Egyptian army units block a road in Cairo, Feb. 6, 2011. Credit: IPS/Mohammed Omer

By Emile Nakhleh
WASHINGTON, Dec 3 2014 (IPS)

The acquittal of former Egyptian President Muhammad Hosni Mubarak is not a legal or political surprise. Yet it carries serious ramifications for Arab autocrats who are leading the counterrevolutionary charge, as well as the United States.

The court’s decision, announced Nov. 29 in Cairo, was the last nail in the coffin of the so-called Arab Spring and the Arab upheavals for justice, dignity, and freedom that rocked Egypt and other Arab countries in 2011.If the United States is interested in containing the growth of terrorism in the region, it must ultimately focus on the economic, political, and social root causes that push young Muslim Arabs towards violent extremism.

Chief Judge Mahmud Kamel al-Rashidi, who read the acquittal decision, and his fellow judges on the panel are holdover from the Mubarak era.

The Egyptian judiciary, the Sisi military junta, and the pliant Egyptian media provided the backdrop to the court’s ruling, which indicates how a popular revolution can topple a dictator but not the regime’s entrenched levers of power.

Indeed, no serious observer of Egypt would have been surprised by the decision to acquit Mubarak and his cronies of the charges of killing dozens of peaceful demonstrators at Tahrir Square in January 2011.

Arab autocrats in Egypt, Saudi Arabia, Bahrain, the United Arab Emirates, and elsewhere have worked feverishly to stamp out all vestiges of the 2011 revolutions. They have used bloody sectarianism and the threat of terrorism to delegitimise popular protests and discredit demands for genuine political reform.

The acquittal put a legal imprimatur on the dictator of Egypt’s campaign to re-write history.

Following the 2013 coupe that toppled President Mohamed Morsi, who is still in jail facing various trumped up charges, Arab dictators cheered on former Field Marshall and current President Abdel Fattah al-Sisi, lavishing him with billions of dollars. They parodied his narrative against the voices—secularists and Islamists alike—who cried out for good governance.

Regardless of how weak or solid the prosecution’s case against Mubarak was, the court’s ruling was not about law or legal arguments—from day one it was about politics and counter-revolution.

The unsurprising decision does, however, offer several critical lessons for the region and for the United States.

Removing a dictator is easier than dismantling his regime

Arab authoritarian regimes, whether dynasties or presidential republics, have perfected the art of survival, cronyism, systemic corruption, and control of potential opponents. They have used Islam for their cynical ends, urged the security service to silence the opposition, and encouraged the pliant media to articulate the regime’s narrative.

In order to control the “deep state” regime, Arab dictators in Egypt and elsewhere have created a pro-regime judiciary, dependable and well-financed military and security services, a compliant parliament, a responsive council of ministers, and supple and controlled media.

Autocrats have also ensured crucial loyalty through patronage and threats of retribution; influential elements within the regime see their power and influence as directly linked to the dictator.

The survival of both the dictator and the regime is predicated on the deeply held assumption that power-sharing with the public is detrimental to the regime and anathema to the country’s stability. This assumption has driven politics in Egypt, Saudi Arabia, Bahrain, the United Arab Emirates, and several other countries since the beginning of the Arab Spring.

In anticipating popular anger about the acquittal decision, Judge Rashidi had the temerity to publicly claim that the decision “had nothing to do with politics.” In reality, however, the decision had everything to do with a pre-ordained decision on the part of the Sisi regime to turn the page on the January 25 revolution.

Dictatorship is a risky form of governance

Authoritarian regimes across the Arab world are expected to welcome Mubarak’s acquittal and the Sisi regime’s decision to move away from the pro-democracy demands that rocked Egypt in January 2011.

Bahrain’s King Hamad, for example, called Mubarak the day the decision was announced to congratulate him, according to the official news agency of the Gulf Arab island nation.

The New York Times has also reported that the Sisi regime is confident that because of the growing disinterest in demonstrations and instability, absolving Mubarak would not rile up the Egyptian public.

If the Sisi regime’s reading of the public mood proves accurate, Arab autocrats would indeed welcome the Egyptian ruling with open arms, believing that popular protests on behalf of democracy and human rights would be, in the words of the Arabic proverb, like a “summer cloud that will soon dissipate.”

However, most students of the region believe Arab dictators’ support of the Sisi regime is shortsighted and devoid of any strategic assessment of the region.

Many regional experts also believe that popular frustration with regime intransigence and repression would lead to radicalisation and increased terrorism.

The rise of Islamic State (ISIS or IS) is the latest example of how popular frustration, especially among Sunni Muslims, could drive a terrorist organization.

This phenomenon sadly has become all too apparent in Egypt, Bahrain, Syria, Iraq, Yemen, Libya, Algeria, and elsewhere. In response to popular resistance, however, the regimes in these countries have simply applied more repression and destruction.

Indeed, Sisi and other Arab autocrats have yet to learn the crucial lesson of the Arab Spring: People cannot be forced to kneel forever.

Blowback from decades of misguided U.S. regional policies

Focused on Sisi’s policies toward his people, Arab autocrats seem less attentive to Washington’s policies in the region than they have been at any time in recent decades.

They judge American regional policies as rudderless and preoccupied with tactical developments.

Arab regimes and publics have heard lofty American speeches in support of democratic values and human rights, and then seen US politicians coddle dictators.

Time after time, autocrats in Egypt, Saudi Arabia, Bahrain, and Syria have also seen Washington’s tactical policies in the region trump American national values, resulting in less respect for the United States.

Yet while Mubarak’s acquittal might soon fade from the front pages of the Egyptian media, the Arab peoples’ struggle for human rights, bread, dignity, and democracy will continue.

Sisi believes the US still views his country as a critical ally in the region, especially because of its peace treaty with Israel, and therefore would not cut its military aid to Egypt despite its egregious human rights record. Based on this belief, Egypt continues to ignore the consequences of its own destructive policies.

Now might be the right time, however, for Washington to reexamine its own position toward Egypt and reassert its support for human rights and democratic transitions in the Arab world.

If the United States is interested in containing the growth of terrorism in the region, it must ultimately focus on the economic, political, and social root causes that push young Muslim Arabs towards violent extremism.

The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, IPS-Inter Press Service.

Edited by Kitty Stapp

Excerpt:

The wages of Egypt's poorest workers have failed to keep up with rising living costs. Credit: Cam McGrath/IPS

By Cam McGrath
CAIRO, Oct 1 2013 (IPS)

Egyptian workers who mobilised during the 2011 uprising that toppled the regime of Hosni Mubarak have used the past two and a half years to organise into unions, press for labour reforms, and strike for better wages and working conditions.

But they face an uphill battle against a state that continues to restrict labour freedoms and to promote Egypt as a cheap-labour, business-friendly destination.

“Nothing has changed,” says journalist and labour activist Adel Zakaria. “The government is still not willing to give workers their rights… and overlooks labour violations under the pretext of attracting investment.”

Mubarak’s authoritarian regime (1981-2011) kept the country’s labour force under tight control, using its monopoly on union organisation to prevent collective action and mobilise workers to support the ruling party during election campaigns. The state flagrantly ignored its commitments to international labour treaties, denying workers basic rights and dispatching security forces and hired thugs to back employers during labour disputes.

Political economist Amr Adly says the regime’s neo-liberal economic policies and hugely unpopular privatisation programme pleased World Bank and IMF officials, but resulted in high unemployment and widening disparities between rich and poor.

“The economy was growing rapidly but the wealth concentrated at the top without any trickle down,” Adly told IPS. “The majority were excluded from the country’s economic growth.”

By 2011, on the eve of the mass uprising that toppled Mubarak, nearly a quarter of the population lived below the poverty line, and millions worked in a huge parallel economy where job security is absent.

Nearly two million Egyptians subsisted on the monthly minimum wage of 35 Egyptian pounds (about five dollars at today’s rate), the bulk of their salary coming from a series of bonuses and benefits that employers routinely withheld or used as leverage.

The twilight years of Mubarak’s rule saw a surge in the number of labour strikes as workers defied the state to demand unpaid bonuses and a livable wage.

“The labour protests were part of the social and economic discontent that led to the revolution,” says Adly.

Mubarak’s successors – both the Muslim Brotherhood and the ruling military junta – have continued to push his economic policies, working to contain labour unrest rather than address its underlying causes.

A 2009 International Labour Organisation (ILO) study showed that Egypt’s wages were among the lowest of 72 countries surveyed. The average monthly salary of 542 dollars put the country on par with Mexico and Thailand, and was less than a third of the average in Turkey.

Economic conditions have continued to deteriorate, whittling away at paychecks and pushing the national poverty rate to a record 25.2 percent last year. Political instability has spooked investors and devastated the tourism sector, previously the country’s biggest foreign revenue earner.

Government figures show the unemployment rate has climbed from nine percent before the 2011 uprising to over 13 percent, with more than a quarter of the country’s youth out of work. Inflation has averaged 10 percent, raising living costs and putting pressure on the country’s most disadvantaged citizens.

“There has been no attempt to link wages to rising living expenses,” says labour activist Zakaria. “Most Egyptians are worse off now than before the revolution.”

The 2011 uprising brought a heightened awareness of labour rights to workers, who have used the chaotic transition since Mubarak’s downfall to organise into thousands of independent trade unions, challenging the hegemony of state-controlled syndicates.

The free unions – estimated to represent nearly three million workers in this country of 85 million people – have been at the forefront of a wave of strikes that has grown in size and scope.

Zakaria says the emerging labour movement has empowered workers and increased their leverage. Last year there were a record 2,000 collective worker actions, with protests calling for better wages, payment of overdue bonuses, and the reinstatement of unfairly sacked employees.

Workers have also called on the government to abolish Mubarak-era labour laws and establish wage controls.

“Not all [strikes have been] successful, in fact many have failed,” Zakaria told IPS. “But since the revolution the government and employers have been more inclined to negotiate with workers, instead of beating them into submission – though they still do that too.”

In October 2011, the government caved in to pressure and revised the minimum wage for the first time in 25 years. It was a hollow victory for labour groups, which were disappointed by the decision to set the wage at 700 Egyptian pounds (102 dollars), less than half of what they had campaigned for.

The government recently pledged to increase the minimum monthly wage for six million public sector workers to 1,200 Egyptian pounds (174 dollars), but rejected calls to extend it to the 19 million employees in the private sector.

Fatma Ramadan, a board member of the Egyptian Federation of Independent Trade Unions (EFITU), says the government has made some adjustments to public sector wages, but continues to provide cover for exploitative private employers, fearing worker concessions could push investors toward cheaper and more servile labour markets.

The average weekly pay of government and public sector workers grew 29 percent in 2012 to reach 845 Egyptian pounds (124 dollars), according to the Central Agency for Public Mobilisation and Statistics (CAPMAS). Private sector salaries saw piecemeal increases, but largely stayed the same, according to official information.

“The military and feloul (remnants of the old regime) have worked to keep workers from exercising their rights, including the right to organise into unions or strike,” says Ramadan. “They have claimed that strikes are hurting the economy, but it is not for workers to forfeit their rights in order to protect the interests of business tycoons.”

The killing of Muslim Brotherhood supporters has only strengthened resolve within the party to resist the current regime. Credit: Khaled Moussa al-Omrani/IPS

By Adam Morrow and Khaled Moussa al-Omrani
CAIRO, Aug 23 2013 (IPS)

The ongoing crackdown on Egypt’s Muslim Brotherhood and supporters of ousted president Mohamed Morsi has prompted some analysts to warn of the apparent resurgence of the Mubarak-era police state.

“Since the Jul. 3 military coup against President Morsi, we’ve seen what can only be described as a return of the police state,” Seif Abdel-Fattah, professor of political science at Cairo University and former Morsi aide (who resigned from the post last November), told IPS.

“We’ve now reverted to Mubarak-era fascism, replete with killing demonstrators, raiding homes [of political activists], emergency laws and perpetual surveillance,” said Abdel-Fattah, who is not affiliated with the Muslim Brotherhood.

Since Morsi’s ouster, hundreds – possibly thousands – have been killed by security forces, including Brotherhood members and others opposed to renewed military rule.

On Wednesday Aug. 14, hundreds of demonstrators were gunned down in a violent dispersal of a pro-Morsi protest in Cairo’s Rabaa al-Adawia Square.

The authorities say that scores of security personnel have been killed in clashes with “armed demonstrators” and in attacks by “militants”.

Speaking on Monday (Aug. 19), social solidarity minister Ahmed al-Borei defended the methods used by security forces to disperse pro-Morsi protests, alleging that demonstrators at Rabaa al-Adawiya were armed and had posed a “threat to national security.”

Following the bloody protest dispersal and the angry demonstrations that came in its wake, the government announced a month-long state of emergency, including an 11-hour daily curfew. A staple of Mubarak’s 30-year rule, Egypt’s emergency law allows police to make arrests without charge and search homes without warrant.

This week, authorities rounded up hundreds of Brotherhood members nationwide, along with figures from allied Islamist groups, such as Egypt’s Gamaa Islamiya. At least 1,000 high- and mid-ranking Brotherhood members are reported to have been arrested to date.

On Tuesday (Aug. 20), Muslim Brotherhood leader Mohamed Badie was arrested in Cairo and charged with “inciting violence”. His trial has already been set for later this month and he reportedly faces the death penalty if convicted.

“Carrying out mass arrests in such a manner…constitutes nothing less than a return to the Mubarak era, the emergency state, media lies and fabrications,” Gamaa Islamiya declared in a statement.

It went on to note that senior group member Mustafa Hamza had been arrested by “dawn visitors” who raided his home in Egypt’s Beni Sueif province, “taking him from his family without levelling any charges.”

“Dawn visitors” is a Mubarak-era term used to describe early morning raids by security forces on the homes of the regime’s opponents.

The military-backed government, insisting that it is “fighting terrorism,” blames the Brotherhood for a series of attacks on security installations and personnel in the restive Sinai Peninsula.

On Monday, the government announced that 25 policemen had been killed by “suspected militants” near the North Sinai city of Rafah.

The Brotherhood has condemned the violence in Sinai, denying any involvement or that of its Islamist allies. It also strenuously denies any connection to a recent spate of attacks on Christian churches, and has continued to call for strictly peaceful means of protest.

State media organs, meanwhile, along with most of their privately-owned counterparts, have consistently portrayed pro-Morsi demonstrations as “violent” threats to the general public – while providing little credible proof in support of their claims.

Last year Brotherhood candidate Morsi became Egypt’s first-ever freely elected president. On Jul. 3 of this year he was overthrown by the head of the powerful military establishment Abdel-Fattah al-Sisi, head of military intelligence under Mubarak, amid massive and well-coordinated demonstrations against his presidency.

Morsi, who faces a raft of criminal charges his supporters say are politically motivated, has been held at an undisclosed location ever since.

Morsi’s opponents call his ouster a “second revolution” along the lines of Egypt’s January 2011 uprising, which ostensibly ended the Mubarak regime.

But Morsi’s supporters call it a “military coup” against a democratically elected president; a “counter-revolution” by Mubarak’s “deep state” which they say has remained deeply entrenched in Egypt’s judicial system, media institutions, intelligence apparatus and security services.

Fears of looming oppression – especially of Islamists – were stoked last month when interior minister Mohamed Ibrahim announced the reactivation of a Mubarak-era police unit devoted to monitoring and combating “religious extremism”. The unit had been part of Mubarak’s dreaded state security apparatus, known for committing gross rights violations, especially against the regime’s Islamist opponents.

Last week Ibrahim went further, vowing to provide levels of “security” unseen since before Egypt’s Jan. 25, 2011 uprising. “As soon as conditions stabilise and the Egyptian street stabilises… security will be restored to this nation as if it was before Jan. 25 – and more,” he said.

According to Cairo University’s Abdel-Fattah, Ibrahim’s comments “reveal an intention to restore the interior ministry to its pre-revolution glory with all that it entails, including rights violations, spying, heavy-handed policing, a total lack of accountability, and the domination of Egypt’s political and cultural spheres.

“And from what we’ve seen recently,” he added, “it’s already begun.”

Foreign ministry spokesman Badr Abdel Ati dismissed any comparison between the Mubarak regime and Egypt’s new military-installed government.

“The emergency law will only last for one month and for one objective: to fight terrorism,” he declared. “And the only way to fight terrorism is to apply the rule of law and some emergency measures, for only one month, to restore law and order.”

Abdel-Fattah, in line with increasingly common opinion, was not reassured. “Since Morsi’s ouster, some of those most closely associated with the Mubarak regime, including key members of Mubarak’s [now defunct] National Democratic Party, have begun returning to political life.”

On Wednesday, Mubarak himself was released from prison after being acquitted of corruption allegations. Although he still faces other criminal charges, including complicity in the murder of unarmed protesters in 2011, the Brotherhood described the development as “a victory for the counter-revolution.”

The Muslim Brotherhood formally renounced violence in the 1950s and says it has used strictly political methods to accomplish its aims ever since. Under Mubarak, the group was outlawed and its members routinely persecuted.

In Egypt’s first post-revolution parliamentary poll in late 2011, the Brotherhood’s Freedom and Justice Party won roughly half of the seats in the People’s Assembly (later dissolved by the military), while another quarter went to other Islamist-leaning parties.

Egyptians queue for subsidised bread amid steadily rising commodity prices. Credit: Khaled Moussa al-Omrani/IPS

By Adam Morrow and Khaled Moussa al-Omrani
CAIRO, May 10 2013 (IPS)

Regardless of who is responsible for Egypt’s current political impasse – be it the administration of Islamist president Mohamed Morsi or an aggressive secular opposition – local experts are certain of at least one fact: Egypt’s dire economic circumstances will not improve without political stability.

“Egypt’s economic situation is intrinsically tied to the political one,” economic analyst Hamdi Abdel-Azim told IPS. “Economic stability cannot be achieved amid the turbulence and uncertainty, which for months has characterised Egypt’s political scene.”

Upon assuming the presidency last year, Morsi, Egypt’s first freely elected head of state, inherited a host of long-term economic challenges from his predecessor, ousted president Hosni Mubarak.

Chronically high rates of poverty and unemployment, deteriorating public services and infrastructure, an ever-widening state budget deficit, high foreign debt and mounting disparities between rich and poor are just a few of the issues that Mubarak’s regime failed to solve after three decades in power.

Abdel-Azim cited “mismanagement and corruption” as part of the reason for these problems. Still, the country’s economic position “has worsened considerably” in the nine months since Morsi, who hails from Egypt’s Muslim Brotherhood, took highest office, he added.

Within this period, according to Abdel-Azim, the Egyptian pound has declined in value against the dollar, while Egypt’s foreign currency reserves have fallen considerably. Domestic debt has also risen to roughly 187 billion U.S. dollars. “Numerous local companies have been forced out of business, swelling the ranks of the unemployed,” the analyst added.

Egypt’s tourism sector, meanwhile, long considered one of the country’s chief sources of foreign currency, continues to reel from the cumulative effects of long-term political instability.

Since May 2011, Egypt has been negotiating a 4.8-billion-dollar loan from the International Monetary Fund. The proposed loan, however, will be contingent upon a raft of difficult economic reforms, including major subsidy reductions and tax increases.

Egypt’s political opposition, led by the National Salvation Front (NSF), an umbrella grouping of various opposition parties and movements, has been quick to blame President Morsi for the country’s ongoing economic woes."Morsi and the Muslim Brotherhood are responsible for Egypt's deteriorating economy."
--Amr Hamzawy

“Morsi and the Muslim Brotherhood are responsible for Egypt’s deteriorating economy,” Amr Hamzawy, former MP and a leading NSF member, said in April. “The government is pushing through economic laws without consulting other political forces, while Egypt’s poor are paying the price for the Morsi administration’s failures.”

Some elements of the opposition have limited their demands to a handful of constitutional changes, a cabinet reshuffle and the dismissal of Egypt’s Morsi-appointed prosecutor-general. Others, however, have gone so far as to demand that Morsi step down in advance of snap presidential elections.

Within the last five months, the NSF-led opposition has organised numerous demonstrations and marches, many of which have ended in violence. The Muslim Brotherhood, for its part, blames Egypt’s faltering economy on the opposition’s more extremist elements, whose endless calls for strikes and protests have resulted only in further destabilisation.

“The main reason for worsening economic conditions is the insistence by the opposition – especially the NSF – on inflaming the political situation by encouraging violent demonstrations, thus further destabilising the country,” Murad Ali, spokesman for the Muslim Brotherhood’s Freedom and Justice Party, told IPS.

“In his trips abroad, President Morsi has tried to attract foreign investment to Egypt in hopes of bolstering the economy and realising longstanding demands for social justice,” Ali added. “But these efforts have largely failed to bear fruit due to perpetual domestic political instability, which has been consistently encouraged by the opposition.”

Local captains of industry, meanwhile, warn that Egypt’s economic prospects will remain dim indeed if the political situation does not settle down.

“Failure to resolve the current political impasse will eventually lead to the destruction of Egypt’s tourism industry,” Ilaham al-Zayat, head of the Union of Egyptian Chambers of Tourism, told IPS. “The steadily declining tourist numbers that Egypt has suffered since the [2011] revolution will eventually drive local tourism companies out of business.”

“Without a degree of long-term political stability,” he added, “tourist numbers will never return to pre-revolution levels.”

Gamal Eddin Bayoumi, secretary-general of the Cairo-based Union of Arab Investors, agreed with al-Zayat’s general assertion.

“Egypt’s economic deterioration cannot be stopped without an end of the current state of political uncertainty,” Bayoumi told IPS. “No investor will put his money in a country perceived to be unstable or which lacks state institutions that can guarantee the future of his investments.”

Abdel-Azim blames the ongoing political crisis on both the presidency and the secular opposition.

“The Morsi administration has taken a number of poor decisions without considering their long-term effects, while the president’s economic advisors have lacked adequate qualifications,” he said. “The opposition, meanwhile, doesn’t want to accept the results of Egypt’s first democratic presidential elections, which brought Morsi to power.”

On May 7, in an effort to placate critics, Morsi replaced nine government ministers, including those responsible for sensitive economic portfolios – finance, investment, planning and international cooperation, petroleum and agriculture. Notably, most new cabinet appointees are either Muslim Brotherhood members or sympathisers.

Opposition spokesmen blasted Tuesday’s cabinet reshuffle. “These changes don’t amount to anything,” Amr Moussa, a leading NSF member and head of the liberal Conference Party, said. “Another cabinet shake-up will be necessary before long.”

Even though the reshuffle included the heads of strategic economy-related ministries, “the changes fail to meet opposition demands for a more inclusive government,” said Abdel-Azim. “This will only make resolution of Egypt’s dire economic problems all the more difficult.”

After 18 months of talks, on Wednesday Egypt’s government formally requested a 4.8-billion-dollar loan from the Washington-based International Monetary Fund (IMF), hoping to stabilise an economy that has continued to badly stutter in the aftermath of the popular uprising that led to the downfall of former President Hosni Mubarak.

The request, relayed to IMF chief Christine Lagarde by Egyptian President Mohamed Morsi in a meeting in Cairo on Wednesday, has been met with scepticism from sectors of Egyptian civil society as well as some nationalist politicians.

Many are now expressing anxiety over the negotiations’ lack of transparency and the possibility that the Egyptian government could agree to onerous conditions that may force it to cut back on spending on social welfare and safety nets.

“Many fear that a new era of dependency will start, even after the revolution,” Amr Adly, economic and social justice director with the Egyptian Initiative for Personal Rights, a Cairo-based watchdog, told IPS.

“The IMF loan won’t be approved without giving concessions that completely contradict the promises of a new development model, and thus undermine the potential for social justice measures after the revolution.” (The IMF did not respond to a request for comment for this story.)

Currently, Egypt has some 35 billion dollars in international debt, and talk of a major IMF loan also runs up against ongoing campaigns urging the international community to look into reducing such debt.

“The best way for the international community to support a fresh start for the Egyptian people would be to support an independent commission to determine if much of the debt accrued during the Mubarak era is illegitimate and thus should be cancelled, before any new debt is undertaken,” Deborah James, with the Centre for Economic Policy Research, a think tank here in Washington, told IPS.

This is not to say that the Egyptian economy doesn’t need some significant assistance. Since the beginning of the popular uprising in January 2011, as foreign tourism and investment have plummeted, the country has reeled from a massive crunch on foreign reserves and liquidity as well as a fast-widening budget deficit.

While the IMF has been in talks with the Egyptian government throughout much of that time and billions of dollars in so-called standby credit have been on offer, Fund officials have been wary of going forward until Cairo has been able to show broad political support for taking a loan. With President Morsi’s recent show of power over some of the military’s top brass, many observers feel that the talks could now come to fruition.

Several countries, including Saudi Arabia, Qatar and the United States, have decided or are contemplating offering significant bilateral help to Egypt, as well. Qatar alone has pledged two billion dollars.

Outsourcing expertise

The need for economic help notwithstanding, Egyptians are now trying to weigh their country’s financial troubles against the rumours of what the IMF may require of the government.

Adly, for instance, suggests that the IMF is likely to push for the privatisation of public utilities, regressive taxation and less social expenditure. But he also expresses frustration that, to date, much of this is simply speculation.

“There is no transparency in this process – we have no idea about what the IMF and the government are negotiating about,” he says. “The government has said that the IMF is not imposing any conditionalities, but then why are they negotiating at all?”

Part of the issue is that the newly elected president, his Muslim Brotherhood party and its ruling coalition have decades of experience in social and religious issues but lack expertise in monetary and fiscal issues.

As such, many are worried that IMF officials will be able to dictate the terms of the loan to a greater extent than it would if it were dealing with a government with a clear economic vision.

Morsi’s government is clearly aware of its lack of economic expertise, and thus has chosen to keep around some important members of Mubarak’s government, including the governor of the central bank, Farouk Al-Okdah, and others.

“These are the very members of the neoliberal team once in charge under Mubarak,” Adly says. “These bureaucrats and technocrats are quite conservative, and there is the idea that they have been kept in office in order to negotiate with the IMF and the World Bank.”

Plantation mode

On Wednesday, Lagarde said that the IMF is “responding quickly” and sending a technical team in early September. That same day, Prime Minister Hisham Qandi said he would hope for an agreement by the end of the year.

If an agreement happens, Egypt would be the 20th African country to be indebted to the IMF, according to 2011 statistics. If the final agreed amount is anywhere near the request, the Egyptian loan would be by far the largest on the continent.

In lieu of information about current negotiations between Cairo and the Fund, lessons learned from experiences elsewhere are inevitably forming some of today’s analysis.

Rick Rowden, an economics doctoral student at Jawaharlal Nehru University in Delhi and a development consultant, says that many multilateral funders, including the IMF, have for years placed significant emphasis on human development indicators.

In so doing, he tells IPS, they have “wholly neglected the actual need for economic development – shifting from an economy that is overly reliant on agriculture and extractive industries into one that is based more on manufacturing and services”.

Time and again, Rowden says, the IMF and other funders have pushed policies that seem to run counter to the industrial policies that most countries need to create real development: those that build domestic manufacturing. Doing so, he says, make it difficult for countries such as Egypt to “get out of plantation mode”.

Rowden suggests that this can be further exacerbated by a tendency on the part of the IMF not to differentiate between domestic and international private sectors, an “essential first step” in creating effective domestic industrial policies.

“The people of Egypt need to participate and make sure their government takes steps to develop national development strategies, including the adoption of long-term industrial policies to build a domestically owned manufacturing base with a clear plan to diversify the economy, build up the tax base and increase public investment,” he says.

“And none of this will be likely under [IMF] loans and policy advice.”

Demonstrations in Tahrir Square are now against rising prices. Credit: Khaled Moussa al-Omrani/IPS

By Adam Morrow and Khaled Moussa al-Omrani
CAIRO, May 18 2012 (IPS)

More than 15 months after Egypt’s Tahrir Square uprising and four months after free parliamentary polls, many Egyptians say that daily living conditions are worse now than they were in the Mubarak era.

“Conditions for the average Egyptian have become worse – economically, socially and in terms of security – than they were before the revolution,” Egyptian analyst Ammar Ali Hassan tells IPS.

Since the popular uprising early last year which saw the Mubarak regime replaced with a ruling military council, Egyptians have complained of steadily rising prices for a number of strategic commodities. These include basic foodstuffs – sugar, rice, cooking oil – and vital fuels, such as butane, diesel and gasoline.

“Over the course of the last year, prices at the market have skyrocketed inexcusably. One kilogram of tomatoes just jumped from one to five pounds overnight (one Egyptian pound is 16 U.S. cents),” says Tarek Moussa, a 34-year-old employee at a local trading company. “My monthly salary is now barely enough to keep food on the table for my wife and two children.”

The steadily rising cost of living has been accompanied by supply shortages, especially of fuels used for transport and cooking.

In Cairo, recent months have seen long lines at gas stations – frequently stretching around the block – due to weeks-long gasoline shortages. There have also been frequent reports of fights breaking out over butane gas cylinders, used for cooking by most Egyptian households, which are also in increasingly short supply.

“My transportation costs have jumped sharply because bus and microbus drivers have all doubled their prices due to the chronic shortage of gasoline,” says Moussa. “Given my low salary, it’s become more cost- effective to simply not go to work.”

Along with these deepening economic grievances, many Egyptians also complain of an ongoing post- revolution security vacuum and its effects on domestic security.

At the height of last year’s uprising, the Mubarak regime withdrew Egypt’s police forces nationwide, leaving domestic policing responsibilities in the hands of the military – which has done little to stop the resultant upsurge in crime. Police forces have yet to be redeployed at pre-revolution levels.

In the streets of the capital, muggings – an infrequent occurrence during the Mubarak era – have now become commonplace. Automobile theft appears to have become one of the country’s few growth industries.

The lack of domestic security, in tandem with ongoing regional turmoil, has also taken its toll on Egypt’s once thriving tourism sector, which has traditionally represented a leading employer and primary source of foreign currency. According to Egypt’s tourism ministry, annual tourism revenue fell from some 12.5 billion dollars in 2010 to some 8.8 billion dollars in 2011.

On Apr. 20, hundreds of thousands of demonstrators from across the political spectrum converged on Cairo’s Tahrir Square to voice longstanding grievances, chief among them the worsening standard of living.

Hassan, however, is quick to stress that Egypt’s deepening economic and security woes should not be blamed on last year’s uprising.

“The revolution, which liberated Egyptian political life after more than 30 years of autocracy, should not be blamed for deteriorating conditions,” he says. “The current deterioration is a direct result of the military council’s failure to properly administer Egypt’s ongoing transition to democracy.

“Had the ruling military establishment adopted a few simple measures, living conditions would be better today. It should have worked harder to ensure domestic security, prevent market monopolies, stimulate the economy and recover public funds pilfered by the former regime.”

Hassan does not rule out the possibility that the negligence is intentional. “These conspicuous failures might reflect the military’s lack of political and administrative experience, or hasty decision-making. Or they could be premeditated with the aim of discrediting the revolution and its ideals.”

The ruling military council has repeatedly vowed to hand over executive authority to Egypt’s next head of state after presidential elections are held later this month.

Voicing a common opinion, Magdi Sherif, head of the centrist Guardians of the Revolution Party, attributes Egypt’s worsening living conditions to the fact that “most, if not all, of Egypt’s key economic activity remains in the hands of former regime elements.”

Sherif attributes the ongoing security vacuum to a “fifth column of Mubarak regime holdovers who remain in charge of the interior ministry, which has actively worked – and continues to work – to promote instability and discredit the revolution.”

Both men, however, also place blame – albeit to a lesser extent – on Egypt’s post-revolution political powers. These include Islamist parties, which together now hold more than three-quarters of the seats in parliament, along with their liberal and leftist counterparts.

“Egypt’s economic situation wouldn’t be so bad if the Islamist parties used their newfound power in parliament to press for outstanding revolutionary demands, like passing antitrust legislation and raising the minimum wage,” says Hassan. “Instead, they’re using their parliamentary clout to jockey for power with the ruling military council.”

Sherif, for his part, is quick to point out that post-revolution Egypt is in its “political adolescence”.

“And this adolescence extends to all political factions: the Islamists, the liberals, the revolutionaries,” Sherif tells IPS. “This is a primary reason for the current political deadlock – most political forces are putting their own narrow interests above those of the nation.”

Meanwhile, candidates in Egypt’s upcoming presidential election, slated for May 23/24, have lined up to promise would-be voters an improved domestic security environment, better living conditions and rapid economic development.

“Central planks of my electoral programme include re-establishing security, raising pensions and the minimum wage, stimulating the economy with large development projects and improving public health and education services,” Amr Moussa, former Arab League chief and presidential frontrunner, tells IPS.

“Candidates are promising to solve all the country’s problems,” says Sherif. “But Egypt’s next president better deliver or he could have a second revolution on his hands.” (END)