The Relevance of the East-Asian Experience*

Conference was made possible through the generous contribution of th e European Commission. **The authors wish to thank the discussants, Dr. Heba Handoussa and Dr. John Page, for their valuable comments and suggestions. Dr. Mahmoud Abdel Fadil critically commented on the first draft of the paper and provided several thoughtful insights. Useful comments from participants in the conference are also acknowledged. This paper assesses Egypt's industrial strategy as embodied in its current economic reform and structural adjustment program (ERSAP) and appraises the role it implies for the state in light of the East Asian experience of industrialization. The argument for the lack of coherence in the industrial policies pursued over the past two decades in Egypt is presented on the basis of estimates of a Dutch Disease index for the manufacturing sector over the period 1959/60-1990/91, evidence on exchange rate, interest rate and real wage behaviour and some initial (theoretical and empirical) assessments of the effects of the current ERSAP. The results cast doubt on the sufficiency of the present mixture of policies in reversing the de-industrialization trend inherited from the oil-boom era and i