The informal Economy as an engine for poverty reduction and development in Egypt

The purpose of this paper is handling the informal sector in Egypt and the role it can play in accelerating the development process and poverty reduction. The structure of the paper starts with an introduction, and then gives a definition of development and its objectives in order to give a comprehensive ground for what will be discussed under the informal sector section and poverty section, as at the end the paper links development, informal sector with poverty reduction. Furthermore, the paper discusses situation of the informal sector in Egypt and the role of government in issuing the laws that may pave the way for creating a more conducive business environment for the Micro and Small Enterprises (MSEs) which constitute the traditional form of informal enterprises. In addition, the paper explains formalization of informal economy, showing the pros and cons of both formal informal sectors, most importantly its shows a trade off between the formality and informality. The paper closes with providing a policy recommendations and finally conclusion.