Product Code Database
Infitah (, ), or Law 43 of 1974, was Egyptian president Anwar Sadat's policy of "opening the door" to private investment in Egypt in the years after the 1973 October War (Yom Kippur War) with Israel. Infitah was accompanied by a break with longtime ally and aid-giver the USSR—which was replaced by the United States—and by a peace process with Israel, symbolized by Sadat's dramatic flight to Jerusalem in 1977. Infitah ended the domination of Egypt's Economic system by the public sector and encouraged both domestic and foreign investment in the private sector. Infitah was later adopted by other countries in the 1970s and 1980s.
The Egyptian Army crossed the Suez canal in the October 1973 Yom Kippur War. Despite the inconclusive outcome, many saw the crossing as a political victory for its initial successes.Loyola, Mario (7 October 2013). "How We Used to Do It – American diplomacy in the Yom Kippur War". National Review. p. 1. Retrieved 2 December 2013. It gave Sadat the prestige to initiate a major reversal of Gamal Abdel Nasser's policies.
Yet the oil crisis of the 1970s provided a huge influx of capital to oil-producing states along the Gulf, like Kuwait, Saudi Arabia, and Iraq. Roger Owen highlights how total revenues from these states went from $9.3 billion in 1972, the year before the embargo, to $170.7 billion in 1980. Samih Farsoun highlights how these reserves created a dynamic where oil-rich states, in need of leveraging this newly-found capital to invest in a wide variety of projects, would provide capital into oil-poor states for their migrant labor. By the 1970s, critics believed that Egypt's economy, with its large public sector, had evolved into a "Soviet Union-style system" of "inefficiency, suffocating bureaucracy, and waste." These factors, in turn, encouraged Sadat and later others like Sudan, North Yemen, Syria, and Iraq, to prioritize drawing in capital and thus, abandon the Eastern bloc to gravitate towards the Western bloc.
Sadat also wanted to turn Egypt away from its focus on war with Israel and devotion of resources to a large military establishment. He believed that capitalism economic policies would build a substantial private sector and that alliance with the United States and the Western world would lead to prosperity ( rakhaa رخاء) and eventually democratic pluralism.Tarek Osman, Egypt on the Brink, p.65 Sudan, North Yemen, Syria, and Iraq later introduced similar infitah reforms like in Egypt.
According to author Tarek Osman,
"Infitah's main fault was that it was over ambitious. It failed to recognize the complexities of Egypt's socio-economic conditions ... It ignored the limitations of the country's administrative system and the power of the military establishment ... the mismatch between the skills of the Egyptian middle class and the various economic opportunities springing up as a result. . . . As such, it was an unrealistically rapid developmental program that was doomed to fail."Tarek Osman, Egypt on the Brink, p.125
In 1977, negative public reaction to Infitah policies led to massive spontaneous riots involving hundreds of thousands of Egyptians when the state announced that it was retiring subsidies on basic foodstuffs. On 6 October 1981, Sadat was assassinated during a military parade in Cairo.
|
|
