Mohamed El-Erian: Egypt had a ‘heart attack’

Mohamed El-Erian, chief economic advisor at Allianz, said Saturday that Egypt's economy had been impressively revived after a shock that he likened to having a "heart attack."

"Egypt is on a fundamental economic transformation voyage…it has chronically underperformed," he said on a panel at the Egypt Economic Development Conference (EEDC) in the holiday resort of Sharm el-Sheikh.

Mohamed El-Erian
Joshua Roberts | Bloomberg | Getty Images
Mohamed El-Erian

El-Erian, who has Egyptian roots, said the country was on a "fundamental economic transformation voyage." He said he saw huge opportunities for the country, highlighting its talent pool and favorable demographics.

There is cause for hope, as the country now has the right macroeconomic framework, the right social objectives and has worked on lowering bureaucracy and government subsides, he added.

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"If we do all this, Egypt's economy will be completely transformed," El-Erian added, but admitted that some people were less confident about implementation and whether ambitious reforms would be undertaken.

He said that fellow Gulf states, like Saudi Arabia and Kuwait, had been the "first movers" for investing in Egypt, followed by global investors, with the stock market surging in 2014. El-Erian added that he expected more global companies to come to Egypt's shores as its economic development progresses.

Egypt, a country of 90 million, has experienced a tumultuous four years. In 2011, the country was plunged into mayhem during the Arab Spring uprising, which saw former Egyptian President Hosni Mubarak ousted from power. Mubarak was replaced by Mohamed Morsi, a leading member of the now-banned Muslim Brotherhood organization.

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Morsi was later ousted by the Egyptian military in 2013 after increasing complaints from secular Egyptians about Morsi's perceived restrictive and religious policies.

Abdel Fattah el-Sisi was the head of Egypt's armed forces at the time; in June 2014, he won the subsequent presidential election.

The EEDC this weekend is an attempt to put Egypt back on the world map for investors and trumpet its reforms which have coincided with improving economic data. However, the Tahrir Institute for Middle East Policy (TIMEP), a nonpartisan and nonprofit organization, warned that the EEDC seemed "increasingly disconnected from reality."

"(It) may run the risk to simply disappoint, even if it is deemed successful by any reasonable standards," Mohamed El Dahshan, a senior cooperation officer at the African Development Bank, said in a blog post on the institute's website Friday.