A Story of Infitah: Egyptian Liberalization Under Stress

Authors: Hamz a Ates, Mehmet Duman, Yuksel Bayraktar

Economic Review

Download full article here: Egypt under stress

Date Published: June 2006

This article proves as a good supplement to that of the previous post. The past four decades of Egypt’s economic history are lucidly outlined.  This includes a description of the pre-Infitah atmosphere, the pressures in transition, and the policies of Mubarak leading up to the revolution.  Because the article was written in 2006, the connection between this economic transformation and the uprising are not made. However, the article discusses that one of the major consequences of liberalization was that of enhanced budget deficits. WIth these deficits, came restructuring polices which included some fairly drastic austerity measures, including reduced government subsidies to the poor and cuts in social services. These measures were pushed on the Egyptian people in a time when there was large numbers of unemployed and a stagnant real wage.  Could these dramatic economic conditions pushed the Egyptian youth (who were experiencing levels of unemployment greater than 20%) to the street?

Egypt’s “Infitah” and the Politics of US Economic Assistance

Full article available for download here: Egypt’s Infitah

Source: Middle Eastern Studies, Vol 21, No. 2 (April., 1985)

Marvin G. Weinbaum

This paper gives necessary insight for anyone interested in Egypt’s socioeconomic transition away from the socialist leaning government of Gamal Abdul Nassar towards what was described as “free market” capitalism under Sadat.  Weinbaum discusses the influence of U.S. aid on the Egyptian administration, how that aid policy changed, and how Egypt’s Infitah (opening) may not have been an opening at all.

2005 – Egypt’s poor untouched by economic boom

Source: Aljazeera.com

9/1/2005

“Egypt’s economy is growing at its fastest pace in years, exports are surging and the bourse is booming, but there is little sign yet of an economic revival in the poor suburbs and crowded slums of the capital”

This article from Al Jazeera English describes a pre-uprising atmosphere in Egypt where the country’s poor saw little befit from the country’s growing economy.  At the turn of the century, the Mubarak administration, in accordance with its structural adjustment package, privatized much of the country’s state run businesses. This led to massive lay off of Egyptian workers.  Official unemployments estimates at the time were around 10 percent, however, unofficial estimates, which include jobs outside of recognized labor, placed the unemployment rate at levels up to twice that number.  With roughly 20 percent of the population unemployed, the government cutting its public sector, and reducing its provided social services to reduce its deficit, its no wonder that people took to the streets in rage.

Full article available here.

Promoting Economic Liberalization in Egypt: From U.S. Foreign Aid to Trade and Investment

Promoting Economic Liberalization In Egypt: From U.S. Foreign Aid to Trade and Investment

By Bessma Momani in the Middle East Review of International Affairs, Vol. 7. No. 3 (September 2003)

Full article available for download here –  Promoting Economic Liberalization in Egypt

Bessma Momani describes how the Mubarak administration was put under pressure by the United States to liberalize their economy in the 1990s.  This had come after several years of liberalization in Egypt but was now centered on the opening up of international markets.  The pressure from the United States had less to do with the success of the reforms and more to do with Egypt as a strategic ally in the Middle East. For this reason, aid from the U.S. has never stopped and was $2 billion annually in 2003.  The article also discusses, in some detail, the complications of starting a Free Trade Agreement between the two nations.  It would be interesting to hear a dissuasion from Momani on how these reforms affected the Egyptian economy in later years, and how the relationship has changed since the uprising.

No factories, No Problems: The logic of Neo-Liberalism in Egypt

This article by Timothy Mitchell, which was published in Review of African Political Economy in 1999,   gives a telling account of liberal adjustments in the Egyptian economy during the 1990s.  Mitchell explains how neoliberal reforms in Egypt actually accomplished very little of what they set out to achieve. Much of the economic “progress” seen during this period, according to at the article, was influenced by a host of factors not normally acknowledged by advocates of the reforms. For example, the success of the banking sector after its collapse was greatly funded by the state.  Or, how although the reforms were intended to create an export boom, they actually hurt exports and instead created a massive and unwarranted boom in domestic construction projects. This article gives an excellent examination into Egypt’s structural reforms of the 1990s and provides a critical analysis that is difficult to find.

PDF can be accessed here: the logic of neoliberalism in egypt.

Egypt issues strike warning – Apr 2008

Full Article.

This article discusses the methods of organization taken prior to the bread strike in 2008.
The general strike against low wages and rising prices was called by the country’s largest state-owned textile factory, Mahalla al-Kobra.
The article also discusses the reactions by the government after the strike warning was issued. (striking is illegal without permit in Egypt)
“The ministry’s agencies will take the necessary and immediate firm measures against any attempt to demonstrate, block traffic, or hinder public services – or inciting any of these acts.”
Articles like this are vital in fully understanding the political and economic atmosphere in Egypt prior to the current revolution.  It is also vital to gaining insight into the desires of the Egyptian people. 

Inside Story – Egyptian protests – 6 Apr 08

Here is part 1 of a television report put out by Inside Story in part with Al Jazeera English.  The report  asks if the workers’ strike in Egypt in 2008 was a success and what was to be expected of the country’s opposition and ruling party as tension mounted.  The strike was a result of poor pay, rising food costs, and the high poverty rate in the country.  The government claims that it was doing best to combat the global economic crisis, yet, many of the people interviewed say they feel that they are not represented by the government at all.  This video provides wonderful coverage of this post protest atmosphere in 2008 and it may prove useful evidence for the final paper.