Egypt's long-term economic recovery plan stalls

The Egyptian government’s failure to revive the country’s ailing economy is likely to be a defining issue in parliamentary elections expected to begin in October. The umbrella opposition group, the National Salvation Front, has heaped criticism on President Mohammed Morsi’s administration, accusing it of poor economic stewardship, lack of vision and inability to improve life for millions living below the poverty line.

Gehad el-Haddad, one of the top Brotherhood officials charged with developing a long-term economic recovery program, conceded in an interview that progress on major elements of the plan, known as the Renaissance Project, or Al Nahda in Arabic, had stalled. He blamed a combination of government bureaucracy and internal conflicts.

The Renaissance Project envisioned an ambitious transformation of Egypt’s economy from one that relied on rentier capitalism — which is largely based on income from various forms of property — into a productive, value-added economy that would contribute to society, according to a description of the project’s main features on the Web site of the Freedom and Justice Party, the political arm of the Muslim Brotherhood. This was expected to lead to a gross domestic product of 6.5 percent or 7 percent in five years, though how this growth rate would be reached was unclear.

The project also aimed to reduce Egypt’s unemployment rate by 5 percent a year and increase the budget for education to 5.2 percent of G.D.P. from 3.3 percent.

Instead, Egypt’s jobless rate has risen to almost 13 percent in two years, from 9 percent, economic growth has slowed to 2 percent, from about 5.5 percent, and there are very few moves being made to restructure budget allocations.

“We miscalculated the power of the bureaucracy beast,” said Mr. Haddad, one of a team of five executives in charge of the project.