Evidence suggests that improving the investment climate is key to accelerating growth of income
and employment in Egypt. Building a better climate for firms to invest, generate jobs and grow is
one of the two main pillars of a strategy for development. Before outlining that strategy and
discussing why improvements in the investment climate matter and how they can be promoted,
the lessons of development experience on which this strategy is based must be examined.
We have lived through a remarkable 25 years. At the end of the 1970s, China emerged from
the turmoil of the Cultural Revolution and embarked on the reforms initiated by Deng Xiaoping.
As a result, more than a billion people, one-fifth of the population of this planet, have seen a
sustained period of growth and poverty reduction that has been unique in human history. At the
end of the 1980s, four hundred million people of Central Europe and the former Soviet Union
also set off on a remarkable transition from a command economy to a market economy. There
have been both achievements and trauma, but the changes are irreversible and many countries
are now being welcomed into the European Union. More quietly in the early 1990s, India
initiated a process of economic change and is now seeing growth and poverty reduction which
few would have thought possible 20 years ago.