President Abdel Fattah El-Sisi has portrayed himself as a figure who could bring not only political but also economic stability. His government periodically outlines broad economic plans, most recently the 2016-17 budget put forth by Prime Minister Sherif Ismail in March, which set three priorities of closing down the fiscal deficit, increasing investments, and engaging in more efficient welfare spending. However, while these priorities constitute a part of an economic plan, they do not form a vision for the economy, particularly given that the 2011 revolution was based largely on the deteriorating state of its middle and lower economic classes. Rather than addressing persistent economic problems like the growing income gap, El-Sisi’s statements and policies have steered clear of specifics in favor of emotive and patriotic rhetoric, especially in promoting mega-projects he hopes will boost Egypt’s attractiveness to foreign investors.

In retrospect, it seems President El-Sisi believed the economy only needed a spark to be nudged back to the improved fiscal balance and high GDP growth rates that Egypt experienced prior to 2011. Grand projects and investment conferences would in theory lure funding to jumpstart the economy and solve the government’s insolvency. Gamal Abdel Nasser’s major projects helped build his popularity and speed economic growth early in his tenure. Hosni Mubarak continued this strategy without paying enough attention to the dwindling welfare and purchasing power of ordinary citizens, increasing inequality, rampant corruption, red tape, and clientelism—a level of economic mismanagement that ultimately led to IMF-imposed, neoliberal economic policies in the 1990s. Similarly, El-Sisi has forced through grand projects, using the military as his major contractor, with the allegiance of a class of businessmen who cannot afford to be on the wrong side of the regime due to the regime’s high intolerance for all kinds of dissent. While Egypt is in need of some infrastructural development (and which is partly provided by some of these projects), ultimately it looks as though the regime is aiming to boost its profile and rapidly create a glittering list of accomplishments before actually achieving anything for the longer-term economy.

The current regime is essentially blending the Mubarak plans of the 1990s and 2000s—which relied on a centralized security state implementing deregulation and privatization while emulating Nasser-era mega-projects aimed at rallying patriotism—while heavily increasing the role of the military in their implementation. The first of the latest series of mega-projects was an ambitious $8 billion endeavor to create a 37-kilometer (24-mile) extension to the Suez Canal.

The canal expansion plan was ambitious in scope and impressive in execution—but ultimately overstated in utility. The undertaking was achieved in a remarkably short period of time (which also drove up its cost) as a result of the efficiency the military employed in the activity. The president famously gave an on-air order to the admiral in charge of the project, Mohab Mohamed Mameesh, to complete it in one year instead of the planned three, to which Mameesh agreed with no reference to why they had initially planned three years. But, contrary to its international billing as “Egypt’s gift to the world” and locally as the solution to many economic woes, the project has had disappointing returns since its completion. Though this is partly a result of dropping oil prices, it appears that the project was poorly planned, focusing more on speed and pageantry rather than cost-effectiveness or utility. The canal expansion was supposed to signal to the world—and to Egyptians—that El-Sisi is a no-nonsense “doer,” yet many questioned how successful the canal project would be in delivering his promises of faster traffic and higher revenues. The long-term plan includes developing nearby land as a logistics services hub—a plan that promises to actually add value to the economy—but its potential has received far less media attention because it has less public relations value.

In addition, after the May 2015 “Egypt the Future” economic conference in Sharm El-Sheikh, Minister of Investment Ashraf Salman announced that Egypt had signed around $92 billion in Memoranda of Understanding (MOUs), in addition to around $38 billion in formal deals, financing, and loan agreements. Yet many involved in the conference, such as Telecom tycoon Naguib Sawiris, have stated that the majority of these MOUs would not be actualized and the conference would ultimately fail—as Egypt needed to first acknowledge and then fix systemic problems with red tape, ineffective bureaucracy, and endemic corruption. Though the government did amend the investment laws to suit the needs of these specific investors—such as giving investors greater legal immunity and deregulating public procurement—these reforms may exacerbate corruption while failing to attract the kind of FDI that creates value.

One of the headline deals of the conference—building a new administrative capital for Cairo, which aimed to generate international confidence in the Egyptian economy—was severely set back last January. The Emirati contractor Arabtec had backed out of the deal, despite announcing planned investments of around $2 billion, claiming that they were not able to agree on terms after the Egyptian government changed some of the details of their non-binding MOU. As with the Suez project, the military swooped in and became the main contractor. In fact, the military has become the state’s primary construction contractor, sitting at the helm of most projects via the Armed Forces Engineering Authority. While the Armed Forces are perhaps able to complete certain important infrastructural projects at times of economic and political uncertainty, their ever-growing role in the economy is unlikely to inspire confidence among local or international investors, who would like to see a vibrant private sector.

Yet despite the grand ambitions and scope of such projects, foreign investment only slightly picked up to $3.1 billion in fiscal year 2015-2016 from $2.6 billion the year before (primarily due to cross-border mergers and acquisitions). Egypt’s exports decreased in the same period by 26 percent, reflecting a decline in oil prices, and the balance of payments deficit increased greatly over the same period from $1 billion to $3.4 billion. The increasing deficit is symptomatic of Egypt’s inability to drive up demand for its currency, which along with its shrinking foreign currency reserves is contributing the rapid devaluation of the Egyptian pound, which decreased from 7.17 to the dollar to 8.86 to the dollar since El-Sisi came to power in June 2014. For a country with a high import bill (Egypt is the world’s largest wheat importer) this contributes to Egypt’s highest levels of inflation in the past seven years, from 8.2 percent in May 2014 to 10.9 percent in April 2016. This is on top of persistent issues such as high youth unemployment.

In their efforts to address these underlying structural issues, Egyptian authorities are demonstrating that they have just as little vision as they do for the mega-projects. For example, to curb inflation, the Central Bank of Egypt raised interest rates to a ten-year high on June 16 to discourage consumer spending while attracting liquidity in savings and putting a lid on soaring prices. However, this decision counteracts other efforts to encourage investment, such as the historic devaluation of the pound in March this year, which was supposed to encourage foreign investment and build up trust in the Egyptian regime’s free-market credentials.

Planning a comprehensive plan for economic stability is of course not so simple. Besides inheriting an unenviable economic situation, this government faced a series of external and internal shocks that impeded many of its plans, especially in tourism. To top it off, there has been a spate of energy shortages, prompting the government to take the unpopular position of decreasing subsidies on energy products while adding to the energy capacity of the national grid. Though GDP growth has been a silver lining, at about 4.2 percent in fiscal year 2015-2016, compared to nearly half of that the year before, many of the challenges will remain as long as the government has a lack of cohesion regarding economic policy. International financial institutions seem to agree, as Egypt’s credit outlook was downgraded on May 13 by Standard and Poor’s, and the IMF on April 12 forecast a decrease in Egypt’s 2016 GDP growth.

The last time Egypt faced this kind of economic crunch and insolvency was in the late 1980s. The state was fast approaching bankruptcy. Fiscal deficits caused by historically high spending on subsidies, employment, and services, coupled with a deteriorating economy, meant the state could not support its crippling foreign debt. However, Egypt was saved from complete insolvency during the Persian Gulf War, which allowed Egypt to bargain with the United States and some of its allies for debt forgiveness and more aid in exchange for its military involvement. It was this economic “miracle” that prolonged Mubarak’s regime for a couple more decades. Short of another miracle, this regime will need to embark on significant and comprehensive structural change to remove impediments to development in the country in order to have any hope of achieving sustainable and equitable growth.

This article is reprinted with permission from Sada. It can be accessed online here.

Mohamed Elmeshad is an Egyptian journalist and PhD student at the School of Oriental and African Studies (SOAS) in London.