APR 27, 2024 JLM 57°F 04:10 AM 09:10 PM EST
48 years later: How did Egypt manage to finance the war in 1973?

In Egypt, today marks exactly 48 years since the outbreak of the "October War" (Yom Kippur). The question is how Egypt managed to finance the war 6 years after suffering a huge military defeat. 

First to the numbers. In Egypt, after the 1967 war, it was estimated that the damage to the economy reached about 11 billion pounds (over 20 billion dollars in terms at the time). The reasons: loss of oil fields in Sinai, destruction of military and civilian infrastructure, loss of revenue from the Suez Canal and tourism (a little less and the loss of the human factor).

Despite everything from 1967 to 1973, the authorities pursued an economic policy that allowed the country to go to war again. 

How? 

First of all printing money and increasing the tax burden so that the Egyptian public was a full partner in rehabilitating their military capabilities. In addition, the government restricted the import of products such as cigarettes, clothing, etc. and encouraged local production. Beyond that, the Egyptian government placed emphasis between 1967-1973 on investments related to the building of the military force. Egypt's military spending in 1973 reached about 20% of GDP compared to only 6% before the 1967 war.

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