Egyptian President Abdel-Fattah el-Sissi is obsessed with threats to his rule, or as he would say, to Egypt’s stability. He’s hunted down Islamists and banned the Muslim Brotherhood. His security services have cracked down on the media, the internet and nongovernmental organizations.

Reportedly he is particularly fearful of middle class millennials, the kind of people who fomented the 2011 revolution.

As they say, even paranoids can have enemies. But in Sissi’s case his obsession seems to have missed out on the biggest threat of all, and that is none other than smooth-talking technocrats at the International Monetary Fund.

It’s easy to understand why Sissi might be oblivious to the danger. Unlike Islamists, the IMF doesn’t want to bring down his rule and, unlike bloggers, the media and NGOs, it never criticizes him in public, or it does so in such gentle terms that you have to be an expert on wonk-speak to recognize it. Quite to the contrary, when Egypt and Sissi were in dire financial straits three years ago, the IMF came up with a desperately needed $12 billion loan.

The result has been a remarkable turnaround for the Egyptian economy, certainly in comparison to the grim years after Hosni Mubarak was toppled. Egyptian GDP grew 5.6% in its latest fiscal year and will probably match or exceed it in each of the next two years. Unemployment is down and inflation, which at one point reached a 33% annual rate, is now a “mere” 8.7%. The government’s budget deficit is falling as its foreign debt relative to the size of the economy.

These are the kind of metrics that emerging market investors, and IMF economists, look at first in the developing world.

But the IMF is notorious for imposing painful terms. In Egypt’s case the $12 billion was contingent on liberalizing exchange rates, cutting fuel and food subsidies, privatizing companies and imposing new taxes. Sissi did most of what he was asked and the IMF cut Egypt the final $2 billion check this week.

The process is painful, but the IMF’s goal is to prevent long-term disasters like Greece or Argentina. The reasoning is that first you get your financial house in order and later the benefits will percolate through the rest of the economy, and everyone will be better off for it.

The problem is Egypt’s case is that nearly three years later, the second part of the success story hasn’t emerged.

Worse than before the Arab Spring

One of the most telling statistics unfortunately emerged just as the last IMF installment arrived. The government disclosed that the percentage of Egyptians living in poverty reached 32.5% last year, up from 27.8% in 2015, the year before the IMF program went into effect. This is real poverty because the government sets the poverty line at just $1.40 a day, 50 cents below the World Bank’s benchmark.

The middle class is suffering, too, and that could be more threatening from Sissi’s point of view because that's where rebellion is more likely to arise. Last year, the unemployment rate among youth was close to a third, more than it was on the eve of the Arab Spring.

The suffering of Egypt's poor and middle class can be blamed on the IMF, because liberalizing the currency set off a sharp depreciation and double-digit inflation. Subsidy cuts increased the prices of basic household goods and budget cuts reduced spending on health and education.

That might have been a reasonable price to pay if the Egyptian economy was on a growth trajectory that trickled down to ordinary people. But the economic revival has been more for the 1% than the rest. It’s a scenario that looks distressingly similar to the one that played out in the years before 2011. Thanks to a host of free market reforms, the top line figures for the economy were even stronger than they are now but the benefits were not reaching most Egyptians.

A key way the trickle-down is supposed to work is exports. Depreciation of the Egyptian pound should have led to a jump in exports, which would have created jobs and helped pay off the debt that the country is running up by borrowing from the IMF and in the international markets. However, while energy exports have risen thanks to the discovery of new offshore reserves, non-energy exports are stagnant.

It seems that Egypt’s economic problems are more fundamental than getting its financial house in order.

The economy remains highly regulated, corruption is pervasive and the army’s business empire is bigger and more untouchable than ever. Entrepreneurial drive in Egypt doesn’t stand much of a chance of manifesting itself. And if you can’t start up a company, then why not start up a revolution?

Okay, it’s a little facile to say that hundreds of thousands of Egyptians poured into Tahrir Square back in January 2011 because they couldn’t find jobs, saw no future ahead of them and were idling their days away in frustration. On the other hand, the protests that quickly led to Mubarak’s ouster didn’t come from nowhere.

It seems that Sissi was prepared to take the IMF medicine because he had no other choice. The rest of the cure should have come from real free market reforms; instead it’s being administered by the state security services. The prognosis is poor.