Egypt’s history of development shares some similarities with China and India. Since the 1950s, all three countries have followed similar development models that emphasize the primacy of the state’s role, public ownership, and exclusion from the global market. This policy was successfully abandoned by China and India, which marked the start of their current economic revival. Egypt has been working hard to break away from this model ever since it adopted a policy of economic openness in the 1970s, but it is still attempting to carve out its own path for a global economic revival akin to that experienced by China and India.
China and India’s economic renaissance began late: China began in 1979, while India did so in 1992, a little less than 15 years later. The world was rapidly moving towards economic globalization and open markets, making this a fantastic window of opportunity for the two countries because it removed many of the obstacles that had previously prevented investments from flowing into either country or exports from leaving.
At this point, the wealthy, developed West had advanced to a stage of extreme wealth and prosperity and had also entered a phase of intense consumer demand. Technology had also advanced significantly in the West. Given the high cost of labor and high wages, it was preferable for Westerners to concentrate on producing high-tech, high-value goods that matched their expensive, highly skilled labor forces, while the production of goods with a low technological component was moved to countries with an abundance of cheap labor.
China in particular reaped the benefits of this rare opportunity, and it was accompanied by a number of other countries that launched economic renaissances around the same time, most notably Vietnam. As for us in Egypt, we were unable to capitalize on this opportunity because our investment conditions were insufficiently alluring to the foreign investor, as the bureaucratic red tape was extensive, illegal payments were frequent, and Egypt’s labor force was neither the most qualified, the most disciplined, nor the least expensive, let alone the numerous rent-seeking and high-return service activities, starting with the high cost of taxis and other forms of transportation and street parking, and the availability of jobs in the Gulf with high pay, which made working in industry a losing proposition for many Egyptians.
India’s economic renaissance started in the first half of the 1990s, when trade restrictions were loosened, markets were opened up, and procedures for foreign investment were made easier. At that time, the Internet was rapidly taking over the world, and for the first time, it was possible to outsource the delivery of cross-border computing, accounting, and customer service services.
The turn of the millennium was rapidly approaching, and there was apprehension about the impact on computer systems and programs. A thorough examination of hundreds of thousands of applications and software was required, which was a costly process if it was carried out relying on the expensive technical labor in Western countries. In this regard, India stood out because of the country’s large pool of qualified, reasonably priced graduates in fields like computer science, mathematics, accounting, and communications. This signaled the start of India’s rise to prominence as a major force in the outsourcing, networking, and software industries. This was another opportunity we missed because our communication systems were inadequate; it was difficult to obtain Internet service despite its inefficiency, and a special permit was required to travel with a CD containing digital data.
We awoke a decade later. Beginning in 2004, we started to make it easier to access the Internet and to meet the requirements for outsourcing services. However, we came in too late in a market where the giants had already made a name for themselves, so we accepted the crumbs.
Both China and India were aware of the changes taking place in the economies of the developed countries, the core of the international economic system, and looked for gaps in the market they could fill by providing services demanded by the West. China met the demand for low-cost consumer goods in the West, and India benefited from the demand for experts with advanced knowledge in the developing information technology services sector as well as from the need for tens of thousands of low-cost jobs.
The Indian educational system was able to meet this demand by turning out skilled software engineers and thousands of graduates who can work in call centers to assist clients who are located in distant countries across oceans. Millions of Chinese and Indians who live and work abroad played a significant role in this development strategy, not only through remittances but also through the investments and innovations they brought, as well as by connecting the Indian and Chinese markets with the global market through businesses, professionals, and financial institutions. These immigrants have opened up crucial channels for luring foreign investment, transferring technology, and connecting with customers in wealthy western markets, accelerating the rate of growth in both countries.
China and India concentrated on seizing the opportunities provided by the Western economy, while Egypt concentrated on seizing the opportunities provided by the Gulf economies. The wealthy Gulf does not, however, require low-cost Egyptian producers because they already pay top dollar for name brands, nor is there a technology sector there that would employ Egyptian software developers. Instead, funds are looking for opulent real estate havens in which to invest and save money. Egypt concentrated on seizing the real estate opportunity the Gulf offered, which led to a real estate revolution and a significant urban renaissance, but industry and technology are still looking for an opportunity.
