Follow Us

RSS Feed    Follow on Twitter    Follow on Facebook    YouTube Channel    Vimeo Channel    Tumblr    SoundCloud Channel    iPhone App    iPhone App

Egypt's ‘Orderly Transition’? International Aid and the Rush to Structural Adjustment

[Image from unknown archive.] [Image from unknown archive.]

Although press coverage of events in Egypt may have dropped off the front pages, discussion of the post-Mubarak period continues to dominate the financial news. Over the past few weeks, the economic direction of the interim Egyptian government has been the object of intense debate in the World Bank, International Monetary Fund (IMF) and European Bank for Reconstruction and Development (EBRD). US President Obama’s 19 May speech on the Middle East and North Africa devoted much space to the question of Egypt’s economic future – indeed, the sole concrete policy advanced in his talk concerned US economic relationships with Egypt. The G8 meeting in France held on 26 and 27 May continued this trend, announcing that up to US$20 billion would be offered to Egypt and Tunisia. When support from the Gulf Arab states is factored into these figures, Egypt alone appears to be on the verge of receiving around $15 billion in loans, investment and aid from governments and the key international financial institutions (IFI).

The press releases accompanying the announcement of these financial packages have spoken grandly of “the transition to democracy and freedom”, which, as several analysts have noted, conveniently obfuscates the previous support of Western governments for the deposed dictators in Tunisia and Egypt. This article argues, however, that a critique of these financial packages needs to be seen as much more than just a further illustration of Western hypocrisy. The plethora of aid and investment initiatives advanced by the leading powers in recent days represents a conscious attempt to consolidate and reinforce the power of Egypt’s dominant class in the face of the ongoing popular mobilizations. They are part of, in other words, a sustained effort to restrain the revolution within the bounds of an ‘orderly transition’ – to borrow the perspicacious phrase that the US government repeatedly used following the ousting of Mubarak.

At the core of this financial intervention in Egypt is an attempt to accelerate the neoliberal program that was pursued by the Mubarak regime. The IFI financial packages ostensibly promote measures such as ‘employment creation’, ‘infrastructure expansion’ and other seemingly laudable goals, but, in reality, these are premised upon the classic neoliberal policies of privatization, de-regulation and opening to foreign investment. Despite the claims of democratic transition, the institutions of the Egyptian state are being refashioned within this neoliberal drive as an enabling mechanism of the market. Egypt is, in many ways, shaping up as the perfect laboratory of the so-called post-Washington Consensus, in which a liberal-sounding ‘pro poor’ rhetoric – principally linked to the discourse of democratization – is used to deepen the neoliberal trajectory of the Mubarak-era. If successful, the likely outcome of this – particularly in the face of heightened political mobilization and the unfulfilled expectations of the Egyptian people – is a society that at a superficial level takes some limited appearances of the form of liberal democracy but, in actuality, remains a highly authoritarian neoliberal state dominated by an alliance of the military and business elites. 


This article is now featured in Jadaliyya's edited volume entitled Dawn of the Arab Uprisings: End of An Old Order? (Pluto Press, 2012). The volume documents the first six months of the Arab uprisings, explaining the backgrounds and trajectories of these popular movements. It also archives the range of responses that emanated from activists, scholars, and analysts as they sought to make sense of the rapidly unfolding events. Click here to access the full article by ordering your copy of Dawn of the Arab Uprisings from Amazon, or use the link below to purchase from the publisher.

7 comments for "Egypt's ‘Orderly Transition’? International Aid and the Rush to Structural Adjustment "

Gravatar

Could you suggest some good sources on how similar policies were carried out in Iraq?

Isaac Miller wrote on May 30, 2011 at 01:14 AM
Gravatar

The Egyptian revolution is unfinished. It needs to move from a democratic to a social phase, removing the army's grip on power and bringing the economy under popular ownership and control. The alternative is a big SAP!

Paul Feldman wrote on June 02, 2011 at 11:14 AM
Gravatar

Fine piece...am in the process of taking notes on similar processes in Tunisia. This is very helpful. Need more attention on the economic changes (or lack thereof) in Egypt and Tunisia. My sense also is that these loans are an attempt to consolidate western economic control of the region even more so than existed in the past (if that is possible)... thanks... r.prince

Rob Prince wrote on June 02, 2011 at 11:03 PM
Gravatar

Excellent article. Readers, please do all in your power to spread this important information.

lissnup wrote on June 05, 2011 at 02:17 PM
Gravatar

As a former employee of the PPP Authority in Egypt which is under the mandate of Ministry of Finance MoF, I know first hand how these deals work and how the IMF and World Bank use these neo-colonial programs to enslave us.

First, the IMF and World Bank are main consultants on almost all projects. During negotiation meetings with the main private sector bidders on the Project, the IMF team would side with almost all of the private companies request when it came to contact drafting, payment mechanisms and responsibility and services provided.

I worked on a project that was suppose to build nearly 345 public schools in 18 governrates (has not been implemented so far to the best of my knowledge). The main bidder on the Project had high profile lawyers that would continuously twist the arm of the MoF and the General Authority for Educational Buildings(GAEB). Most of the time, the bidders requests would be approved and drafted in the contract.

For example, and this is one of many, schools usually have after school and weekend programs for their students. This was unacceptable to bidders and their high priced Dubai stationed lawyers. Schools in the contract were only to be open from 7am to 4pm. According to the lawyers, "the opening of schools on weekends or later on in the evening during the week would be a security threat to the investors and if such programs were to be implemented that would come with an extra cost". An extra cost the MoF could not afford. Further, the investors wanted to expand their "revenue steams" by having "cultural events" at the schools at night, such programs would inhibit the "cultural events" from taking place. Also, no students could be at school after 4pm. This means, a child that was waiting for their older brother or sister to pick them up would have to stay out in the street and wait if the person responsible for picking them up was late for any reason.

My point is this, the process and discourse to making money is unethical in its essence, especially on large scale projects. The maximization of profits always comes at the cost of people closest to the business operation, whether cutting costs, reduced services, unethical treatment of students...etc. If we want to build a new Egypt that meets the demands of its people we should not allow these types of aid programs to operate. These investors don't build schools to improve education, the build schools to make money. They don't build hospitals to provide decent health care, they build hospitals to overprice medical care that us the tax payers and generations after us will have to pay.

I believe the motivation and financing behind a project can always provide a good indicator of who will benefit most. Investors one and only goal is to make a profit, this is my view is not the motivation we need as Egyptians to build a country we fought for and will continue to fight for as this article clearly points out.

Ahmed Tarik wrote on June 12, 2011 at 10:05 AM
Gravatar

Don't know economics; know a little bit about how IMF/etc tie poorer countries to debt service enriching only themselves, under rhetoric of "democritization." But, I haven't any clear picture of "what else," what is the other side? what is the competing model for handling Tahrir's genesis and demands in the economic sphere?

Mary Megalli wrote on June 21, 2011 at 02:31 PM
Gravatar

Excellent piece; thank you for providing a detailed, coherent analysis/critique of Egypt's "financial reform package" being euphemistically sold by western govm'ts, IFI's, etc. My question is a reiteration of Mary Megalli's--what alternative models/alternatives exist--beyond rejection of the current IFI proposals--that can we can learn from to give life to the growing aspirations of the Egyptian people and to meaningfully fulfill this amorphous but now ubiquitous concept of "social justice" that every aspiring politician is throwing around?

Dina Guirguis wrote on June 21, 2011 at 11:57 PM

If you prefer, email your comments to info@jadaliyya.com.

Pages/Sections

Archive

Jad Navigation

View Full Map, Topics, and Countries »
You need to upgrade your Flash Player

Top Jadaliyya Tags

Get Adobe Flash player

Jadaliyya Features