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Egypt's Uprising: Not Just a Question of 'Transition'

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    Egypt s Uprising: Not Just a Question of Transition By Adam Hanieh The B u l l e t Socialist Project - home E-Bulletin No. 462 February 14, 2011
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      Egypt's Uprising: Not Just a Question of 'Transition'

      By Adam Hanieh

      The B u l l e t

      Socialist Project - home

      E-Bulletin No. 462 February 14, 2011


      The events of the last weeks are one of those
      historical moments where the lessons of many decades
      can be telescoped into a few brief moments and
      seemingly minor occurrences can take on immense
      significance. The entry of millions of Egyptians onto
      the political stage has graphically illuminated the
      real processes that underlie the politics of the Middle
      East. It has laid bare the long-standing complicity of
      the U.S. and other world powers with the worst possible
      regimes, revealed the empty and hypocritical rhetoric
      of United States President Barack Obama and other
      leaders, exposed the craven capitulation of all the
      Arab regimes, and demonstrated the real alliances
      between these regimes, Israel and the USA. These are
      political lessons that will long be remembered.

      The uprisings have also shown the remarkable fragility
      of the nepotistic regimes across the Arab world. These
      regimes depended upon their networks of secret police
      (mukhabarat) and thugs (baltajiya), and inculcated a
      seemingly unassailable pessimism about the possibility
      of change that was reflected in the biting sarcasm of
      Arab political humour. But these mechanisms of control
      simply evaporated as people shed their fear. The Arabic
      word intifada conveys this sense of shaking off, and
      the sight of millions of people losing their fear and
      gaining a sense of the possible will long remain one of
      the most enduring memories of this revolutionary
      moment. The historic significance of this process
      should not be lost - there has quite literally never
      been a moment of such potential in the Arab world.

      The purpose of this article is not to recount the story
      of these uprisings or to attempt to predict the
      possible future scenarios of Egypt's revolutionary
      process. Rather, it aims to draw out some of the
      broader implications for the Middle East as a whole,
      and to argue that these struggles are best understood
      through the lens of class struggle. These recent
      uprisings show decisively that class remains the key
      dynamic to understanding any social transformation and,
      simultaneously, that the ways in which 'class struggle'
      is expressed will take a variety of forms that
      constantly disrupts any reductionist economistic
      readings. Capitalism in the Middle East

      What this means is that we need to think of 'politics'
      and 'economics' - which we are accustomed to conceive
      of as separate spheres - as fused and part of the same
      struggle. To claim that the Egyptian demonstrators are
      primarily concerned with Hosni Mubarak and so-called
      'political freedoms' - which has been the dominant
      narrative of U.S. and other world leaders and much of
      the corporate media coverage - is to distort and
      misread the nature of these protests. Clearly the
      protests have encompassed a wide variety of social
      layers with different demands, but their overall logic
      is inextricably tied to broader questions of capitalism
      in the Middle East. These questions include: (1) The
      global economic crisis and the nature of neoliberalism
      in Egypt, and (2) Egypt's role in sustaining patterns
      of U.S. domination in the Middle East. These questions
      are neither solely 'political' nor 'economic' but
      revolve primarily around which class rules Egypt and in
      whose interest the Egyptian state functions. The nature
      of Mubarak's rule cannot be separated from these
      questions, which is why the struggle against political
      despotism is inevitably inter-twined with the dynamic
      of class struggle. It is through this multifaceted
      understanding of class that these uprisings are best
      understood. An Expression of the Global Crisis

      Thousands of workers from several oil and gas companies
      are on strike, protesting in front of the Ministry of
      Petroleum, in Nasr City.

      The first illustration of the class character of these
      popular uprisings is their link to the chain of
      protests that have erupted over the last three years in
      the wake of the global economic crisis. This is the
      Arab world's response to that crisis and powerfully
      confounds the dominant narrative - unfortunately
      repeated by some radical economists - that the economic
      crisis was largely confined to the advanced capitalist
      core and that somehow the so-called 'emerging markets'
      had escaped the worst effects. Decades of neoliberalism
      have tied the Egyptian economy into the capitalist
      world market in a very uneven fashion and, as a
      consequence, the crisis was to have a devastating
      impact on the majority of the country's population.

      There have been a variety of mechanisms through which
      this transmission of crisis has taken place. First, the
      Middle East (and particularly the North Africa region)
      is highly dependent upon exports to Europe and these
      have fallen precipitously due to the drop in demand
      that followed economic contraction. World Bank figures
      show that Egypt's year-on-year growth rates of
      merchandise exports to the EU dropped from 33% in 2008
      to -15% by July 2009.[1] Similarly, Tunisia and Morocco
      saw the total value of their world exports fall by 22
      per cent and 31 per cent respectively in 2009 - leading
      the World Bank to note that these countries were facing
      the worst recessions in six decades.[2]

      A second transmission mechanism has been the
      curtailment of worker remittances on which the Middle
      East is highly dependent. In the case of Egypt, workers
      tend to migrate to the Gulf countries, Libya and
      Jordan. For the rest of North Africa, this labour
      migration tends to be toward Europe. Egypt is the
      largest recipient of remittances in the Middle East,
      representing approximately 5 per cent of national GDP.
      With the mass layoffs that continue to characterize the
      global crisis - particularly in sectors such as
      construction - remittances have fallen rapidly. Egypt
      experienced a massive contraction of 18 per cent in
      remittances from 2008 to 2009. For a region where these
      flows form the basic survival mechanism for millions of
      people, the decline has had devastating consequences.

      These effects also need to be placed alongside the
      other more recent feature of the crisis - the spiraling
      cost of basic food and energy items. There is no space
      to discuss the complex reasons behind this rising
      commodity inflation except to note that it is another
      aspect of the crisis itself - partially resulting from
      the large quantities of extra cash pumped into the
      system to ameliorate the crisis in the core countries,
      particularly the U.S. program of quantitative
      easing.[3] Once again, the effects have been magnified
      in much of the Middle East. In Egypt, annual food price
      inflation accelerated to 18.9 per cent in January 2011
      from 17.2 per cent in December. These rapid increases
      in prices are essentially a form of severe wage cuts
      for those segments of the population that are compelled
      to spend most of their income on basic items.

      But any mapping of this crisis needs to go beyond the
      immediate results of global slowdown and be situated
      within the three decades of neoliberal 'reforms' that
      Egypt has experienced. What neoliberalism has done is
      to make the country much more vulnerable to the crisis
      itself - massively widening the levels of inequality
      and, simultaneously, undermining potential mechanisms
      of social support. Precisely because of these outcomes
      of neoliberalism, the effects of the crisis were
      sharply concentrated on the most vulnerable layers of
      Egyptian society. At the same time, and this expresses
      the essential class character of the neoliberal
      project, a tiny elite benefited enormously from these
      economic measures.

      This reading of Egypt's neoliberal experience runs
      directly counter to the account of international
      financial institutions such as the IMF and World Bank.
      The IMF was to claim in February 2010, for example,
      that Egypt had been "resilient to the crisis" because
      "sustained and wide-ranging reforms since 2004 had
      reduced fiscal, monetary, and external vulnerabilities,
      and improved the investment climate." According to the
      IMF, the Egyptian government's successful
      implementation of neoliberalism had "bolstered the
      economy's durability and provided breathing space for
      appropriate policy responses."[4]

      The IMF finds evidence for Egypt's resilience in the
      relatively high GDP growth rates that the country has
      managed to sustain. From 2006 to 2008 growth was around
      7 per cent annually and in 2009, when much of the world
      was experiencing negative GDP growth, Egypt recorded
      4.6 per cent. But what this GDP-centric account does is
      to ascribe a general assessment of a country's health
      on the basis of aggregate macro-statistics. Embedded in
      this approach is the unspoken assumption that a growth
      trend at the aggregate level is good for the population
      as a whole. It hides the reality that capitalism is an
      exploitative system and the outcome of the unfettered
      market typically means that overall growth results in
      the widening of inequality. It is, in other words, a
      statistical expression of the 'trickle-down effect.'
      Egypt is a perfect example of the reality behind this
      myth: neoliberalism has produced rapid growth rates
      but, simultaneously, it has led to worsening living
      standards for the majority of the population and the
      increased concentration of wealth in the hands of a
      tiny minority (literally just a handful of families).

      According to official government statistics poverty
      increased from 20 per cent to 23.4 per cent from 2008
      to 2009. This in itself is a significant increase but
      official statistics need to be approached with a large
      degree of skepticism. The official poverty line is set
      at an absurdly low rate - in fact, some 40 per cent of
      Egyptians live on less than $2 per day. The official
      unemployment rate is recorded at around 9 per cent, but
      again the reality is completely different - more than
      half of those outside of agriculture are found in the
      "informal sector" and are not properly recorded in the
      unemployment statistics. These informal workers live in
      a society that lacks any decent social provisions for
      education, health or broader welfare. It is estimated,
      for example, that one-third of the Egyptian population
      is illiterate. The demographic question also looms
      large here. In a country where the leadership consists
      of men in their 80s, youth make up more than 90 per
      cent of the jobless.

      The onset of neoliberalism in Egypt is associated with
      the series of policy measures known as infitah
      (opening) that were launched in the 1970s under
      President Anwar Sadat. After Mubarak came to power
      following Sadat's assassination, successive governments
      continued the policy trajectory set by infitah. There
      were two prongs to this policy, particularly as it
      unfolded under the aegis of an IMF structural
      adjustment programme in 1990-91. First, a series of
      policies began to transform social relations in the
      rural areas. In 1992, Law 96 of the Egyptian Peoples'
      Assembly liberalized agricultural rents and allowed for
      the eviction of tenants by landowners after a five-year
      transitional period. Rents were raised threefold and -
      with the encouragement of international financial
      institutions such as the IMF and World Bank, and U.S.
      government bodies such as USAID - Egyptian agriculture
      shifted toward the type of export-oriented production
      that typifies much of African agriculture today.[5]
      Hundreds of thousands of Egyptians lost their ability
      to survive on the land and streamed into the informal
      sector of urban centers - particularly, but not only,
      into Cairo.

      Second, state employment began to be cut back
      dramatically with the privatization (wholly or in part)
      of 209 public sector companies (out of a total of 314)
      by 2005.[6] The number of workers in these public
      sector companies was halved from 1994-2001. In the
      banking sector, nearly 20 per cent of the banking
      system was transferred from public control to the
      private sector. The consequence of this wave of
      privatization - hailed by the IMF in 2006 as having
      "surpassed expectations"[7] - was a massive downgrading
      of working conditions and the further impoverishment of
      wide layers the Egyptian population. This was another
      contributing factor to the expansion of the army of
      informal workers that characterize Egyptian cities and
      have played such a critical role in the recent

      It is in response to these neoliberal measures - and
      the complicity of the official state-linked trade union
      movement - that independent forms of worker organizing
      emerged in an important wave of strikes in 2006-08.
      During 2006 there were 220 major strikes involving tens
      of thousands of workers in the largest strike wave that
      Egypt had seen in decades.[8] These strikes linked up
      with peasant movements, which aimed at resisting the
      loss of land due to the neoliberal measures described
      above. These earlier forms of organization and struggle
      have been a key element to the historical experiences
      underpinning the current wave of protests.

      But accompanying these neoliberal measures was its
      natural corollary: the concentration and centralization
      of wealth in the hands of a tiny layer of the country's
      elite. As Tim Mitchell has thoroughly described, a key
      feature of the 1990-91 IMF structural adjustment was
      the transfer of wealth to the private sector. The
      result was the strengthening of a handful of massive
      conglomerates - such as the Osman, Bahgat, and Orascom
      Groups - whose activities stretched across
      construction, import/export, tourism, real estate and
      finance.[9] It was this class that benefited from the
      privatization process, the access to cheap labour, the
      government contracts, and the other forms of largesse
      distributed through the channels of the state.

      The result of neoliberalism was the enrichment of a
      tiny elite concurrent with the immiseration of the vast
      majority. This is not an aberration of the system - a
      kind of 'crony capitalism' as some financial
      commentators have described it - but precisely a normal
      feature of capitalist accumulation replicated across
      the world.

      So while the outrage at the wealth of Mubarak and the
      state officials associated with his regime is well
      deserved, we must not forget that Mubarak - and the
      Egyptian state as a whole - represented an entire
      capitalist class. The result of neoliberalism was the
      enrichment of a tiny elite concurrent with the
      immiseration of the vast majority. This is not an
      aberration of the system - a kind of 'crony capitalism'
      as some financial commentators have described it - but
      precisely a normal feature of capitalist accumulation
      replicated across the world. The repressive apparatus
      of the Egyptian state was aimed at ensuring that the
      lid was kept on any social discontent arising from
      these worsening conditions. In this sense, the struggle
      against the effects of the economic crisis would
      inevitably be compelled to confront the dictatorial
      character of the regime. The Regional Dimension

      This uprising cannot be understood without situating it
      within the regional context. Once again, we can see
      here the intertwining of the political and economic.
      U.S. policy in the Middle East is aimed, first and
      foremost, at keeping the oil and petro-dollar rich Gulf
      states under its influence. This should not be
      interpreted as meaning that the U.S. wants to directly
      own these oil supplies (although this may be part of
      this process), but that the U.S. wants to ensure that
      the oil supplies remain outside of the democratic
      control of the people of the region. The nature of
      global capitalism and the dominant position of the U.S.
      state within the world market rests significantly upon
      its control over the Gulf region. Any move toward a
      broader democratic transformation of the region could
      potentially threaten U.S. power at a global level. This
      is why the U.S. so strongly supports the dictatorships
      that rule the Gulf states and also why the majority of
      the labour in the Gulf is performed by temporary,
      migrant workers who lack all citizenship rights and can
      be deported at any sign of discontent.

      All other relations between the U.S. and other
      countries in the region are subordinated and linked to
      this goal of U.S. hegemony over the Gulf region. This
      includes the U.S.-Israel relationship (which is why any
      talk of an 'Israel lobby' controlling U.S. foreign
      policy is nonsense). The U.S. sees Israel as a key
      pillar of its overall Middle East policy: it is an ally
      that is fully dependent upon U.S. military and
      political support and can always be relied upon to act
      against the interests of the Arab masses. Precisely
      because Israel has its origins as a settler-colonial
      state founded upon the dispossession of the Palestinian
      people, it is seen as a more stable and steadfast
      pillar of U.S. power than any of the Arab dictatorships
      that are exposed to threat of popular revolt. This is
      why the interests of Israel and the Arab dictatorships
      are coincident, not opposed to one another - as was so
      clearly illustrated in the recent uprisings of both
      Tunisia and Egypt.

      Beyond the Gulf states and Israel the third leg of U.S.
      power in the region is the reliance upon autocratic
      leaders such as Mubarak. But lying behind Mubarak (as
      with his predecessor Sadat) has always been the
      Egyptian military. U.S. linkages to Egypt have largely
      been constructed through the military and this is one
      of the key reasons why the military plays such a
      dominant role in the structures of the Egyptian state.
      The vast amount of military aid that Egypt receives
      from the U.S. (around $1.4-billion annually) is
      well-known as is the role that the military has played
      in supporting U.S. policy across the Middle East (the
      current head of the Supreme Council of the Armed
      Forces, Mohamed Tantawi, fought alongside U.S. troops
      in the 1991 Gulf War). The highest ranks of Egypt's
      military should properly be considered as part of the
      capitalist class with significant economic interests
      that overlap with the state and private sector.
      Precisely because of the military's central role in
      sustaining U.S. power regionally, and its own stake in
      the reproduction of Egyptian capitalism, any belief
      that the Egyptian military is 'part of the people' or
      'neutral and above politics' is a very dangerous

      Over the last two decades the linkages between the
      political and economic configuration of U.S. power in
      the Middle East has become even more explicit. United
      States policy has followed a two-pronged track that
      ties neoliberalism with the normalization of economic
      and political relations between the Arab world and
      Israel. The broader goal has been the creation of a
      single economic zone from Israel to the Gulf states,
      linked under the dominance of the USA. One of the
      mechanisms for reaching this goal has been a series of
      Free Trade Agreements (FTAs) signed between the U.S.
      and Arab states in the region (Morocco, Bahrain, Oman,
      Jordan, and Egypt) that, over time, would be knitted
      together in a single free trade area enabling the
      unfettered flow of capital and goods across the

      The bond between normalization and neoliberalism is
      powerfully illustrated in the character of these U.S.
      bilateral FTAs, which include as part of their
      conditions a requirement to lift any boycott or refusal
      to trade with Israel. In the case of Egypt (and Jordan)
      the link is more advanced than any other state in the
      region, and is best shown in the so-called Qualified
      Industrial Zones (QIZ). These QIZ provide duty free
      access to the U.S. market for Egyptian exports. But
      they contain the remarkable provision that a certain
      proportion of imports (around 12 per cent) must be
      Israeli in order to qualify for duty-free status. The
      Egyptian QIZ are concentrated in the textile sector,
      with 770 companies operating in the zones at the end of
      2009. Since the few short years of their existence they
      have grown to be a significant weight in Egyptian
      exports to the United States. Egyptian exports from the
      QIZ grew at an incredible 57 per cent annually between
      2005 and 2008, more than ten times the rate of Egypt's
      exports to the U.S. as a whole.[12] In 2010, QIZ
      exports made up more than 40 per cent of the value of
      all of Egypt's exports to the United States.[13]

      It is noteworthy that Egyptian activists have raised
      the demand during the recent uprising to shut down
      these QIZ. It would be a further powerful step to open
      the books of these QIZ - accurate and factual
      information about their operations are notoriously hard
      to come by and it would be a great service of the
      Egyptian people to reveal them to the world. It should
      also be noted that similar QIZ exist in the Jordanian
      context - with the added twist that many of the workers
      in the Jordanian QIZ are badly exploited migrants from

      These regional processes thus further confirm the
      impossibility of separating the 'economic' and
      'political' aspects of the current uprisings. The
      demand to cut ties with Israel and abrogate the
      regional agreements signed by Sadat and Mubarak are
      part-and-parcel of resisting the logic of neoliberalism
      and U.S. power in the region. The authoritarian nature
      of the state is a direct outcome of these regional
      processes and, for this reason, if it is to be
      successful, the struggle for greater political freedom
      must inevitably take up questions of confronting U.S.
      dominance of the region and the particular role Israel
      plays in sustaining that dominance.[14] Conclusion

      The story that has been told in much of the mass media
      and reinforced by the carefully-worded rhetoric of U.S.
      and European officials is that these demonstrations
      have primarily been a struggle to overthrow individual
      tyrants. There is, of course, a one-sided truth to
      this: protestors have taken aim at the individual
      personages of Ben Ali and Mubarak. But the claim that
      this is a struggle for 'democracy' acts to obfuscate
      more than clarify what these uprisings are about.
      Two-thirds of the Egyptian population is under the age
      of 30. This means that the vast majority of the
      Egyptian population has not only spent their entire
      lives under the rule of Hosni Mubarak; they have also
      endured a very brutal form of neoliberal capitalism.
      The demonstrations were a direct result of the naked
      class power embodied by Mubarak's rule. This was,
      perhaps, no more graphically illustrated than by the
      way in which the capitalist class essentially fled the
      country in the first few days of the uprising.[15]

      The anti-democratic character of the Egyptian regime is
      not accidental or a question of individuals, but rather
      the political form of capitalism in Egypt. It is the
      necessary way that capitalism functions in a society
      that is marked by astounding (and ever-widening) levels
      of inequality, and which is located in a region that is
      so central to the constitution of U.S. power at a
      global level. For this reason, the demand for
      democratic expression in societies characterized by
      decades of atrophied public space is one facet of a
      much broader struggle that pivots fundamentally around
      the question of class. Mubarak was the public face of a
      military government and removing that face does not
      change the character of military rule or the way in
      which that rule sustains the dominance of a particular
      class. The political form of the Egyptian state is not
      an ephemera. The role of the Egyptian military cannot
      be decisively reformed while leaving the structure of
      capitalism and its regional linkages unchallenged.

      This analysis runs precisely opposite to the rhetoric
      of Obama and other world leaders that whitewashes the
      West's decades-long support for Mubarak and claims that
      the Egyptian people's struggle was simply a question of
      political 'transition.' There is a furious attempt now
      on behalf of the Egyptian military and elite, the U.S.
      government and all their regional allies - including
      Israel - to separate the 'political' and 'economic'
      characteristics of the popular struggle and confine the
      struggle to simply a question of Mubarak. This is
      clearly demonstrated by media reports on 14 February
      that the military would outlaw strikes and other forms
      of independent worker organizing. But the struggle
      against the Egyptian dictatorship remains, in essence,
      a class struggle. This is not a matter of bombastic
      pronouncement or an empty political slogan, but an
      inescapable fact. *

      Adam Hanieh teaches in the development studies
      department at the School of Oriental and African
      Studies. He can be reached at ah92_at_soas.ac.uk.


      1. World Bank, Global Economic Prospects: Crisis,
      Finance and Growth (Washington: World Bank), p.142.

      2. World Bank, p.142.

      3. See: David McNally, "Night in Tunisia: Riots,
      Strikes and a Spreading Insurgency," The Bullet, N.
      455, 19 January 2011.

      4. IMF, Arab Republic of Egypt - 2010 Article IV
      Consultation Mission, Concluding Statement, 16 February
      2010, 2010.

      5. For a detailed description of this process, see: Ray
      Bush, "Civil Society and the Uncivil State Land Tenure
      Reform in Egypt and the Crisis of Rural Livelihoods"
      (United Nations Research Institute for Social
      Development), Programme Paper, N. 9, May 2004.

      6. Angela Joya, "Egyptian Protests: Falling Wages, High
      Prices and the Failure of an Export-Oriented Economy,"
      The Bullet, N.111, 2 June 2008.

      7. IMF, Arab Republic of Egypt: 2006 Article IV

      8. See Jamie Allison, "Wave of struggle shakes Egyptian
      regime," Socialist Worker, 7 April 2007.

      9. Timothy Mitchell, 'Dreamland: The Neoliberalism of
      Your Desires,' Middle East Research and Information
      Project (MERIP), N. 210, Spring 1999.

      10. Also see: Gilbert Achcar, "Whither Egypt?," The
      Bullet, N. 459, 7 Feburary 2011.

      11. See: Adam Hanieh "Palestine in the Middle East:
      Opposing Neoliberalism and US Power," The Bullet, N.
      125, 15 July 2008.

      12. Barbara Kotschwar and Jeffrey J. Schott, Reengaging
      Egypt: Options for US-Egypt Economic Relations,
      Peterson Institute for International Economics, 2008,

      13. Calculated from data at dataweb.usitc.gov.

      14. Moreover, any solidarity movements in support of
      regional struggles (such as Palestine) also tend to
      grow to encompass the nature of the political regime.
      It is no accident that the antecedents of this uprising
      are to be found in the protests that emerged in
      September 2000 in solidarity with the Palestinian
      intifada. At that time, as the Egyptian socialist
      Hossam el-Hamalawy has noted, students attempted to
      come out on to the streets but were crushed by the
      regime. See: Mark Levine, "Interview with Hossam
      el-Hamalawy," The Bullet, N. 456, 31 January 2011.

      15. It was reported in the early days of the uprising
      that Egypt's largest business owners flew out on 19
      planes to Dubai where they hoped to ride out the storm
      of the uprising.

      (((( The B u l l e t ))))~ * ISSN 1923-7871 *
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