State, private industry and economic liberalization in Egypt

This thesis explores the relationship between private industrialists and the state in Egypt since 1974. What is the nature of the local bourgeoisie? How capable is the state and how far does the East-Asian model of benevolent state autonomy apply to the case of Egypt? How has the adoption of economic liberalization affected business state relations? To address these questions, the industrial sector is analyzed as a case study. The approach adopted here is that of political economy and involves a comparison across the last three decades. Based on developments in the industrial policy, the distribution of private investment, the institutional environment and the structure of the manufacturing sector, the study demonstrates that state capacity in Egypt is low and the fundamental division among the bourgeoisie is size-based. The state's autonomy has not contributed to its ability to direct and undergo structural transformation. Further, its accommodation of the business sector has not been accompanied by private sector growth since discriminatory incentives favouring large enterprises and the prevalence of a system of 'crony capitalism', have impeded smaller firms from access to the available opportunities. Indeed, the leaders of the business power center, who contribute most to private investment, have been maneuvered by the state to support the political status quo