The Egyptian academic Amr Adly has won the 2021 Roger Owen Book Award for his analysis of Egypt’s failed economic liberalisation strategies.
His research covers the period from the 1970s to the revolution that toppled former president Hosni Mubarak in 2011.
Adly’s book, “Cleft Capitalism: The Social Origins of Failed Market Making in Egypt”, was published by the Stanford University Press in 2020. An Arabic translation is planned soon.
Adly examines the reasons for the “relative failure to establish a market-based development model in Egypt.” Rather than focusing on corruption or “crony capitalism”, he looks at obstacles to the growth of small and middle-size firms.
In a phone call, Adly told Al-Fanar Media: “Egypt’s capitalist transition that started in the 1970s resulted in political, economic and social dilemmas. It neither included many social sectors, nor created enough or highly productive jobs.”
The Roger Owen Book Award is named after the former director of Harvard University’s Center for Middle Eastern Studies, who died in 2018. The prize is given every two years by the Middle East Studies Association of North America.
The Missing Middle
Air Adly has a Ph.D. in political economy from the European University Institute in Florence, Italy. He is now an assistant professor of political economy at the American University in Cairo.
“Egypt’s capitalist transition that started in the 1970s resulted in political, economic and social dilemmas. It neither included many social sectors, nor created enough or highly productive jobs.”Amr Adly
He was formerly a non-resident scholar at the Carnegie Middle East Center, and a project manager at the Center of Democracy, Development, and the Rule of Law at Stanford University, where he was a postdoctoral fellow.
In his latest book, Adly argues that the “missing middle” between small and medium enterprises produced what he calls “cleft capitalism”.
The idea came to him in 2013 when he was working on a report at Stanford University about the private sector in Egypt and Tunisia.
He saw a need to examine the field in a more comprehensive manner, over several decades, from a social and political economic perspective.
“The book also reviews the role of official and unofficial regulations that govern the work of private sector enterprises, such as obtaining financing or access to land,” Adly said.
Such rules are the result of this capitalist transition, he added. But they inhibit the growth of medium or small companies by denying them access to physical capital, like a plot of land, or cash capital, like bank financing.
Social Obstacles to Growth
Adly believes that social factors, such as the role of families, and the relations of major capitalist representatives with the state, also interfere in the operation of the rules that govern the work of private sector institutions. During the transition towards the market system, these factors produced a small group working in capital-intensive fields, he said.
Contrary to the dominant political economy theories, which attribute the crisis of Egypt’s development model to corruption or “crony capitalism”, Adly’s novel argument offers another answer.
“The prevailing view of the development problem in the Global South is about institutional corruption,” he said.
“However, the book identifies causes related to production and accumulation, and the capitalism gap, such as the inability of small businesses to transform into medium or large enterprises.”
He pointed out that small and medium enterprises have played an important role in capitalist development in countries such as China and South Korea by scaling up to become important job creators.
“The prevailing view of the development problem in the Global South is about institutional corruption. However, the book identifies causes related to production and accumulation, and the capitalism gap.”Amr Adly
Searching for Causes
Adly said there was “a need for institutions and institutional arrangements that link the state and the broader base of private enterprises.” These would “help provide bank financing and access to land for these segments that face a financing crisis, (thus) preventing their growth to the level of medium and small enterprises,” he said.
“This requires a degree of representation for these segments, and new institutions in light of the inability of the current institutions to face the crisis through earlier launched initiatives.”
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Adly said his work was inspired by the late Egyptian academic Samer Soliman, while he was a research fellow. Soliman, he says, encouraged him to look for the causes of economic crises beyond popular causes or dominant arguments.
Adly plans to translate his book into Arabic, with some supplementary paragraphs on the post-2011 era.