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Published online by Cambridge University Press: 29 January 2009
During the 1960–1972 period Egypt was committed to a socialist, centrally planned model of economic development. Economic growth goals were expounded in optimistic consecutive five-year plans. When it became apparent that these goals would not be achieved, the second five-year plan was expanded to seven years (1965–1972). private investment had been effectively discouraged after the nationalization of privately owned industry during 1960–1963. In order to finance ambitious development plans, Egypt borrowed heavily during 1960–1972. Approximately $2.3 billion was borrowed mainly from the U.S.S.R., the European Economic Community, and the United States. The plans' large capital development projects were undertaken with dismal results. A major factor causing these failures was the low absorptive capacity of Egypt during that time. This severely restricted the amount of capital that could be put to constructive use in any given time period and prevented Egypt from realizing her goal of doubling national income in ten years (1960–1970).
Author's note: I wish to thank Professor Ramon Knaurhause for his helpful comments. Any errors are, of course, my own.Google Scholar
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