Translator Introduction
This article examines the neoliberal processes in a large country such as Egypt, which has followed the approach of economic liberalization since the early eighties until the present time.
The report, in turn, shows these processes through three axes: the axis of privatization, the axis of decentralization, the minimum level of oversight and government intervention, and finally the axis of dismantling the social welfare state in Egypt.
All of this - from the perspective of the article - led to a class explosion, which found its maximum expression in the (January) 2011 uprising.
The report represents an advance in the political economy of the Egyptian revolution, if you will.
Report text
Egypt has long been a beloved country in the Middle East and North Africa region.
Since the 1980s, Egypt, under the tight control of President Hosni Mubarak, has been hailed by Western donors as a neoliberal success story that the World Bank has ranked as the "world's greatest reformer" for four consecutive years.
The US government alone has distributed nearly $114 billion in economic and military aid to Egypt due to its geo-strategic importance and regional influence, most of which was dependent on the implementation of neoliberal reforms.
However, from a Marxist perspective, Egypt embodies many of the negative effects of neoliberal reform on the dependent class dynamics. Neoliberal policies often (intentionally) presuppose an insufficient understanding of national development needs, de-prioritize participatory methodology, and fail to address the structural underpinnings that create turmoil within a developing country. As such, between 1980 and 2010, the Egyptian elite successfully implemented neoliberal economic policies while maintaining political dominance through the exploitation of middle- and working-class citizens. This enabled the Egyptian elite to implement a form of crony capitalism by directing state resources into the hands of the few at the expense of the many, further exacerbating the class differentiation within society.
During the Egyptian revolution, 5% of the country's elite controlled 40% of the wealth, and the government was teeming with prominent businessmen and wealthy families who pledged to accumulate wealth, and the new hereditary political power (Getty Images)
The majority of the population who participated in the Egyptian revolution in 2011 did so in the light of massive marginalization and deprivation that their country sought to accumulate through expropriation and reforms that failed to “touch” with the masses. Based on these assertions, this article seeks to trace the effects of the reform of Egyptian neoliberal social and economic policies since the 1980s by examining the historical basis of the “bread, freedom, and social justice” cry heard during the 2011 revolution. This includes the privatization of industry, the decentralization of government, and the dismantling of the social welfare state. By exploring the different theoretical underpinnings of neoliberal policies, the article will show how the demands of the Egyptian masses can be viewed as incompatible with neoliberalism.Under these circumstances, one can derive the ideal conditions and class dynamics for the revolution in Egypt.
Egypt's neoliberal transformation
Essentially, the emergence of neoliberalism represented a broader ideological shift after three decades of the "golden years" under Keynesian economics over the latter part of the twentieth century.
This was an abandonment of the developmental state, and a reaffirmation of market-oriented liberalization as the single most important element for the healthy development of the state.
While liberalism is seen as a spontaneous and efficient market in light of the application of universal rules, the term neoliberalism can be closely linked to David Harvey's definition, where:
“Liberalism is first and foremost a theory of political-economic practice that proposes that the best human well-being can be achieved by liberalizing individual freedoms of organization and skills within an institutional framework, characterized by strong private property rights, free markets and free trade. Hence, the role of the state is to create, maintain, An appropriate institutional framework for such practices… But outside these practices, the state should not take risks.” With this definition, neoliberalism includes a broader range of elements including the reshaping of political and social dynamics within society. To this end, in order to implement the economic aspects of neoliberalism, a reorientation of the state is often required, acting as a facilitator and remaining separate in the way the state governs, administers policies and services, and interacts with citizens.
Prior to 1980, the Egyptian government followed a highly nationalistic, developmental approach to nation building. The period, often called “Egyptianization,” closely followed Keynesian economic theory, which emphasized the necessary role of the state in providing equal access to work and social programs for citizens. With this interpretation, Egyptian President Gamal Abdel Nasser nationalized large parts of the state, including land and industry, with strong social welfare programmes. Many Egyptians still represent this period, when unemployment and inflation reached record levels in light of Nasser's vision of "social justice, progress, development and dignity". The progress was recognized internationally, and the World Bank began comparing Egypt's development approach with the success of emerging markets such as South Korea.
When Mubarak took power, Egypt had increasing foreign debt; Separating the classes, the International Monetary Fund and the World Bank introduced a series of macroeconomic reforms that would restructure the Egyptian economy.
After the end of Nasser's presidency, the state's priorities began to shift. The goal of President Anwar Sadat's openness was to modernize development and remove what he interprets as an oppressive government restriction on economic growth. By adopting a Weberian model of the state through the dissolution of state ownership, Sadat's openness reversed the large-scale nationalization programs established under the Nasser regime. Meanwhile, the Egyptian government began a large-scale build-up via expropriation that led, in part, to huge foreign debts, corruption, and poverty throughout the country. Then, as a desperate means of overcoming the foreign debt and financial shock, President Mubarak took office and led the Egyptian state to formalize its alliance with the United States, adopting many of the neoliberal policies outlined in the Washington Consensus. This would mark the beginning of the polarization of classes that would grow over the next 30 years that would eventually culminate in the Egyptian revolution of 2011.
Although it is not within the scope of this report to study the entirety of neoliberal policies and their effects on the widening social and class gap within Egyptian society, the following three sections will detail aspects of Egypt's adoption of neoliberal policies starting in the eighties.
As such, it will rely on various economic, political and social aspects to reorient the state, which is equivalent to every reform by widening the class divide, and as a contribution to the formation of the demands of 2011, i.e. "bread, freedom, and social justice."
privatization
Egypt's first and most comprehensive reforms were implemented through the privatization of state-owned real estate enterprises. When President Mubarak took power at the end of the 1970s, Egypt had increasing foreign debts, increasing internal inequality, the separation of classes, and the continuing disappointment of citizens in the role of the state. Indeed, under these circumstances, Mubarak and the United States knocked on the door of the Economic Reform and Structural Adjustment Program (ERSAP). Within the framework of this program, the International Monetary Fund and the World Bank presented a series of macroeconomic reforms that would restructure the Egyptian economy. This included cashing out large portions of state-owned enterprises in order to reduce external debt, improve economic growth for stagnant businesses, and achieve economic stability.
Through the implementation of these initiatives, 118 of the largest companies in the country were privatized in favor of competition, including those related to electricity, water, sanitation, irrigation, health care, transportation, communications and education.
By the end of the 1990s, the program of economic reform and structural adjustment was recognized as a widespread success program in restoring economic prosperity to Egypt, with large portions of the proceeds going to the Ministry of Finance to reduce the budget deficit.
In this way, the International Monetary Fund ranked the implementation of privatization initiatives in Egypt as the fourth successful initiative globally.
Job opportunities declined significantly, workers were increasingly ostracized and exploited, and with food prices rising as a result of export dependence, the separation of class dynamics grew.
However, the privatization of state firms slashed employees and overhead costs to make firms competitive in the market, and more than half of all state employees were fired between 1994 and 2001. Corporate privatization enabled the Mubarak administration to socialize losses and privatize gains, often through private and public partnerships that contracted with portions of companies and materialized by removing regulations and barriers to investment. This initiative continues to push large numbers of workers into the informal sector, which has left them outside the traditional organization and protection from the state, thus depriving them of rights and lowering wages.
From Foucault's perspective, these citizens were to be transformed into empowered labor participants through governance and the dispossession of livelihoods, seen "not as a burden, but as a potential resource". Instead, those newly empowered citizens, who were expected to self-legitimize participating in the privatized economy, "did not have the capacity to centralize...due to the deteriorating socio-economic conditions."
In this way, the privatization of industry demonstrates the ideological shift in the state from accountability to citizens to accountability to the market.
Increased exploitation and labor extraction through liberated industry enabled further accumulation of wealth and surplus that was simply redirected into the hands of the elite.
Job opportunities declined significantly, workers were increasingly ostracized and exploited, and with food prices rising as a result of export dependence, the separation of class dynamics grew.
In fact, the demands we heard in 2011 for “bread” stemmed from these circumstances.
Decentralization and Good Governance
During the Egyptian revolution, 5% of the country's elite controlled 40% of the wealth, and the government was remarkably teeming with prominent businessmen and wealthy families who pledged to accumulate wealth, and the new hereditary political power. The 1990s marked the second wave of privatization and economic reform driven by good governance programs and the post-Washington consensus that aims to undo the centralization of the state and encourage governments to work "closer to the people." However, there was an absence of real political reform amid the strengthening of economic policies, and the same political party continued to dominate the government through IMF reforms in Egypt.
Here, in close contact with David Harvey's interpretation of neoliberalism, the state will act as a "facilitator" through the decentralization of governmental responsibility and targeted institutional reform.
However, in many cases, despite the decentralization of the state, whether vertically to local governments, or horizontally to NGOs, private companies, and non-state actors, basic political power has remained (intentionally) at the core of central state domination.
The Egyptian people did not have an official way to present opinions related to government reform, and thus the Egyptian public called for “freedom” in their revolution.
To this extent, the adoption of good governance and a pro-democracy agenda has often been criticized for allowing elite businessmen and politicians to benefit from privatization and neoliberal reforms embodied in the behavior of wealth accumulation and the legitimization of their rule. Hence, by redirecting governmental responsibility, “comprehensive neoliberal” reforms based on the new institutional economy created a “democratic deficit” in Egyptian society. Moreover, the country had been in a state of emergency since 1967, enabling the state to operate outside the rule of law through a form of state of exception to constrain schisms among citizens, limit freedom of assembly, and enable government oversight. Although this concept was not new under neoliberalism, it enabled the state through governance to “manage things”, so that “people will do, according to their self-interest, what they ought to do.”, which limits freedom to a restricted and predetermined space.
As a result, democracy was reduced to “techno-institutional,” leaving little to no real debate and integration, and excluding other forms of political orientation.
Add to this the objective of the restrictive political space developed during that time to “rein in a raging country” without opening the door for significant political reform and without reforming the corrupt system of checks and balances within the government.
This has led to the creation of "low density democracy", ie encouraging limited democratic participation and promoting social welfare only to the extent necessary for neoliberal policies to flourish, and fails to encourage popular political participation in a meaningful way.
Under these circumstances, the Egyptian people did not have an official way to present opinions regarding government reform, and thus the Egyptian public called for "freedom".
Dismantling the welfare state
Under neoliberalism, the idea of the social welfare state, which is the cornerstone of development policies that encouraged the state to distribute basic rights to citizens and make them available on an equal basis, was abandoned. With this mentality, with the decline of the state and the privatization of large parts of state companies, the IMF's Political Reform and Structural Adjustment Program revealed deep cuts to social welfare, pensions, and subsidies. In fact, this shift represents the broader ideological transition in the role of the citizen within the state. While the idea of social justice under the developmental state represents the fair and equal distribution of collective goods by the central government, it was expected under neoliberal social policies that the self-interested economic being would compete for limited resources, stimulating growth through the involvement of important actors Direct and induce their independent will to survive.
Middle and working-class citizens have called for "bread, freedom and social justice" as an escape from the exclusionary tendencies of neoliberal political reform since the 1980s (Getty Images)
In the midst of high unemployment and inflation rates, diminishing state protection and social welfare, and the absence of liberal democracy, I say, the Egyptian citizens demanded a renegotiation of the social contract with the state during the revolution.
In light of the decentralization and privatization reforms, minorities, women, and the working class in society suffered greatly, afflicted by the extractive nature of the country's political elite.
This deficit led to an increase in labor unions across the country since the 1970s, when they were seen as a social force to counter the repressive character of the Mubarak regime.
To this extent, the unions issued a statement about their demands for greater social justice after the Egyptian revolution.
These demands included minimum and maximum wages, decriminalization of workers, the right to form a federation independent of state-run unions, an end to corruption, expansion of health care and social programs, and housing, education, and medical treatment.
Social inequity is epitomized by the state's limited ability to provide benefits to the poor by phasing out programmes. Among these are stipulated subsidies that are often limited in scope, quantified, and fail to reach the poorest of the poor.
Under these circumstances, the Egyptian people demanded "social justice".
Revolutionary Consequences
From a Marxist perspective, the application of liberal ideology and neoliberal reform exacerbated class dynamics, increased economic inequality, and encouraged state capture. In this sense, the Egyptian state under neoliberalism was able to “provide Egyptians with growth without equality, education without inspiration, employment without security, health services without care, and voting without any real impact on the political process.” Moreover, privatization processes in Egypt enabled elite bureaucrats to transfer sponsorship to the private sector without “undermining state power as the ultimate source of rent.”
As a result, the decline of the middle classes and the working class through income redistribution methods favored the “system-linked capitalist employers”, and for the first time members of the middle and working class joined the protest as early as 2011. According to David Harvey, the emergence of anti-capitalist movements It binds the working middle classes, which are "formed by a broad coalition of the disaffected, the alienated, the excluded and the dispossessed".
The shift from a developmental state to neoliberalism exacerbated social inequality and poverty across the country.
Citizens protested against high rates of inflation and unemployment among the socio-economic sectors, increased human rights violations and repression, and reduced access to basic care services across the country.
It was under these circumstances that the “Two Egypts” emerged, allowing Egypt to operate under the banner of “supply politics” by distributing two visions of the state, which is viewed by the international community as a stable, prosperous and advanced state and through the aggressive and oppressive experiences of the poor.
The economic liberalization initiatives that boosted GDP and growth rates were cheered and celebrated by the international community that assumed a Weberian top-down view of development.
The fundamental institutions of neoliberal reform led to increased class dynamics that are often overlooked when considering neoliberal reform.
Accordingly, the economic and political reforms inside Egypt since the 1980s have led to the emergence of two disaffected classes: the middle class, which has become increasingly discontented with the regime and the deterioration of political and civil rights in the country, and the working class, which has been directly affected by neoliberal reform through its expulsion and dispossession. As such, the height of discontent and the marginalization of class divisions within the country can be seen as closely related to the implementation of various economic, political and social aspects of neoliberal policies over the past thirty years. Also, in this way, the two-sided dynamics that surrounded the Egyptians led to the interdependence between “poverty, wealth, accumulation, dispossession, domination, and oppression,” which culminated in the Egyptian revolution of 2011. Under these circumstances, citizens of the middle and working classes called for “bread, freedom, and social justice.”As an escape from the exclusionary tendencies of neoliberal political reform since the 1980s.
Conclusion
When examining the application of neoliberal policies in Egypt, one can clearly see the retentive nature of the basic world systems mentality.
As the core class continued to implement economically exploitative policies through resource extraction, elite bureaucrats retained their political and economic monopoly through the behavior of wealth accumulation.
The core institutions of neoliberal reform—i.e. privatization, decentralization, good governance, and the dismantling of the welfare state—added to the class dynamics that are often overlooked when looking at neoliberal reform from a Weberian, Westernized perspective.
When viewed more broadly, the effects of neoliberal reform and its tendency to create "unequal, institutionally hybrid, and unstable" forms of governance have exacerbated class tensions through a failed distribution of wealth that can be seen around the world.
Similar conditions can be seen in other countries, where many suffer from economic exclusion and exacerbation of class dynamics as a result of the implementation of neoliberal policies after the Cold War, which has led to the global expression of neoliberal discontent and the importance of neoliberal alternatives.
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Translated from: (E-IR)