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Egypt stood at the dawn of industrialization when Nasser took power in early 1950's. She had about the same number of modernized industrial enterprises as Japan did just after World War I when Japan witnessed outstanding increase of modernized enterprises and was on the point of stepping into the age of heavy and chemical industry. Very roughly speaking, I dare say that Nasser's Egypt could be compared to this Japan on its eve of industrialization, although it is a little dangerous to say anything about industrialization simply on the basis of the number of modernised enterprises. The first development policy adopted by Nasser's government was import substitute industrialization policy. Today some people criticize this policy because NEES succeeded by adopting export oriented industrialization policy. But Egypt's adoption of import substitute industrialization policy at that time was quite normal and justifiable, for no one knew in those days about the export oriented industrialization policy and no one would have beleived in its effectiveness even if he had known about it. The failure of Nasser's development poicy, therefore, can not be attributed to his import substitute development policy, but should be attributed to other causes. Among several probable causes, the one already generally recognized was, what true that in most of the advanced countries except Great Britain, no doubt, states played more or less important roles so that they might catch up with Great Britain as soon as possible, but in these cases states helped entrepreneurs grow freely, while they suppressed mercilessly workers and other victims of industrialization in order to keep "social order", and, besides, states not only gave various subsidies to entrepreneurs but also undertook state investment in infrastructure to save entrepreneurs their necessary capital. Even that notorious dictatorship of Pak Chon Hi in Korea, economically, payed maximum attention to foster the private sector while it, politically, exercised the ruthless power to suppress resistance of the people. But Nasser's regime, regretably enough, restrained entrepreneurs of their free economic adtivities. At first, Nasser's regime was eyed with suspicion by the whole societsy. Someone regarded it as a military dictatorship of right wing army officers. Others expected it to standside by side with farmers and workers. In fact, Free Officers themselves didn't seem to have any united and concrete idea about future Egypt. So it was quite natural that Egyptian entrepreneurs, not to speak of foreign investors, hesitated to do new business at first. And at this juncture impatient Nasser made a bad choice. The regime did not try to gain the confidence among the businessmen but on the contrary it began to force them to work harder and to intervene in the management of private companies, thus making them keep away from economic activities in Egypt any more. Nasser's development policy went to the very end when it declared "Arab socialism". Apparently the national resources were effectively procured and allocated under the socialistic control and the industrialization was considerably achieved at least in the statistics. But the industrial equipment thus built worked ineffectively. Capital and labour productivities were very low. Besides, the expanding West market that was to nourish NEES later years was closed to Egypt, not bcause of its declaration of socialism but mainly because of poor quality of its products. As a result, Egypt was forced to rely upon the East market that was very narrow and didn't have the capacity to contribute to Egypt's industrialization not only as a consumer but also as a capital and technology supplier. Thus Egypt's industrialization program, even its economy itself, could not help standing still in late 1960's. The imposing edifice of factories apparently seemed to tell the success of Nasser's socialism but in reality it was a mere consumption of what Egyptian people had saved in the past for a long time-a fruitless consumption without bringing nearly no returns. The prescription for the disease was clear to write. Domestically, it was recovery of the freedom of economic activities, and externally, it was opening of its door towards the market, capital, and technology in the West. The necessity began to be felt already in the last stage of Nasser's regime and was even brought into realization though partly. Thus when Sadat succeeded Nasser, it was quite clear for him what to do. He adopted the open door policy, as every one knows, and even made peace with larael to mitigate the military burden. But, the objection against his policy, especially aginst the one towards Israel, was so strong and unanimous among th Middle Eastern peoples that, it seemed, he could hardly step forward as far as he really intended. The privatization of industry was retarded, the bureaucracy remained, and the nomenclatura continued to enjoy priviledges as be for. In short, Sadat's open door policy didn't work effectively and he was killed without accomplishing what he might intend, although no one knows exactly, today, whole of the idea that Sadat conceived. Nasser was a man of integrity, and a charismatic leader as well. But he went somewhat astray in the economic field in the very complicated postwar international situations. On the contrary, Sadat was a man of action, and an actual leader without any charismaticity. But he could see through the reality and carried out what he saw, which brought him a sudden death.
- 1992-03-31