Economic Growth in Egypt and India

Economic Growth in Egypt and India





Economic Growth in Egypt and India



2003-2009 9%

1991 5.3%

1995 7.3%

2000 6%

Source: World Bank, 2008

Poverty level in India

Year 2010 29.8%

1993-1994 and 2004-05 775 of Indians live on 0.50 dollars a day

Source: World Bank, 2008

The Global Hunger Index 1996-2011 it went up to 23.7%

The Human Development Index in India 1980-2012 has risen annually from 0.345-0.554


GDP per capital in US dollars

YEAR 1981 1,354.81

1991 2,524.99

2001 3,685.98

2006 4534.82

Source: World Bank, 2008

The Human Development Index in Egypt 1980-2012 has risen from 0.407 to 0.662

The Gender Inequality Index is 112/187

The economy of India is one of the largest in the world. India as much as it has enjoyed economic growth it has suffered economic fluctuations as well. The economy of India in the years 1947-1991 was a mixed economy; it was composed of capitalism and socialism. The use of capitalism has been associated with a lot of consequences and therefore during this period India suffered certain inefficiencies like corruption ( HYPERLINK “” Arup and HYPERLINK “” Heba 32-6). Therefore the system did fail. The next policy that the country adopted was liberal and free market principles in the year 1991. India then was able to engage in international trade. Their economy grew as it was able to develop its infrastructure and this was seen in the increase in the per capita incomes.

The economy of Egypt just like the one in India has had its ups and downs. The country’s macroeconomic performance in the 1990s improved with them having been involved in the gulf war hence been able to get reliefs. Egypt had also been able to get funds from the International monetary fund. The next century also started well for Egypt as they improved their infrastructure and also use better policies to deal with the inefficiencies.

Egypt however, has made some decisions that have affected their economy and one of those factors is inequality whereby the government after getting its wealth it’s not able to equitably share the wealth. This leads to some parts of the country been under developed a condition mostly associated with the developing nations. Inequality has also lead to the country’s most productive people been left with no employment and those lucky are under employed (Liu and Robert 76). The less developed parts in Egypt have led to lack of infrastructure growth hence access to education to the larger population has become impossible.

Inequality in Egypt is also seen in gender where women do no easily participate in their economy due to social and religious influences. These influences have led to women not been active in education since they are not allowed to involve themselves in careers. Poverty in Egypt has risen over the last three decades; this has also led to food insecurity affecting mostly the children. The rural areas are mostly affected and this is the larger population as it totals to 69%, these are people living below the poverty level. There is a large gap in Egypt between the rich and the poor one is in one end and the other is in the other extreme end (Liu and Robert 65). This can be seen in annual household income with the poor having $4090 income while their expenditures average is $ 5154 ( HYPERLINK “” Arup and HYPERLINK “” Heba 32-6). As can be seen from the data found most of the population uses $0.50 a day thereby showing that majority of Egyptians live under the poverty line as the World Bank has set $ 2 a day for a normal household.

Research has shown that in Egypt there is a literacy rate over 71% with males taking the upper hand. This does not come as a surprise seeing that there is a lot of poverty and inequality in Egypt making it hard for the larger majority to attain education. Most nations have been able to eradicate poverty but following the millennium development goals but Egypt has been left behind. By the year 2000 statistics show that 16.7% of Egyptians were living below the national poverty line and it has actually increased in the next years ( HYPERLINK “” Arup and HYPERLINK “” Heba 41).

The level of poverty in Egypt has not only been measured by how much they spend or earn in a day but also by their level of living. This has also shown that poverty is real in Egypt since there is no easy access to better health; the level of education is really low and also availability of education facilities. The youths also have no jobs and are left unemployed for a long time.

What really causes poverty in Egypt it has been said that prices of food in Cairo is unbearable and most people cannot afford hence leading to child mortality since children cannot deal with temporary hunger. The lack of access to food makes it hard for the population to work and even go to school and better their future. However the main cause of poverty in Egypt is the high population growth, its population has increased from 44 million in the year 1981 and is now 80 million. The population is rising but less is done to cater for the growing population. High unemployment is also a cause of poverty in the country as most youths are unemployed and this can be associated with the effects of the increase in population (OECD, 2011, 47). The policies adopted to deal with inefficiencies in Egypt have also contributed to poverty. The country is endowed with resources but mostly they are not efficiently used. The measures taken mostly end up benefiting the rich instead of the poor and more government funds also do not reach all the areas.

In India poverty and inequality has also had an effect on education. There is also the problem of the extremely rich and the extremely poor. Statistics show that 68.7% of the population in India lives on less than $2 a day and hence maybe said that a large population lives under the poverty line. Children in India are the most affected by these poverty levels as it has been seen that 42% of children in India are actually underweight. The Global Hunger Index of India has actually gone up since the year 1996 and is now at 23.7% (Liu and Robert 89-92). Poverty in Nadia is also seen by the fact that human beings do not have the necessary essentials to survive from better health care to lack of food. The poverty level has had an impact on education as the literacy level in India is actually low. Inequality has also led to poverty and also increased illiteracy levels as resources are not equally distributed among the Indians.

The causes of poverty in India are similar to those in Egypt as India also faces high population and also the use of ineffective policies. In India majority of the population which is 60% largely depend on agriculture and growth in agriculture has gone down over the years. This affects the economy too as agriculture contributes 18% to India’s GDP (OECD, 2011, 54). The land available are not used for high income projects and hence no growth in the sector. Unemployment cases have risen over the decades as the only available employment is mostly farm related and those who move to towns end up frustrated with no jobs.

These effects of poverty and inequality on education show that the way out is alleviating poverty. There are certain measures that the government can use to eradicate poverty and one of them is ensuring there is equality. Resources should be equally distributed to ensure everyone has access to the basic necessities like education and better health centre. The government should also take care of the minority in the society, the women and the children and also focus on the weak sections of the country (Dash 66). Emphasis on education once all these have been implemented will lead to economic growth of the nation.

To address the economic and social changes facing Egypt and India, it is important to identify the root cause of these changes, otherwise no progress would be attainable. For this reason, based on the above discussion, it is critical for the concerned authorities to adequately address the income inequality related issues, poverty, and education in order to steer economic growth and development (Dash 88). Given the fact that more than half of Indians and Egyptians are living in poverty with little income that is insufficient to meet all their basic needs, an immediate course of action is necessary. This calls for active participation and involvement of the leading stakeholders in restoration of economic development and growth, thereby eliminating poverty. Since poverty is the main factor behind this low economic growth and development in these two countries, the policy focus directed towards addressing poverty with the emphasis laid on poverty reduction strategies. A reduction in the poverty index will adequately resolve issues related to income inequality, and hence, a reduction in the income gap between high income earners and low income earners ( HYPERLINK “” Arup and HYPERLINK “” Heba 65). Then bridging of the income inequality and disparities is likely to result into re-distribution of resources. Through reduced poverty, it is possible to stimulate and accelerate economic growth rate in the two economies hence, improved GDP and higher education attainment index.

In conclusion, the fight against poverty is the most feasible and long-term strategy of improving the performance of India and Egypt. Reduction in poverty index will generate more resources and result into improved living standards. With higher income, the citizens will be financially empowered hence increased purchasing power parity and ability to finance their basic need, including education. For Egypt, one way of reducing poverty to create more employment opportunities for the poverty stuck unemployed persons. Through increased employment opportunities, the country’s development level would significantly improve.

Works Cited

HYPERLINK “” Arup Banerji and HYPERLINK “” Heba El Laithy. Poverty and Economic Growth in Egypt, 1995-2000. World Bank Publications, 2003.

Barro, Robert J, and Xavier Sala-i-Martin. Economic Growth. Cambridge, Mass: MIT Press, 2003. Print.

Dash, L N. World Bank and Economic Development of India. New Delhi: APH Publ. Corp, 2000. Print.

Egypt: Business Climate Development Strategy. Paris: OECD, 2010. Print.

Liu, Lewis-Guodo, and Robert Premus. Global Economic Growth: Theories, Research, Studies and Annotated Bibliography, 1950 – 1997. Westport, Conn. [u.a.: Greenwood Press, 2000. Print.