The free market has a bad name in post-revolutionary Egypt. In many people's minds, for example, privatisation is just another word for corruption. The economic reforms undertaken by Hosni Mubarak in recent years are associated with selling assets and land to the ex-president's buddies at a fraction of their value.

It is hard to predict where the debate over Egypt's future economic model will end up. The country is run by an interim government. New political parties are only embryonic. But a backlash against the market is a risk. In an attempt to achieve a fairer distribution of wealth, there is already talk of higher minimum wages, more public sector jobs and more state control over the economy.

This would be exactly the wrong conclusion to draw from the Mubarak years. The former dictator didn't run Egypt remotely like a competitive free market economy. He presided over a mongrel economy: part crony capitalism, part military-industrial complex and part state socialism -- with lashings of petty bribery, and blanket food and fuel subsidies to keep the population quiet.

The best economic model for Egypt would be some form of social market economy. After three decades of being run by a robber baron, a safety net is needed to protect the poor. But it can only be supported by strong growth; otherwise the country's army of unemployed will keep growing. Analysts estimate that the economy needs to grow 6 percent a year -- roughly what it has averaged in recent years -- to absorb the mass of young people entering the job market. That will be hard unless enterprise is unleashed and the future government creates an attractive investment climate.

Egypt is pregnant with potential. It could become a magnet for investment as both labour and land are cheap. It is also close to the world's largest economic bloc, the European Union.

Meanwhile, there is an opportunity to root out corruption. Mubarak and his cronies didn't just damage the economy by siphoning off wealth for themselves; businesses not connected to the regime found it hard to grow. Opening up industries to new entrants could provide a big boost to growth and job creation.

There could eventually be a big "peace dividend" too. The army isn't just big in military terms; it also runs large commercial enterprises. Nobody knows how big the military is in all its forms -- indeed, it has been illegal to write about it -- but guesstimates range from 5 to 40 percent of GDP.

The people are not ready yet to challenge the military, which played an important role in ensuring a peaceful revolution. But, if and when democracy gets established, there would be significant benefits in privatising its commercial operations and reining in its military ones.

Two other free-market reforms would pep up Egypt's growth rate. One is privatising state-run banks such as National Bank of Egypt and Banque Misr, the country's two largest lenders. At present, they mainly help finance the government and large established companies, many of which were linked to Mubarak's regime. It would be better if they lent money to new and emerging businesses.

Another big win would come from reforming the subsidy system, which provides cheap bread and petrol to all. The biggest problem is the petrol: subsidies don't even help the poor -- they don't own cars -- and cost some 6 percent of GDP. The savings from scrapping them could be used to finance better schools -- something which would add to Egypt's long-term growth potential.

Contrast such a programme with a populist anti-business agenda which could land the already-indebted government with a fiscal crisis and poison the investment climate.