Our Views
Over a year ago, Mr. Hassan Heikal proposed the idea of eliminating government debt through what he called the “Grand Swap.” At that time, the Egyptian Center for Economic Studies (ECES) wrote an opinion piece on this matter but decided not to publish it, opting instead to circulate it among limited circles of specialists. The reason for not publishing it then—and still—is the Center’s conviction that there is no need to circulate a proposal that is fundamentally flawed from a scientific standpoint, as discussing it only fuels confusion and may mislead non-specialists who could be attracted by the superficial appeal of the proposal without a clear understanding of its deep and potentially serious consequences. However, around two weeks ago Prime Minister Madbouly promised significant debt reduction without elaborating on how this would be achieved. This led to the revival of Hassan Heikal’s proposal, at least as one of the suggestions on this matter as well as to discussions on social media and press interviews between proponents and opponents.
At this point, ECES found that publishing the aforementioned opinion piece has become a national responsibility, aimed at correcting misconceptions and presenting a comprehensive analysis of all aspects of the proposal, as well as relevant international experiences. In what follows, this edition presents the analysis along with some concluding remarks.
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