people has also reflected well on his political career judging from his constant reelection with landslide wins (Bowker, 2010). This is however despite the fact that most people think that elections in Egypt are neither free nor fair.

Evolution in the Egyptian economic policy

The Egyptian economy has in recent days grown from strength to strength owing to reforms in the country’s economic policy. The actual changes began during the first half of the 1990s with the initiators of the change working towards the attainment of a free market economy. The strategy has yielded positive results with Egypt’s inflation going down to as low as 3% (Harik and Naguib, 2006). The country’s budget has also witnessed a significant deficit reduction. With the government not being able to comfortable hire all the college graduates, the Egyptian labor force has gradually been encouraged to be entrepreneurial.

The economic policy currently in place in the country has been designed to encourage private investment as well as the competitiveness of locally made products (Harik and Naguib, 2006). When Hosni Mubarak took over he made a promise to ensure that the employment rate went up as well as to increase the Gross Domestic Product. As a matter of fact, one of the items on his campaign manifestos is to grow the economy to such a level whereby all the country’s income is well shared among the citizenry. This is a concept borrowed from the developing world where the governments exercise minimal control in matters pertaining to the economic logistics with an aim of promoting individual growth which compounds to make the country economy grow even further (Harik and Naguib, 2006).

Another element of the economic policy that has contributed to Egypt’s growth spurt is the modification of the state’s incentive system. This has been done in order to encourage the citizens to go for entrepreneurship after successfully completing their education as opposed to seeing employment (Harik and Naguib, 2006). The economic policy reform in Egypt touched on a number of areas including privatization, custom legislation, and the corporate tax system. The reasons for changes in these three regions have been briefly described below:

Privatization

While coming up with economic reform strategies, the government’s main target was creating an appeal to and retaining both local foreign investment (Harik and Naguib, 2006). This has been achieved through maintaining activity in the stock market as well as coming up with innovative ways of handling the public business sector such that it can incorporate the input of the private business. Consequently, an increase has been reported as far as remittances are concerned with most of the monies sent back being used to fund new investments.

Customs legislations

When it came to custom legislations, the reforms came about in order to reduce commodity prices and make tariff structure even more simplified (Harik and Naguib, 2006). To this end, the state brought in policies that encouraged export trade through a reduction in the duties charged at the borders particularly on spare parts and capital products. The reforms also strived at getting trade in the local market operational by dealing with all disputes relating to tariff categorization. The number of different tariff categorizations were reduced from 36 to five (Harik and Naguib, 2006).

Corporate tax

As far as the corporate tax setup is concerned, the reforms were mainly structured to ensure that fairness was maintained in the taxation system (Harik and Naguib, 2006). Hosni Mubarak’s government has been particularly keen on this element of reforms which has resulted in the promotion of investment as well as keeping down the cost of technology transfer.

Evolution in the Egyptian economy

Once the revolution began in Egypt the regime that brought in the changes started giving more priority to the economic development than its predecessor. The growth of the economy has been a prime area of focus for the government over the years. The Egyptian economy has been on a stable growth path since the revolutionary regime took over though on occasion some slight fluctuations have been experienced (Kienle, 2001). Egypt has had more than slight fluctuations. These periods of instability in the economy coupled with difficulty in accessing statistical data makes analysis of the economic growth a challenge.

The figures to illustrate economic progress released by one section of government are more often than not subjected to disputes and experts have always concluded that the estimates are greatly skewed owing to the informal nature of the economy as well as the lack of proper structures for collecting workers remittances (Kienle, 2001). It is estimated that between 1955 and 1975 the Egyptian economy underwent a steady Gross Domestic Product (GDP) growth rate of over four percent. With the population at the time growing at 2.5 percent, the economy had grown over 1.7 times the population.

In the years between 1967-1974, during the sunset years of Gamal Abdul Nasser’s reign and the ushering in of Anwar Sadat’s presidency, the economy grew at an average rate of approximately 3.3 percent (Kienle, 2001). This slow down in was occasioned by a number of factors top on the list being a stagnation of agricultural and industrial production linked to the June 1967 war (Kienle, 2001). During this period of instability all the investments which had contributed to earlier economic growth in both the agricultural and industrial sectors went through a period of instability.

However, in 1975, the economy went through a dramatic rise occasioned by a sudden increase in oil prices two years earlier. Egypt, like other nations in the Middle East, reaped heavily from the oil boom of the1975 to 1980 with the annual GDP peaking at 11% in 1980 (Kienle, 2001). However, Egypt later suffered a setback from the same oil trade in the mid 80s when the oil prices crashed between 1985 and 1986. During this period, the annual economic growth rate did not go beyond 2.9 percent. The investment ratio also dropped to 22 percent in 1987, down from 30percent in 1985 (Kienle, 2001).

A graph showing Egypt’s per capita income between 1980 and 2005 (Source: IMF World Economic outlook database)

After the Second World War the Egyptian economy went through intense diversification. In the early 1950s agriculture contributed approximately 30 percent to the GDP, the industrial sector was approximately 15 percent while the services industry was in the region of 53percent (Kienle, 2001). This diversification was necessitated by a decline in the contribution of agriculture to the economy and a rapid growth of the industrial sector as well as government services.

The decline in agricultural contribution to the GDP continued all through the 1960s-1970s stabilizing at an all time low of 15 percent in the 1980s (Kienle, 2001). During this period, the Gross National Product (GNP) contribution of the industrial sector went up as occasioned by the growth of the electric grid and the setting up of oil rigs. In the mid to late 1980s and the early 1990s the manufacturing sector in Egypt failed to impress causing the country to be entirely dependent on oil export and outside financing (Kienle, 2001).

Egypt’s sectoral contribution to the GDP in the period 2008/2009 (Source: Central Bank of Egypt)

As the agricultural and industrial sectors were going through periods of fluctuation, the service industry maintained a stable ascent particularly because of the government’s clarion call to guarantee jobs to all university graduates. This was the trend under Sadat’s reign but due to saturation, recruitment of graduates became an impossibility when Hosni Mubarak took over owing to the inability of the state to financially fund this venture (Kienle, 2001). However after the 1990s and turning into the twenty first century, the government’s move to encourage service in the public industry became an impediment to growth as the payment of civil servants competed for funds with state investments (Kienle, 2001). In this regard the state could not afford to hire more civil servants and the guaranteeing of public sector jobs to college graduates declined.

Conclusion

This essay has analyzed both the political and structural leadership strategies of Egypt’s three presidents in the light of the country’s economic development. It has been well established that the transformational leadership style embraced by Mubarak and Nasser is best suited for the type of economic activities that the country is involved in. This strategy should therefore be maintained even in the wake of the paradigm shift facing the country. The report has elaborated on the various features of the strategies adopted by all the three presidents, using extensive literature drawing from the works of various scholars. In conclusion, it is important to note that a strategy that works for the economy of a country such as the one adopted by Mubarak and Nasser should be reinforced as opposed to being abandoned due to the current transformational changes facing the country.

Reference List

Bowker, R. (2010). Egypt and the Politics of Change in the Arab Middle East. Cheltenham: Edward Elgar Publishing.

Fahmy, N.S. (2002).The politics of Egypt: state-society relationship. London: Routledge.

Harik, I & Naguib, A. (2006). Economic Policy reform in Egypt. Cairo: American University in Cairo Press.

Kienle, E. (2001). A grand delusion: democracy and economic reform in Egypt. London: I.B.Tauris.

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