Structural Adjustment, Stabilization Policies and the Poor in Egypt


Structural Adjustment, Stabilization Policies and the Poor in Egypt


Karima Korayem



Cairo Papers in Social Science


Cairo Papers in Social Science


Structural adjustment and stabilization agreements between Egypt and the International Monetary Fund and the World Bank were signed in 1991. The two agreements are referred to as the economic reform and structural adjustment program (ERSAP). To examine the impact of ERSAP on Egypt's poor , one has to define, first, who are the poor and what is their relative share in the population. The negative impact of ERSAP on the society as a whole will be less harmful if absolute and relative poverty are small in Egypt. ERSAP affects the poor through three channels: prices, incomes, and the provision of social services (mainly education and health). However, not all policies have a direct impact on the poor. Three types of policies can be identified in this regard: first, macro-economic policies that affect variables that are included in the poverty equation, like wages, unemployment, and prices; second, policies that are specifically designed to support the incomes of the poor (transfer payments and the creation of employment opportunities); third, policies that affect the supply of subsidized social services, specifically education and health. The economic reform and structural adjustment program adopted in Egypt will be examined, and the impact of the three types of policies on the poor will be pointed out and analyzed. Although the poor are placed on the receiving end of ERSAP, they are adapting in one way or another to survive the hardship of poverty. Adaptation can take place through changing patterns of expenditure or incomes. Issues addressed in this study include how the poor adapt to the structural adjustment and stabilization policies applied in Egypt and what adaptation implies regarding the quality of life they are leading. Measures are proposed to reduce the negative impact of ERSAP implementation on the poor in Egypt. Following these introductory pages, this study falls into four parts. Chapter One discusses the incidence of povef!y in Egypt. Chapter Two explains the impact of the structural and stabilization policies on the poor. How are the poor adapting is presented in Chapter Three; and, finally, Chapter Four suggests ways to minimize the negative impact on the poor.



Publication Date

Winter 1996


American University in Cairo Press




poverty, policy, poor, stabilization, social services, income distribution


Cairo Papers in Social Science 18(4)

Structural Adjustment, Stabilization Policies and the Poor in Egypt