Experiments in economic reform have been seen in a number of countries over the last 25 years. In some cases the experiments achieved impressive results, while in many others they failed. Somewhere in between lies a third group of countries, those which made significant headway at first only to suffer setbacks further down the road.

In my opinion the experiments which succeeded—and sustained their momentum—were those which did not address the process of reform from a purely economic perspective. After all, economic ideas, systems, structures and mechanisms (usually the creation of economists—who are usually academicians) cannot in and of themselves guarantee consistent and sustained success. Certainly the economists play a vital role, for without them the process of economic reform cannot be initiated in the first place: it is they who determine the framework for monetary reform followed by economic reform. But this represents only the first stage.

To better illustrate this point, let us draw a parallel here between the first stage of economic reform and the construction of a state-of-the-art sports complex. Once the sports complex has been built and fitted out in accordance with the required specifications, the role of the architect and contractor ends and that of the managers, administrators and players begins. However well designed such a complex may be, it cannot in itself guarantee a brilliant record of achievement. So, too, the planning of monetary and economic reform. Though a vital and indispensable element of any reform program, the planning (admittedly a difficult and complex task) is merely the first stage in a longer process. In the next stage the economists must stand back to allow the managers, administrators—and players—to take over

In fact, the reason behind the failure of some economic reform programs is that they remained under the control of the economists-academicians longer than they should have done. Conversely, the experiments which enjoyed the highest and most consistent rate of success are those in which the planners handed over the reins of control at the right time to a cadre of dynamic, talented and qualified management executives who then implemented the reforms.

As to the countries whose economic reform programs got off to a good start but faltered later, I believe this was due to the absence of clear lines of demarcation between the role of the economists as planners and that of the cadre of top management executives who are required to put the program into effect. The overlapping of the two roles beyond the take-off stage caused some economic reform programs to suffer the setbacks and reversals which they did, though in some cases these have been depicted as far worse than they really were. For example, the setback faced by the Asian Tigers⁴⁴ after the initial brilliant success of their economic reform programs, though serious, was not devastating. In fact, many of them were expected to overcome the crisis before the millennium. They can draw on the inspiring experience of Mexico, which made a complete recovery from its economic crisis thanks to its excellent cadre of administrators and management executives.

My view then is that prolonging the stage of monetary and economic reform in which academe-oriented economists are in the driver’s seat can lead to many problems and reversals. Once the initial phase has begun, the focus must shift from the structural aspect of monetary and economic reform to the practical aspects of administration, modern management systems, marketing strategies and human resources, with particular emphasis on the cadre of leaders in the field of executive management, including the field of marketing, arguably the most important area of modern economic life.

Shifting the focus from the planning stage to the execution stage is extremely difficult and usually involves a power struggle, possibly an all-out showdown, between the adherents of different schools of thought: one whose experience lies in the past and the other which has its eye on the future. There is no doubt that a speedy resolution of the conflict in favor of the modern school is one of the keys to sustainable economic success that is less susceptible to setbacks and regressions.

Let us try to assess where Egypt’s experiment with monetary and economic reform stands in relation to this theoretical buildup. Certain developments are worth noting here:

Since the early 1990s tremendous progress has been achieved in Egypt in the field of monetary reform. Many of the targeted objectives have been reached and, in general, things are moving in the right direction.

The same period witnessed concerted efforts in the direction of economic reform, but much remains to be done. Of particular importance in this respect is the need for a reassessment of the role of the state in economic life: the state necessarily plays a role when it comes to vision and policies but should be far less assertive in most areas of economic activity. Equally important is the need to dismantle the grossly inflated and ponderous Egyptian bureaucracy that continues to choke most government departments and is a major disincentive for international investments and capital to flow into Egypt in the required volume.

It has become imperative to focus on three priorities in the area of economic reform: 1. aspects of modern management systems, including the selection of executive leaders; 2. human resources, training and the transfer of technology and skills; and 3. the marketing sciences and the executive leaders in those areas, without whom all the efforts in the industrial and services sectors would be wasted. This important reorientation entails a transition from the stage of the academic economists (the planners) to that of the modern management executives, for it is they who will turn all the great efforts at monetary and economic reform into concrete results—i.e., increased production—in both the manufacturing and services sectors.

Finally, the long-term sustainability of reform programs can only be guaranteed if a number of basic principles are observed. The economic reform experiments which achieved the highest rate of sustained success are those which believed that the private sector should play a pivotal role in economic life and that the views of the business sector should be taken into account without, however, allowing that sector to actively participate in the policy-making process. For here arises the danger of conflict of interests: business people by their very nature have only short-term or, at best, medium-term interests, while those concerning society must be long-term. This makes it imperative to have another level, a contemporary political cadre, which might comprise top management executives but certainly not businessmen, that can strike a balance between the short- and long-term interests.