One of the things that attracted attention in the recent Lebanese uprising is the adoption of the slogan “down with the rule of the banks” as a variation for “down with the rule of the Supreme Guide/the military” and “down with Hosni Mubarak” in Egypt. In the Lebanese slogan, unlike the Egyptian ones, the idea does not revolve around a person or a ruling class, or even the ruling regime. The Lebanese slogan–which first emerged in the 2015 demonstrations known as “you stink”–focuses on what the demonstrators saw as the structure, style, or philosophy of governance, as the banks do not represent a person, a group of people, or even a ruling coalition.
At a later stage of the Lebanese uprising, demonstrators directly targeted banks, and large numbers of them gathered outside them to protest their policies. There were even reports that demonstrators stormed some bank branches due to the cash crisis the country is suffering from, prompting bank employees to stage a strike.
It is evidently an oversimplification to reduce the difference between the Egyptian and Lebanese cases to a slogan or a few protest gatherings. However, there are important differences between the two that led some Lebanese protest slogans to target the political, economic, and philosophical structure of governance. There were indeed other slogans that targeted certain individuals in Lebanon, like the case with Gebran Bassil, but the slogans “down with the rule of the banks” and “all of them means all of them” were far more central. In Egypt, the target of most of the consecutive protest movements after the revolution was an individual or a group of people, which was also the case in the Kifaya (enough) movement even before the revolution. Opposition to financial corruption was central in both countries, but their point of view in tackling the issue may have varied somewhat.
In addition to the fact that an issue related to taxes was the spark that ignited the protests in Lebanon and placed the financial situation at the heart of the protest movement, one of the biggest differences between the Egyptian and Lebanese cases is the direct and daily contact a vast majority of the Lebanese have with the banking sector due to the big role this sector plays in the country. The assets of the banking sector in Lebanon represent around 174 percent of the Gross Domestic Product, making Lebanon the number four country in the world in this indicator after Hong Kong, Denmark, and Switzerland. The number in Egypt is half of that in Lebanon, placing Egypt forty-third globally in this same indicator.
The percentage of remittance sent by expatriates is 12.7 percent of the GDP in Lebanon and 10.2 percent in Egypt. Bearing in mind that the per capita GDP in Lebanon is more than three times that of individuals in Egypt, this makes the per capita remittance in Lebanon about four times that of the Egyptian per capita. The most prominent difference between the two countries is the percentage of people who have bank accounts, which is forty-five percent of the population in Lebanon, whereas in Egypt it is about ten to fifteen percent.
As for the public debt, which has exceeded 150 percent of the GDP in Lebanon, it is mostly owned by private commercial banks that receive very high returns from taxpayer money and the government without any significant risk on their part. In Egypt, commercial banks also own the lion’s share of public debt. However, a big part of this debt–which is relatively small compared to its Lebanese counterpart given the volume of the Egyptian economy, but is still growing fast–is owned by government banks and insurance companies. As Thomas Piketty put it in his book Capital in the 21st Century, “debt often becomes a backhanded form of redistribution of wealth from the poor to the rich, from people with modest savings to those with the means to lend to the government.” .”
Another important reason is the amount of personal/family debts in the two countries. Lebanese families’ debts reached 20.5 billion dollars in 2017 or about forty percent of the GDP. Whereas consumer debts in Egypt, which has a population fifteen times higher than that of Lebanon, was around 250 billion Egyptian pounds (15 billion dollars) or about less than five percent of the GDP. According to statistics from the Lebanese central bank in 2017, personal debts have doubled since 2010 and the number of debtors with personal loans rose from thirty-four thousand in 1993 to around one million in 2017, an increase of three thousand percent. One-third of them used the loans to finance consumer goods, buy a home or car, or pay other obligations.
Despite this, financial corruption in Egypt constituted a large part of the protest movement’s discourse. Gamal Mubarak's businesses, for example, symbolized the type of crony capitalism that flourished under the Mubarak regime. However, the public perception of Gamal Mubarak’s businesses was that the maximum economic benefit, which he gained because of his political status was not necessarily at the expense of other people’s interest and that it took place in the “distant” and “parallel” finance and investment world, which people do not interact with. The same principle applies to land grabs as an untouched resource, which received wide media coverage during the revolution. But precisely because land was an untouched resource, a lot of people did not perceive how these methods of corruption directly affect them. From the complex financial and bank investments that were far removed from the daily lives of people to the plundering of land in the desert and near the coast that was geographically far from the people, no coherent perception of the effects of corruption and its structural causes were developed in Egypt. Instead, amoral discourse prevailed about an elite that plundered that abstract entity called “the country,” which contributed to the relative neutralization of the citizens of “the country.” The Lebanese protests were more capable of dealing with the economic structure, which put them in a better position to bypass a discourse that identifies the problem as the corruption of a small group of influential and powerful individuals and sees that the removal of these individuals will make the problems go away.
Targeting the Rentier Structure Between Theory and Political Action
Within the context of political economy, the mention of rentier activities immediately brings to mind an image of the possession of tangible assets and natural resources, such as oil fields in the countries of the Global South, especially the Gulf states and sub-Saharan African countries. But David Harvey, professor of anthropology, geography, and political economy, believes that the financial and banking sector’s activities are the most developed forms of “accumulation by dispossession” in the “neoliberal era”, instituted in the late 1970s.
Harvey defines accumulation by dispossession as the contemporary version of primitive accumulation. According to Karl Marx and Rosa Luxemburg, primitive accumulation is an accumulation pattern that is based on power, fraud, oppression, and plundering. It takes place in full view of everyone without any effort to conceal it. This form of accumulation, according to Luxemburg, takes places in contrast to–and is integrated and synchronized with–forms of accumulation that are based on the extraction of added value through employing workers, selling their products, and then reinvesting part of the added value, in order to expand in what is called in the Marxist literature as “expanded reproduction.” Primitive accumulation resembles the accumulation resulting from rentier activities in that it relatively neutralizes the factors of labor and production.
The weak tax collection rates in Egypt show the prevalence of the rentier economy. Tax collection in Egypt does not exceed fifteen percent of the GDP and makes up only seventy percent of the state’s resources, or forty percent if we consider borrowing. Part of this low tax collection comes from rentier sources like the Suez Canal and the oil and financial sectors. Of the 462 billion Egyptian pounds collected in the fiscal year 2016-2017, 22 billion pounds came from Suez Canal taxes and 42 billion pounds from the Petroleum Authority, in addition to revenue from other rentier activities such as royalties from the Petroleum Authority and the Suez Canal and investment in debt, securities, and borrowing.
Despite the rentier nature of both Egypt's and Lebanon’s economies, the recent protest discourse in the latter seems more capable of targeting the rentier structure of the economy, whereas the protests in Egypt targeted symptoms, such as corruption, favoritism, increasing inequality, and scarcity of good job opportunities.
Amr Adly, assistant professor of political economy at the American University of Cairo, wrote an article in Bloombergentitled “No, Corruption is Not the Root of the Arab World’s Problems,” in which he criticized the centrality of the anti-corruption discourse in international institutions. Adly states that corruption is the outcome of–not the cause of–the shabby economic structure in the Arab world. Adly also criticized the dominant vision that focuses on “corruption — and more generally, bad governance — have has [sic] often been emphasized as the main reason behind the inability of MENA countries to engage competitively and efficiently in the global economic order.” Skeptical of this discourse, Adly says, “Even though the anti-corruption language has proved to be a powerful instrument in popular mobilizations against politically-bankrupt and venal elites, it has also veiled many of the structural aspects of the crises of MENA societies and political economies.”
I totally agree with Adly’s analysis regarding the insufficiency of the exaggerated focus on the anti-corruption discourse by national and international groups both on the right and left of the economic spectrum. This resembles a consensus that renders the anti-corruption concept void of meaning by avoiding delving into difficult structural questions and removing contention from societal dialogue. The international institutions’ discourse on fighting corruption in the countries of the Global South is part of the neoliberal centrist consensus that the world has been witnessing in the last three decades. Instead of raising the issue of wealth redistribution and facing the increasing inequality, this discourse has focused on institutional bureaucratic reform as a technical and non-political solution to development problems in the region. Both the right and the left have promoted this discourse.
As a talented academic researcher, Adly calls out an important insufficiency in analyzing the problems of this turbulent part of the world. His point of view is perfectly fit for the development of an analysis framework that goes beyond analyzing corruption structures in the Middle East and North Africa, seeking instead to identify the structure that allows them to exist. According to Adly, it is the structure of the rentier economy rather than the productive economy. Adly’s analysis is theoretically appropriate as an effort to criticize the kind of essentialism that has been specifically linked to the Middle East in particular and to the Global South in general. It is useful to concentrate on the material and objective conditions in order to refute this discourse of essentialism and orientalism, which manifests itself explicitly in some instances and implicitly in others and states that the difficulty of reform in the Middle East stems from the decline of ethics associated with integrity and rational management of work and resources.
In this context, Gilbert Achcar, professor of development and international relations at the School of Oriental and African Studies at the University of London, says that the orientalist reading of the contemporary history of the Middle East explains all historical phenomena as if they were a result of the culture and ideology of their adherents, completely disregarding the social, economic, and political circumstances that led to the emergence or dominance of the various versions of these ideologies within various social groups.
Before moving the discussion beyond the benefits of moving beyond the anti-corruption discourse as an analytical and theoretical framework governing the study of the political economy of the Middle East, I would like to add a final point about considering corruption as the outcome of weak productive capabilities in the region rather than its cause. Corruption structure also leads to the prolongation of the rentier economy because the political and economic elites have no incentive to invest in the productive economy and challenge the international division of labour as long as they obtain income from the rentier economy. This relationship between rentier economic structures and financial corruption structures, therefore, resembles more a positive feedback loop than a unidirectional influence relationship.
Moreover, the rentier economic structure did not come into existence in vacuum, and it does not function as an independent structure that derives the conditions of its existence and continuity from within. One should not deal with it as the timeless and ahistorical origin of social and political phenomena that are affected by it but do not affect it. The presence of natural resources or rentier sources is a prerequisite for the establishment of a rentier economy, but is not enough in and of itself. There are examples of countries extremely rich in natural resources that do not have the so-called resource curse, like Norway for example. There is also the example of the Arab Gulf countries, whose heavy reliance on rentier structures led to the establishment of extreme totalitarian regimes; however, they nevertheless succeeded in achieving high levels of welfare and stability, which the rentier regimes in sub-Saharan Africa did not succeed in achieving.
Transcending the Corruption Discourse and the Dangers of Paralyzing Political Action
Distinguishing a unidirectional influence relationship from a positive feedback loop is not merely a theoretical matter. It has an effect on both political and policy action. This takes us to the next point, which is the anti-corruption discourse as a framework for political and policy action.
The “circular” positive feedback relationship needs disruption in any of its points to disrupt its vicious circle, whereas the unilateral influence relationship requires the targeting of the “major source” of the problem. In the latter case, confronting the “cause” is an effective strategy, whereas confronting the “outcome” will not lead to anything. Therefore, the unilateral view requires one strategy for actions, which is targeting the structure as a major source of the imbalances in the region, while the mutual reinforcement view allows for multiple strategies of political action. This reminds us of the concept of overdetermination developed by Louis Althusser in his famous article: “Contradiction and Overdetermination,” in which he says that social phenomena do not have one cause and that channels of influence and determination do not usually go in one direction.
The reductionist discourse of anti-corruption is problematic as it does not take into account the possibility of having a defective macroeconomic structure. However, we should be cautious about rejecting the role of anti-corruption discourse as an entry point to political and policy action and calling for the need to target the structure in its entirety, which will automatically change everything for the better. This is the logical conclusion for the unidirectional influence assumption.
In an analysis of the psychology of charity work, a study found that compassion and the ability to act decrease as the size of the tragedy increases, due to the feeling that any action will not be useful. Therefore, in order to motivate donations, it is better to present one threatened child and show their image, name, and age than to say there are a million children facing the threat of hunger. This is known as “compassion fade”; it is a principle that is similar to the famous saying, “death of one person is a tragedy, but the death of hundreds of thousands of people is a statistic.” The same logic can be applied to political action, where the corruption of one person is a scandal, but the corruption of the whole structure is a statistic. It is important to view anti-corruption as a means of political struggle through multiple small struggles rather than saying that it is only feasible to target the structure in its entirety, which could be defined to include the entirety of the global economy, rendering any political action useless.
Anti-corruption may have a pivotal role as an effective mobilization tool that can add a human dimension to the economic structure, thus targeting the system through targeting some of its members and waging struggles in a manner that makes it more motivating for action. Each targeting can have an effect on the overall structure of the rentier economy. From a theoretical and research perspective and as an analysis approach, we ought to draw inspiration from the Lebanese case in order to accurately locate the sources of inequality in the region and around the world, transcending the neoliberal and neo-orientalist discourse that addresses corruption as a technical issue and as an independent system belonging to the Global South, which derives the conditions of its existence solely from within it and therefore can only be overcome with the assistance of rational agents external to it.
*Special thanks to the writer and economic researcher Wail Gammal. This article is based on a prolonged discussion with him on the anti-corruption discourse in Egypt and the difference between the Egyptian and Lebanese revolutions in dealing with corruption and the economic situation. Despite this acknowledgment, I remain solely responsible for any potential weak points in this article.
[This article was translated from its original Arabic by Mazen Hakeem.]