ABSTRACT
In the late 1980s, a severe macroeconomic crisis struck the Egyptian economy, with an ever-widening budget deficit hitting a record of 20 per cent of the GDP in 1989 (Waterbury 1992). Inflation reached 30 per cent and public external debt approached 45 billion dollars. In 1989, the country was on the verge of declaring bankruptcy due its inability to service its public debt (Soliman 2005: 56). In 1991, a Structural Adjustment Programme (SAP) was adopted in collaboration with the IMF and the World Bank, accompanied with one of the largest, if not the largest, worldwide debt relief packages. In the period between 1990 and 1994, over 50 per cent of Egypt's foreign debt was cancelled, while the other half was rescheduled (Richards 1999).
