State and Entrepreneurs in Egypt: Economic Development since 1805 by Naiem A. Sherbiny, Omaima Hatem (review)

This book is an economic and business history project that aims at charting the relation between the Egyptian state and the local entrepreneurial elite over the course of two centuries, from 1805 until 2014. The authors are practitioners in finance, private business, international economic organizations, and more. They follow the patterns of relations that existed between the state and entrepreneurs under Muhammad Ali Pasha in the early 1800s, Khedives Ismail in the mid-1800s, British colonialism between 1882 and 1952, and consecutive military presidents from 1952 until 2011. The first chapter of the book lays out in detail theoretical insights into state and entrepreneurs at large in international literature. The authors then move in the second and third chapters to cover chronologically the Egyptian state’s changing policies regarding private business. Chapter Four attempts to closely describe various business owners and their reactions to these policies. Finally, the last chapter presents recommendations to the current Egyptian state about reforming its relation with private business.

The authors identify seven “modalities” of the relation between the Egyptian state and local or foreign entrepreneurs over 200 years. In the authors’ words, these modalities are: Muhammad Ali’s centralized power for industrialization by employing foreign experts; Khedive Ismail’s development by using foreign investment and attracting European capital; British colonial administration’s fiscal reform and “selective interventionism”; “the Liberal Age” from the 1920s through 1940s that was marked by the rise of national entrepreneurs who benefited from the government’s economic and political reforms; “Nasser’s brutal command” practiced through nationalization of native and foreign business and applying socialism; Sadat’s re-opening of the market and empowering the business elite through the infitah policy; “Mubarak’s pro-business initiatives” through International Money Fund-designed neoliberal policies. All described modalities involve a degree of government interventionism (see Table 2.2 and p. 71). The book finally advises the current Egyptian president, al-Sisi, to carry on with Mubarak’s model of economic liberalization in accordance with the IMF recommendations.

For the historical period between 1805 and the 1960s, the authors mainly relied on secondary sources published in English. No archival records or primary documents were used—the type of sources that are essential to trained economic historians. Most of the secondary sources are relatively old publications in the field rather than recent research that came out in the past two decades. They also relied on publications of the World Bank, the IMF, and USAID—which carry their own neoliberal biases in evaluating the Egyptian state and economy. Thus, the ideological orientations of the authors come across clearly in the text. They adhere to the neoliberal dicta and recommend the current Egyptian government to adopt them. The authors do not carefully scrutinize the fact that the side effects of the market economy, such as business cronyism and social disparities, were the main reasons behind the 2011 uprisings and the fall of Mubarak. Moreover, the book’s authors convey another unmistaken political bias of favoring the monarchical and colonial period of Egyptian modern history over the post-colonial decades. They do not present necessary economic figures and statistics to justify such subjective orientation.

The limited sources and ideological biases of the book are particularly reflected in its coverage of the periods of Muhammad Ali Pasha and Nasser. For Muhammad Ali’s period (1805–1848), the authors describe him as “the ultimate entrepreneur” because his state initiated numerous modern factories using the help of foreign experts (p. 35). While economic historians classify the Pasha’s policies as state capitalism led by government intensive intervention and protectionism, the authors do not use these scholarly terms, but instead commend the Pasha as a “sole industrial entrepreneur” who enjoyed a monopolistic status (p. 37). The authors make no references to the fact that he employed forced labor corvée in building the infrastructure...