Stuttering democracy and economic crisis in Egypt: moving on from the neoliberal dogma

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Meanwhile Egyptians are called to vote for a president, the key to trigger a move away from authoritarianism in the country could rather lie in the ability of the IMF and the World Bank to see beyond the scope of the neoliberal dogma.

The 2011 Egyptian revolution followed a decade of increasing social tensions. After relatively few demonstrations in the early 1990s, social conflict intensified markedly in the late 1990s and throughout the 2000s. In 2008 there were 609 collective actions[i]. Aside from the deteriorating social climate, mobilisation became openly political.In 2004, the opponents to the Mubarak regime rallied in a single political front, Kefaya, which brought together for the first time both the leftist and the Islamist oppositions. Originally apolitical, the movement shifted toward the denunciation of the unaccountability of Mubarak's rule. Similarly, after 2007, numerous protests broke out within the textile industry. They rapidly developed into political protest against the regime. This culminated in 2008 at a workers' revolt in a factory in Mahalla Al-Kubra which transformed into a movement that unified multiple strands of the political opposition. United together, this opposition, which became known as the "6th April movement", attacked regime symbols and relied extensively on the internet to publicise its struggle for dignity. Hence, the 2011 revolution belongs entirely to a decade of radicalising political contestations.

This long-brewing social discontent flows from the socioeconomic disintegration that followed the implementation of the IMF-designed adjustment programs from 1990 onwards.

On the one hand the dilatory deregulation policies implemented as part of those programs did not lead to the diminution of the regime's grip over the economy, rather to its enlargement. Skewed privatisation programs resulted in the shift from public monopolies to private monopolies, remaining in the same hands of the ruling elite[ii].

Meanwhile the considerable military and public sector continued to expand. On the other hand, these so-called economic reforms were accompanied by further restrictions of political freedom. The passing of the Unified Labour Law of 2003 and the promulgation of an even more liberticidal version of the emergency state in May 2010, are obvious examples. Despite being continuously hailed as successfully reforming by the IMF and the World Bank[iii], the structural changes had little bearing on the Egyptian economy. The 4.8% average growth of the 2000s[iv] was only sufficient to keep unemployment stationary at historical high levels, without benefiting university graduates and women; the pattern of "bad-growth" remained unchanged, with the economy primarily characterised by an over-staffed public service and a rent-seeking private sector.

In other words, the measures implemented in Egypt since the 1990s under the close supervision of the international financial institutions, did not, in fact, lead to structural economic transformations but to the worsening of authoritarianism.

Last year, the Egyptians revolted against the disintegration of their living conditions and further arbitrariness; following in the footstep of the Tunisians, they overthrew Mubarak. The source of the meltdown in Egypt since the 1990s has to be searched upstream, in the profound misperception of the economic problems identified by the IMF and the World Bank; and downstream, in their mistaken evaluation of the inconsistent reforms in the country. Successive misleading reports on the state of the Egyptian economy, along with the unabated political support provided to Mubarak by the US and the EU, were the best guarantees to the non-evolution of the regime. Their positive assessments covered the burst in clientelist practices and crony capitalism that accompanied the reforms, and allowed the perpetuation of aberrant economic policies condemning a growing number to impoverishment.

The economic policies promoted by the international financial institutions to the current transitory government in Egypt remain the same. The recent negotiation for a new IMF bailout held in Cairo, as well as the conclusion of the G8 Deauville Summit on the Arab Springs in May 2011[v], has shown the reaffirmation in the belief that the recipes of the 'Washington Consensus' will eventually put Egypt on the right path; overlooking that the very application of these stereotyped precepts contributed to leading the country to the brink over the past twenty years.

It is utterly naive to assume that the same misleading policy prescriptions applied to the Egypt's stuttering democracy will this time succeed in providing adequate response to the country's alarming economic situation. Possibly more important for its future than the outcome of the presidential election is the long-brewing economic crisis that has dogged Egypt for more than a decade. This is a multilayered issue that deserves a serious analysis beyond ideological scope. Hence, as long as international financial organisations continue to consider the potential solution for Cairo solely through the narrow spectrum of neoliberal dogma, it is almost impossible for post-revolution Egypt to move on from its new thinly veiled authoritarianism.

 

[i] Joel Beinin and Frédéric Vairel, Social Movements, Mobilization, and Contestation in the Middle East and North Africa, Stanford University Press, 2011, p. 187.

[ii] See Clement M. Henry and Robert Springborg, The Politics of Globalization in the MENA, Cambridge University Press, 2001, pp. 134-167.

[iii] For example, the 2010 IMF article IV consultation stressed the "sustained and wide-ranging reforms since 2004". International Monetary Fund, Arab Republic of Egypt: 2010 Article IV Consultation, IMF Country Report n°10/94, April 2010, p. 3.

[iv] The World Bank Database, 2012.

[v] French Presidency of the G8 and G20, "Declaration of the G8 on the Arab Springs", Deauville, 26-27 May, 2011.