Impact of Economic Dependence on Economic Growth in Egypt

The dearth of empirical research on economic dependence in Egypt since the 1980s underscores the significance of this study, which investigates the relationship between economic dependence and economic growth in Egypt from 1977 to 2021. Utilizing the autoregressive distributed lag (ARDL) model, this study examines the effects of trade, investment, debt, and aid dependence on economic growth. The findings reveal that investment and aid dependence have a positive impact on economic growth, while trade and debt dependence have a negative impact. These outcomes are compared with the arguments of dependency and neoclassical economics theory to provide a comprehensive analysis of the implications. Moreover, the study provides policy recommendations to mitigate the negative impacts of economic dependence and promote self-reliant development, including prioritizing local development goals in global relations, diversifying the sources of aid, reducing debt used in financing investment projects, and restructuring the economy to prioritize national interests. These policies can help Egypt achieve higher rates of growth while mitigating the negative effects of economic dependence.