In fact, classical economics are harmful to the economic development of a country such as Egypt. The perpetual problem of laissez-faire economic management has been how to stimulate supply. This entails encouraging economic actors to engage their intellectual capabilities and creative faculties with a view to obtaining the best possible product for the lowest possible price, on the condition that the product in question contributes to improving quality of life. Egypt has the lowest ratio of personal savings to GDP among all middle-income countries, due to compulsive consumption habits. We also have astounding discrepancies in our wage structure and our occupational skills structure.
Development is a process that requires a brilliant formula.
The problem in Egypt is that the necessary chemical reactions are inhibited by a rigid patriarchal political system that excludes participation. In addition, we have yet to come up with the theoretical framework that must underpin the brass tacks of development. The liquidity crunch reached a peak last summer when there was a serious shortage of dollars in the market and the exchange rate shot up from LE3.40 to as high as LE3.60. In business and political circles, the ongoing dispute ranges from allegations that the CBE mismanaged the crisis to accusations that the government interfered in CBE's operations. A banking source said that it was the overriding of the demands of the market by political directives from the cabinet, and the government's reluctance to give free rein to the CBE to manage the currency crisis as it saw fit which aggravated the problem.