ECONOMY: Egyptians Wake Up to an American ‘Son-Rise’

By Emad Mekay Reprint | | Print |

Emad Mekay

CAIRO, Jul 9 2003 (IPS) - Egypt is opening its gates to neo-liberal policies under pressure from the United States and international lenders, but many see this is a modern return to a feudal system.

Egypt, once a bastion of socialist and nationalistic policies under Gamal Abdel Nasser, its fabled leader of the 1950s and 1960s, is witnessing the biggest economic about-turn in its history, analysts say. Its 71 million people make Egypt the most populous country in the Arab world.

Some independent and opposition leaders call the aggressive march to free market economy a return to the feudal system where foreigners and a few domestic businessmen benefit at the expense of the rest of the people.

"The only common thread linking the new economic policies is that they give certain businessmen the chance to ransack national wealth, and drag the country into poverty," Abdel Halim Qandil, chief editor of the al-Arabi weekly told IPS.

In downtown Cairo, drivers have to deal with a new phenomenon: parking meters that operate through pre-paid magnetic cards. The private company that runs them charges 80 piasters (13 cents) an hour, the equivalent of the price of 16 loaves of bread an hour. A family of four can sustain itself on the equivalent of 10 loaves a day.

The once free public lavatories in the main squares of Cairo now charge 25 piasters.

These are only the more visible signs of change. From this week workers face a new labour law drafted partly with the help of the United States Agency for International Development (USAID), widely seen here as another arm of U.S. economic policies.

The law restricts the right to launch strikes or protest work conditions. Employers have been given new powers to determine wages, set work hours and fire workers.

On Sunday, Housing Minister Mohammed Ibrahim Solaiman said Egypt will start "restructuring" the water sector. That means breaking up the public sector service into smaller companies and selling them. The move will almost certainly mean costlier water.

In recent days security forces said they confiscated two million pirated audio tapes, in line with U.S. demands to enforce intellectual property rights. The government adopted a law last year for protection of intellectual property rights, but Egypt remains on the U.S. "priority watch list" for violations.

The government is also in the process of passing laws on banking and income tax that would change domestic regulations to suit demands by international lenders like the World Bank, the International Monetary Fund and the U.S.

The government is considering plans to sell more of the education sector and to place health services in private hands. Some customs tariffs are being dropped, and procedures streamlined to bring Western technology into port management.

For the future, the most telling sign is the man being groomed to succeed President Hosni Mubarak. Gamal Mubarak, his son, has said publicly that Egypt’s future lies in prescriptions from Washington.

During a controversial speech in May, the 39-year-old younger Mubarak reiterated his commitment to the so-called economic reform programme, and said the poor should not expect subsidies or free services.

"It will be impossible to continue to offer free education for ever," he said. He cited the floatation of the Egyptian pound, and normalising of relations with Israel as examples of pragmatic policies, even though such policies have proved unpopular.

The President now appoints his son to official positions and missions, most recently as head of a delegation that returned from Washington last week. The son now heads the influential Policies Committee of the ruling National Democratic Party (NDP).

The young Mubarak is moving firmly to establish his grip on power. His entourage of entrepreneurs includes Ahmed Ezz, a young business leader who made a part of his fortune exporting steel to the United States. Ezz heads the budget committee of the pro-regime parliament.

Hossam Badrawi, another businessman favoured by young Mubarak now heads the education committee of parliament. Badrawi wants to change the education curriculum to suit U.S. demands to remove perceived anti-Israeli and anti-American sentiment from textbooks.

"This is not the time for academics, intellectuals or other professionals," Mohammed Eidarous, a journalist with the semi-official daily al-Gomhorieya told IPS. "This is the time for businessmen. And it will also be their future."

The Mubarak regime and the semi-official press miss no chance to reiterate the regime’s commitment to a capitalist system along the lines prescribed by the IMF and the World Bank.

"Egypt is a capitalist state", runs the headline of a column in the government daily al-Ahram. The author of the article, Abdul Moneim Saeed, heads the al- Ahram Centre for Strategic Studies, a think tank closely associated with the Mubarak regime.

"In statements by the government and its ministers, either collectively or individually, there is no solution for Egypt’s chronic problems until Egypt moves to a competitive capitalist society," Saeed wrote.

Businessmen and pro-market writers often present their neo-liberal views unchallenged on state-owned television.

"The centre of this country has turned Egypt into a mailbox that receives orders, recommendations and wish lists from the United States," says Qandil. "The international institutions and Washington have led the destruction of our public sector and are responsible for price hikes and for spreading poverty."