An opportunity has presented itself in Egypt. For the people, this is a moment of democracy and freedom, but for the US, International Monetary Fund (IMF), World Bank and their partners in Egypt, this is a political opening in which to force the same neoliberal policies cloaked in revolutionary rhetoric.
Trickle Up Economics
Hosni Mubarak presided over a wholesale privatization of the Egyptian economy. At the behest of the US, the IMF and World Bank, he weakened government regulations, public-private partnerships and toxic loan agreements. The United States Agency for International Development documents denationalization under Mubarak in their Privatization Coordination Support Unit quarterly review from spring 2002 and points to ERSAP (The Economic Reform and Structural Adjustment Program), which Mubarak implemented in 1991. Under this program, Mubarak initiated Public Law 203, which allowed the sale of state-owned enterprises to foreign interests. This continued for the next 20 years and resulted in unemployment, poverty and inflation.
According to the International Labour Organization (ILO), at the time of the revolution, the unemployment rate hovered around 10 percent, but was much higher for youth (15-25), who were experiencing 23.7 percent unemployment. Also, the youth of Egypt are an increasing portion of the population (about one-fifth). These youth all began to enter the workforce at the same time, which created an excessive demand. As a result, there was a young, educated and underemployed population working for poverty wages.
According to the United Nations Development Programme (UNDP) Arab Human Development Report 2009, Challenge to Human Security in the Arab Countries, 32 million people or about 40 percent of the Egyptian population were living at or below the poverty line of $2/day.
Informal settlements grew under Mubarak. In 2007, the Egyptian Ministry of State for Local Development estimated that 12.2 million people lived in 870 informal settlements throughout Egypt. A majority of these were in densely populated slums found in greater Cairo.
On $2/day, it also goes without saying, it's difficult to buy food, especially when the prices increase. The Egyptian Ministry of Agriculture estimates that Egypt imported 40 percent of its food and 60 percent of its wheat. It was the largest wheat importer in the world. Dependent on a global supply chain, Egypt was left open to speculation, which created volatility in available food. In the spring of 2008, food prices in Egypt were experiencing a 200 percent inflation rate, according to the UN World Food Program. In 2010, there was another spike that was over 250 percent. These spikes led to riots, which Mubarak responded to by offering subsidized bread, but it was too little, too late.
Ties That Bind
Mubarak was good to the military. In a September 2008 WikiLeaks cable on Egypt, US Ambassador Margaret Scobey wrote, “The military helps to ensure regime stability and operates a large network of businesses, as it becomes a 'quasi-commercial' enterprise itself.”
With the privatization and liberalization of Egypt's economy came public-private partnerships, from which the military often benefited. On it's web site, the ministry states that it “supervised” 16 military factories of which 14 produced both military and civilian goods. Joshua Stacher, assistant professor at Kent State University in Ohio and leading researcher on the Egyptian military, has estimated that up to one-third of the Egyptian economy was under military control before the 25 January Revolution.
There were also peace agreements to abide by. In exchange for keeping peace with Israel and keeping the Suez Canal open, Egypt received an average of 1.6 billion a year in military aid from the US, second only to Israel.
In order to maintain its position of power and keep the cash flowing, Mubarak's regime tightened its grip on the population with increasingly egregious policies of repression.
Field Marshall Mohamed Hussein Tantawi carried out Mubarak's orders. He used the Emergency Law (Law No. 162 of 1958) to detain people without charge, deny citizens of legal representation and torture those who dared to speak out against the regime. He enforced penal codes that criminalized free speech such as Article 184, which outlawed “insulting public authorities”; Article 179, which outlawed “insulting the president”; and Article 102, which outlawed “spreading false information.”
Human Rights Watch and Amnesty International repeatedly released reports on arrests without charge, the use of military trials and torture at the hands of Mubarak's most trusted military officials: The Interior Ministry.
Under Mubarak, independent unions were outlawed. The Egyptian Trade Union Federation (ETUF), which had been established under Nasser, operated as an arm of the state. Union representatives were beholden to their positions of power and were slow to challenge the ETUF, so rank-and-file workers had to organize themselves.
According to Joel Beinin, Stanford University professor and researcher of the Middle East, over two million workers participated in more than 3,000 collective actions from 2004 to the lead up of the 25 January Revolution. The first two legal independent unions formed. The General Union for Health Technicians formed in a fight over minimum wage and the Independent General Union of Real Estate Tax Authority Workers went on strike.
During the same period, a youth movement emerged called The Egyptian Movement for Change, which is often referred to as Kefaya. They attempted to build a youth coalition demanding the departure of Mubarak, an end to corruption and populist economic policies.
Then, on April 6, 2008, the Textile Workers League of Ghazl el-Mahalla went on strike to demand an increase in the minimum wage as well as food allowances and better working conditions. Twenty-seven thousand people flooded the streets of Mahalla and faced a bloody crackdown. The April 6 Youth Movement formed at this time in solidarity with the striking workers. Many youth, who had been in Kefaya, joined April 6, including Ahmed Maher, who told me in an interview, “We decided not to have political parties. Instead we formed a group of people with many ideologies united by demands.” They would go out to some of the poorest districts, like Imbaba and Bulaq and leaflet at cafes. They also used social media.
The majority of Egyptians do not have computer access, but those who do are fanatical about it. Thousands of bloggers and social media enthusiasts began documenting corruption in the regime and called for an end to the repressive police state. Hundreds of thousands of youth, communicating via Facebook and Twitter, used the free flow of information for protests on a weekly and sometimes daily basis.
Khaled Said was one of these Facebook revolutionaries. In a café in Alexandria, he tried to upload a video of police brutality when he was dragged out into the street by the police and brutally murdered in front of bystanders. These images circulated on the We Are All Khaled Said Facebook page until activists like Mona Shahin, of the Youth Union and shadow government, saw them. In an interview she said, “There was nothing to identify with. In school we were told about the National Democratic Party (NDP) and the Muslim Brotherhood, so we said no to all of that and chose different politics. We saw ourselves in Khaled Said.”
The 25 January Revolution came from a popular and organized movement. It was a struggle over both economic and political freedom.
According to the World Bank's World Development Indicators, Egypt accrued 33 billion in external debts under Mubarak. These debts have not been forgiven.
The White House has come out publicly in support of the Egyptian revolution. Obama stated in his address on May 19, “We know that our own future is bound to this region by the forces of economics and security.” He told Congress, “We do not want a democratic Egypt to be saddled by the debts of its past.” Obama called for a relief of $1 billion in debt, but also for an additional $2 billion in loans, so, in effect, Egypt will incur additional debts.
The following week, on May 26 and 27, the US participated in the G8 summit held in Deauville, Normandy, where world leaders and representatives from the IMF and World Bank discussed recent events in Egypt. At closing, they released the Declaration of the G8 on the Arab Spring, which outlines their intention to intervene in the Middle East and North Africa.
The report states, “The Deauville Partnership will develop an economic agenda that will enable reforming governments to meet their populations' aspiration for strong, comprehensive growth and help facilitate a free and democratic outcome to the political processes under way.”
It further states, “We call on multilateral development banks to deliver enhanced, frontloaded and coordinated support to Partnership Countries based on strong economic programs to strengthen governance and bolster the business climate.” The partnership countries highlighted are Egypt and Tunisia.
Negotiating With the Supreme Council of Armed Forces
Egypt is an appealing reform prospect for the US and IMF if there's a compliant partner. When Mubarak left office, he entrusted former members of his Interior Ministry with running the country. SCAF (Supreme Council of Armed Forces) has been the de facto government and they have continued if not enhanced many of their pre-revolution policies of repression.
All of the articles outlawing freedom of expression are still in place. SCAF instituted an anti-strike law, which criminalizes public assembly that disrupts stability. There's also an anti-thuggery law, which is broadly used to target protesters. For expediency's sake, SCAF has also been using military trials. In early June, the military council announced that there had been over 7,000 military trials since the 25 January Revolution. Human rights advocates say it's likely closer to 10,000 and that these are mostly civilians, who should be tried in civilian courts.
SCAF is intent on preserving power by whatever means necessary and they're looking for assistance in doing it.
The IMF has been in negotiations with SCAF since Deauville. On June 5, an agreement was reached in which the IMF would give Egypt a $3 billion loan to aid in its democratic transition. The potential new head of the IMF, French Finance Minister Christine Lagarde was in Cairo on June 12. According to AFP she told reporters that she was confident in her bid, especially after meetings in Cairo.
Gallup-Abu Dhabi has released a report entitled, “Egypt from Tahrir to Transition: Egyptians on their assets and challenges and what leaders should do about it.” The report shows that most Egyptians are wary of support from the US and leading financial institutions, especially when it interferes with democratic process. Fifty-two percent of Egyptians oppose any form of economic aid from the US. Seventy-five percent of Egyptians oppose US economic aid to political groups. These polls were taken, also, during a time of uncertainty in Egypt.
The US and SCAF have made multiple attempts to reach out to the revolutionaries. Hillary Clinton attempted to meet with “the youth of the revolution,” but was met with criticism over US support of Mubarak. Waleed Rashed and Ahmed Maher of the April 6 movement told the American press, “The tear gas used against protestors in Tahrir Square was made in the US.” SCAF has repeatedly held meetings with youths, but has been unable to reach any agreement. During the National Dialogues held in early May, former National Democratic Party officials were in attendance, so members of April 6 and others walked out.
On May 27, the April 6 movement, 25 January Coalition, Youth Union, and other youth groups organized what they called the Second Rage Revolution in Tahrir Square. Tens of thousands came out in protest. There were several signs condemning the military and asking for the resignation of Tantawi, head of SCAF. One protester, a young man, a student at The American University in Cairo, said, “There hasn't been enough change. Mubarak was a symbol of all that's wrong with this country.”
The 25 January was just the beginning of an ongoing revolution in Egypt. The military and its Western partners are attempting to maintain stability, but strikes and protests continue. It is unclear how the balance of power will tip.