Egypt’s Free Economy Excludes the Poor

By Bisan Kassab | Al Akhbar | January 25, 2013

Egypt’s 25 January Revolution produced few economic benefits for the country’s poor even though they were instrumental in overthrowing the old order. The Muslim Brotherhood has other economic priorities, including pushing measures that further economic liberalization in Egypt.

Given the Egyptian media’s focus, it might be difficult to believe that Egypt’s 25 January 2011 Revolution was not one of the educated middle class. On the TV screen, these shiny young faces appear on talk shows, portrayed as the leaders of the revolution.

But 28 January 2011’s “Friday of Anger” belonged to the marginalized who – using the tricks they learned in their daily battles with the state apparatus in the slums – were able to defeat the police forces. Regardless, the media see the revolution differently: “This is the revolution of dignity and not of the hungry,” they say.

This discourse paved the way for state repression of social demands. It even reached a point where the media began depicting Egypt’s working class – those that bolstered the revolution’s ranks with its mass mobilizations – of deliberately aiding the counter-revolution through strikes that hurt the economy. The first law issued by the Supreme Council of the Armed Forces (SCAF) following their rise to power banned strikes.

As time passed, the voices of social justice were replaced by the murmurings of political battles. These politicians, who have the upper hand in the media, wanted a piece of the revolutionary pie after disregarding its true heros.

Post-Revolution, Little Help for the Poor

Even before the revolution, experts close to the ruling National Democratic Party saw signs of unrest rooted in growing poverty. This was clear in the First Investment Report: Towards a Fair Distribution of the Fruits of Growth prepared by the General Investment Authority in 2009, which warned of sharply rising poverty rates.

Despite the steady economic growth in the last decade of Mubarak’s rule, the proportion of the population living below the national poverty line rose from almost 17 percent of the population in 2000 to 22 percent in 2008, according to the latest figures available from the World Bank.

Nevertheless, when SCAF took power after the fall of Mubarak, they ignored these facts and rejected the expansionary budget presented by Minister of Finance and prominent NDP member Samir Radwan. Instead, the first post-revolution budget was austere: workforce training funds were scaled back to 1 billion Egyptian Pounds ($151 million) from an original 2 billion, and funds for low-income housing were never raised by the expected EGP500 million ($75 million).

Furthermore, SCAF sought to protect the rich from any burdens, such as the tax increase proposed by Radwan on the distribution of capital gains by financial institutions.

Although the last days of SCAF’s rule witnessed an open struggle between the military class and Islamist forces, the conflict was not an indication of different economic policies. “The Islamist parties, which between them won a majority in the 2011-12 parliamentary election appear to favor the continuation of a broadly pro-market policy…” explained an April 2012 report from Chatham House titled “‘Bread, Dignity and Social Justice’: The Political Economy of Egypt’s Transition.”

The new Egyptian Constitution is a glaring example of the bias of the Muslim Brotherhood (MB) towards market liberalization. It stipulated linking salaries with production for the first time and neglected to set a ceiling for agricultural property.

But the constitution aligns with the Brotherhood’s previous positions: the group had been the primary opponent of agrarian reform during the Nasser era and endorsed a 1992 act liberating the relationship between landlord and tenant on agricultural land. The act had abolished gains won by peasants and was faced with wide-scale opposition in 1997.

The knockout blow to the MB’s popularity might be their attempt to implement a package of reforms for tax laws, which was frozen by President Mohamed Mursi a few hours after being announced. It would’ve raised sales taxes on several cement and communications goods and led to a steep increase on the commercial advertising tax – a move that could have hiked up the sales prices of nearly all goods and services.

It seems the MB has learned a lesson from the bread uprising against President Anwar Sadat in January 1977. At the time, the MB magazine al-Daawa described the protests as a “communist conspiracy.”

While the revolution seems to have resulted – at the very least – in a minimum wage increase to EGP700 ($105), the collapse of the Egyptian Pound against the US dollar this past January has precluded any benefits from such a raise.

Egypt Two Years On

By Ibrahim al-Amin | Al Akhbar | January 25, 2013

History books will cite January 25 as the moment of undoing for the dictatorial rule of Mohammad Hosni Mubarak. What we don’t know is what will be said about the scale of the change brought about by the uprising.

It is impossible to make confident predictions at present. Questions only raise more doubts as to the ability of Egypt’s new rulers to bring about major change. But as social theorist Samir Amin points out: “The Egyptian people are brave and will not be afraid to start a second and a third uprising.”

The events of the past two years prove that Amin’s assessment is realistic. The ongoing struggle over Egypt is the clearest sign that the country’s new rulers have not managed to establish a strong enough hold to last as long as their predecessors.

A formidable media machine continues in its efforts to restrict the Egyptian people’s uprising. Many people inside and outside Egypt wanted to persuade the masses that the underlying goals of their protest movement could be reduced to a mere change of president. These people have assumed powerful influence within the state’s institutions and seek to re-establish their control over the public and private sectors of the economy. They want Egypt and the Arabs to behave as though change has been accomplished.

This takes us back to Amin, who noted the menace posed by foreign powers in Egypt. He referred to a cooperative endeavor by the US, Israel, and Gulf states to ensure Egypt’s continued reliance on a policy of “begging from abroad” so as to better maintain its “assistance for US policies in the region.”

He observed that while “Mubarak’s Egypt supported the US invasion of Iraq…today’s Egypt under the Muslim Brotherhood assists the policies on Syria.” The end goal is for Egypt to acquiesce “to the Zionist scheme to eliminate the Palestinian presence within the occupied territory.”

There is no need to repeat Amin’s views on economic policy. The evidence that Egypt’s new rulers are resuming past economic policies is overwhelming. There will be no change in how the country’s economic, social, financial, and monetary policies are shaped. Hence the cruel joke that “Khairat el-Shater is Gamal Mubarak with a beard.”

Nobody can deny the Egyptian people’s massive achievement in bringing down a corrupt and tyrannical ruling clique that was subservient to the colonial West and submissive to the Zionist enterprise. But the story doesn’t end with the Muslim Brotherhood winning a narrow majority at the polls and claiming legitimacy to do what it likes with the country. Whatever misgivings there may be about the condition of the new opposition in Egypt, it has tough questions to face.

– What became of the legacy of Mubarak’s rule? What does the Islamic mantle mean when it is donned by rulers who pursue the same policies that they once said caused poverty, ignorance, and misery?

– Freedom of expression cannot be deemed a gift from the country’s new rulers. Egyptians are demanding guarantees that the gains made so far are not reversed. Can we expect a rotation of power in a few years time? Will Egypt’s new rulers help to recover its unified national identity, or will we see more ugly images of sectarian divisions?

– What real change has there been in the country’s foreign policy? What role does it play in reviving collective Arab action? Or has that been surrendered to the medieval monarchies of the Gulf? Is Egypt acting to regain its rights, sovereignty, and freedom with regard to supporting the people of Palestine?

– Can anyone provide any evidence that the money stolen by the National Democratic Party under Mubarak and his clique is being recovered? Or is the looted national wealth merely passing from one regime to the next?

Mubarak era tycoons join Egypt President in China

Several of the businessmen who travelled with Morsi to China were prominent supporters of Mubarak and former members of the NDP

Ahram Online | August 28, 2012

A delegation of Egyptian businessmen who travelled to China on Monday, one day before the visit of Egyptian President Mohamed Morsi, was made up of many figures who were close to the former regime of Hosni Mubarak, and who were members of Mubarak’s now-dissolved National Democratic Party (NDP).

In his first state visit outside of the Arab world, Egypt’s president headed a delegation of seven ministers and 80 businessmen to China.

One the most prominent NDP figures who was invited to accompany the new president was Mohamed Farid Khamis, chairman of the Oriental Weavers Company, one of the world’s largest carpet companies. Khamis was member of the political bureau of the NDP and a member of parliament.

Another prominent name is Sherif El-Gabaly, chairman of Polyserve Fertilisers and Chemical Group, and a member of the administration of the Egyptian Federation of Industries, who was also a member of the political bureau and was known to be close to Gamal Mubarak, son of the former president.

Other members of the NDP present in the delegation included Khaled Abul-Makarem chairman of Fibertex, Walid Hela vice president of heavyweight plastic producers Al-Helal wel Negma and Farid El-Tobgui chairman of Bavarian group.

Hassan Malek, a member of the Muslim Brotherhood and a well-known businessman, heads the delegation and is responsible for the choice of members. Malek, president of a committee for communication between businessmen and the presidency, told Ikhwan Online, the official website of the Muslim Brotherhood, that the group was comprised of businessmen who had existing business ties with China.

The delegation also included some businessmen who have close ties with the Brotherhood, such as Ahmed El-Sewedy, chairman of El-Sewedy Electrics and Abdel-Rahman Samir El-Naggar, chairman of Daltex Food Industries.

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