EGYPT: Gov’t and World Bank Toss Aside Local Garbage Collectors

By Emad Mekay Reprint | | Print |

Analysis - By Emad Mekay

WASHINGTON, Mar 4 2003 (IPS) - If you are seeking a classic example of how the current patrons of the global economy – international financial institutions (IFIs), multinational corporations and corrupt governments – operate in a way that deprives the poor, while masterfully mismanaging huge amounts of potentially beneficial money, look to Egypt’s city of ”garbage collectors”..

The blindly pro-free market regime of President Hosni Mubarak is, again, turning to the World Bank and other international lenders for a 1.5-billion-dollar loan, part of which is likely to be used to pay off controversial contracts awarded in January to multinational waste management companies that have replaced the ‘Zabbaleen’, some 60,000 men, women and children, mostly from the country’s Christian Coptic minority, who live off of picking and recycling trash.

The new loan means that the government, which is supposed to represent its own citizens and not international lenders or foreign companies, is driving the country – which owes nearly 30 billion dollars – deeper into debt, forcing thousands of local trash collectors out of work and rerouting costly borrowed money back into the hands of foreign corporations, whose services could easily be replaced by local alternatives.

The Mubarak regime marketed the awarding of a contract to Spanish and Italian companies to collect Cairo’s garbage for 50 million dollar a year as a move towards "technological principles" and "scientific methods".

A long-time faithful disciple of the World Bank and the International Monetary Fund (IMF), the administration calls the local garbage collectors’ methods, which include using donkey-pulled carts, unsanitary and unhealthy.

The Cairo contracts follow a pilot programme initiated last year when the governor of the Mediterranean sea-port city of Alexandria, a former intelligence officer and a strong, loyal leader of the country’s ruling military regime, hired a French firm to heave its trash to a landfill for about 25 million dollars a year.

The Cairo move could drive up the cost of handling the city’s trash from two to three dollars a ton under the Zabbaleen to as much as 20 dollars a ton under the multinationals, according to Tarek Genina, an environmental consultant quoted in the ‘al-Ahram’ newspaper, Egypt’s largest daily.

”Why would any of the provinces seek foreign labour when there are armies of workers here?” Genina asked. ”The presence of those companies here is going to be at the cost of those who are already doing the job, mainly al-Zabbaleen.”

To ensure that the new costs are covered, local authorities have agreed to charge citizens for garbage collection on their utility bills, meaning that if they fail to pay the multinational trash removers, their power could be cut, wrote Mohammed Fahmy in the ‘al-Ahaly’ weekly.

”There are two kinds of con work and frauds,” he added. ”One of them is when the governments adds garbage collection fees to the power bill.”

The waste-management contract is controversial not only because it will put the Zabbaleen, acclaimed for their innovative recycling efforts, out of business but will also add to the country’s soaring unemployment rate – now officially at eight percent.

It could also add further fuel to public resentment of rising prices, which has led the government to contemplate imposing price controls, according to online Egyptian publications.

One of the Zabbaleen projects is a United Nations-funded Recycling School to resell plastic bottles to plastic manufacturers. Other recycling activities the group has developed include weaving leftover cotton scraps into rugs, altering scrap paper into stationery and picking cardboard boxes for recycling.

The contract to hire foreign companies could not have come at a more ill timed juncture for the country, which, with 70 million people, is the most populated in the Middle East and facing lethal economic woes.

It could be facing eight billion dollars in economic losses from the seemingly inevitable U.S. war on Iraq, Egypt’s largest trade partner, and additional slipping of the country’s local currency, the pound, as tourism revenues slide.

The spread of tension in the Middle East over the past three years as Israel stepped up its crackdown of the Palestinian uprising, compounded with a high level of official corruption and cutthroat currency speculation, has also helped create a roaring black market for the U.S. dollar.

Although the government caved in to pressure and devalued the pound in January – a move strongly applauded by the IMF – the currency continues its freefall, with the dollar going for 5.50 officially and seven pounds on the black market.

Economists expect some of the new World Bank money to be used to endorse the faltering pound and add liquidity to the banking system.

Yet as a result of the expensive waste-management contract and other local-foreign deals that span almost every sector of the economy – mostly inspired by the Washington financial institutions – the borrowed money will be going needlessly to foreign companies.

Such a trajectory would soon deplete the country’s reserves of about 15 billion dollars, leaving Cairo deeper in debt and further under the thumb of the international financial institutions.

As usual, the World Bank responds to finger-pointing by denying that it advises borrowers on specific measures – like hiring foreign trash companies – but those countries follow strikingly similar policies after receiving loans from the Bank and other IFIs.

Ironically, the Bank, whose officials say they are working "very closely" with Egyptian authorities, has failed piercingly in this instance to advise Egypt against "reckless spending" and against giving foreign companies much needed borrowed money at the expense of the poor.

That oversight debunks the rhetorical phrases sprinkled liberally throughout the Bank’s literature, like "supporting Egypt’s effort to reduce unemployment and poverty" and "raising living standards for all".

Because of the pounds’ woes, Egyptians are already reporting steep, and understandably, infuriating price increases of almost all basic goods and services.

Critics say that instead of putting thousands out of work, the Mubarak dictatorship could have saved the hard currency and used just a fraction of the 50 million dollars now destined for Spanish and Italian pockets to improve health care for the Zabbaleen, reinforce their education system and help them to develop more sophisticated collection systems.

With a fraction of this sum – a rule that could be applied in other similarly controversial projects – the regime could have sent hundreds of Egyptians to learn more about waste-management technology overseas, brought them back to teach even greater numbers of locals to set up their own local networks and community-based solutions.

Opting to hire foreigners, with money borrowed from the IFIs, with the blessing of the World Bank, is a high-definition, real-life lesson on how to keep the poor poorer.