Hernando de Soto on Egypt

He cites his 2004 research:

†¢ Egypt's underground economy was the nation's biggest employer. The legal private sector employed 6.8 million people and the public sector employed 5.9 million, while 9.6 million people worked in the extralegal sector.

†¢ As far as real estate is concerned, 92% of Egyptians hold their property without normal legal title.

†¢ We estimated the value of all these extralegal businesses and property, rural as well as urban, to be $248 billion–30 times greater than the market value of the companies registered on the Cairo Stock Exchange and 55 times greater than the value of foreign direct investment in Egypt since Napoleon invaded–including the financing of the Suez Canal and the Aswan Dam. (Those same extralegal assets would be worth more than $400 billion in today's dollars.)


Transparent and enforceable rights to property are a critical requirement for any capital accumulation. Why live for tomorrow when someone can take it from you at any time.

There are many people in the underground sector who are also in the public sector. It is well known that many bureaucrats simply show up at their official job long enough to sign in and then head out a back door to go the job that really earns them some money.

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