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Brain Drain and its Devastating Consequences as a Result of Egypt’s Economic Challenges


Egypt, a country with a rich history and a strategic geopolitical position, finds itself grappling with a complex economic situation that has significant implications for its political standing in the region. In this article, we delve into the multifaceted challenges facing Egypt, exploring the economic intricacies that hinder its ability to assert impactful political positions, examining the utilization of funds from the Gulf Cooperation Council (GCC), among other sources, questioning the rationale behind economic decisions, drawing historical parallels, and addressing the lingering effects of past events on the nation’s aspirations for an actual change.

The Economic Conundrum and its Political Ramifications

The current economic landscape of Egypt has rendered the nation incapable of taking serious and impactful political positions concerning events around its borders, particularly in Gaza. Economic instability often weakens a nation’s political influence, leaving Egypt in a precarious position as it navigates regional challenges. The correlation between economic strength and political assertiveness is evident, and Egypt’s current financial woes serve as a hindrance to its diplomatic efficacy.

GCC Funds and the Missed Opportunity for Economic Transformation

A significant contributing factor to Egypt’s economic challenges lies in the misallocation of funds, for example funds unquestionably and unconditionally granted by the states of  the Gulf Cooperation Council (GCC) after the collapse of the Muslim Brotherhood regime on July 3, 2013. While it is challenging to precisely verify the amount (reported to exceed $40 billion), the focus should shift from non-profit originating projects (such as the funds leaked to finance the excessive roads infrastructure and new administrative capital) to catalyzing a radical industrial revolution.

Egypt’s internal debt stands at EGP 6.86 trillion, while external debt reaches approximately USD 155 billion. These staggering figures emphasize the urgent need for a strategic economic overhaul to alleviate the burden on the nation’s financial resources.

Questioning Economic Decision-Making: A Pattern of Missteps

The perplexing nature of Egypt’s economic trajectory demands a closer examination, prompting a profound questioning of the integrity and rationale behind decision-making since 2014. Beyond the surface level, the persistence of what appears to be a pattern of missteps raises serious concerns, challenging our willingness to attribute each move to mere inadvertence.

In the realm of leadership, even those labeled as unprofessional or incompetent are expected to stumble upon successful decisions occasionally. It is the nature of governance to encompass both triumphs and setbacks. However, the conspicuous absence of these serendipitous turns in Egypt’s economic landscape begs a more critical analysis. The consistent string of seemingly misguided decisions compels us to venture beyond the realm of happenstance and question the actual and true motives guiding these choices, apart from any sugar coated public speeches or that Egypt is “a very …. very poor country” kind of statements.

Scrutinizing the decision-making processes becomes imperative. Is it a matter of flawed methodologies, an absence of comprehensive analysis, or an actual and deliberate misalignment with certain interests? The complexity of economic policy warrants a nuanced understanding, yet the apparent simplicity of repeated missteps challenges Egyptians’ confidence in the competence of those at the helm, particularly in view of the number of, let’s be charitable and say, mistakes.

The pressing question arises: What drives these decisions? Is there an underlying agenda, whether overt or covert, influencing the economic course of the nation? The stakes are high, and the repercussions of economic mismanagement extend far beyond balance sheets, impacting the lives of ordinary citizens and the nation’s standing in the global arena, or at least regionally.

The gravity of the situation necessitates a departure from perceiving these missteps as isolated incidents. It beckons us to view them as interconnected pieces of a larger puzzle, where each decision forms a crucial part of the overarching economic strategy, which directly targeting Egypt’s political and military weight. This strategy, or lack thereof, demands a comprehensive evaluation, not merely to assign blame but to uncover the root causes to try to rectify systemic deficiencies.

Echoes of History: Parallels with Ecuador, Indonesia, and Panama

A glance at history reveals a disconcerting pattern, mirroring situations in Ecuador, Indonesia, and Panama, where borrowed funds were announced to be utilized to enhance these countries’ infrastructure, while in reality it functioned as the noose that once suspended these nations until their demise.

While we hope to avoid the dire consequences faced by these nations, the repetition of economic mismanagement is cause for concern. The potential risk of occupying Egyptian lands is a grim possibility that should prompt immediate corrective actions.

Lingering Fears of January 25, 2011: A Barrier to Change

The fear stemming from the events of January 25, 2011, continues to cast a long shadow over Egypt’s aspirations for change. The memory of past upheavals serves as a formidable barrier, inhibiting the nation’s ability to envision and implement transformative reforms. Breaking free from this fear in a legal and democratic manner is imperative for any substantial progress.

Brain Drain and its Devastating Consequences

The consequences of the economic challenges faced by Egypt extend beyond its borders, leading to a significant brain drain. The reluctance of Egyptian expats to return coupled with the departure of well-educated individuals is creating a severe talent deficit. This brain leakage leaves the Egyptian market with suboptimal calibers, impeding the nation’s growth potential.

Concluding Remarks

In navigating the complex economic challenges, Egypt stands at a crossroads. Acknowledging the interconnectedness of economic stability and political influence is crucial for the nation’s resurgence. Urgent and strategic actions are needed to rectify economic missteps, overcome historical parallels, dispel lingering fears, and reverse the brain drain. Only through comprehensive reforms can Egypt break free from the shackles of its economic predicament and forge a path toward a more prosperous and influential future, on the economic front, as well as, on its diplomatic weight.

Ahmed Ibrahim – Managing Partner