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Egypt's Uprising: Not Just a Question of 'Transition' 

By Adam Hanieh

The   B u l l e t

Socialist Project - home 	

E-Bulletin No. 462 February 14, 2011


The events of the last weeks are one of those
historical moments where the lessons of many decades
can be telescoped into a few brief moments and
seemingly minor occurrences can take on immense
significance. The entry of millions of Egyptians onto
the political stage has graphically illuminated the
real processes that underlie the politics of the Middle
East. It has laid bare the long-standing complicity of
the U.S. and other world powers with the worst possible
regimes, revealed the empty and hypocritical rhetoric
of United States President Barack Obama and other
leaders, exposed the craven capitulation of all the
Arab regimes, and demonstrated the real alliances
between these regimes, Israel and the USA. These are
political lessons that will long be remembered.

The uprisings have also shown the remarkable fragility
of the nepotistic regimes across the Arab world. These
regimes depended upon their networks of secret police
(mukhabarat) and thugs (baltajiya), and inculcated a
seemingly unassailable pessimism about the possibility
of change that was reflected in the biting sarcasm of
Arab political humour. But these mechanisms of control
simply evaporated as people shed their fear. The Arabic
word intifada conveys this sense of shaking off, and
the sight of millions of people losing their fear and
gaining a sense of the possible will long remain one of
the most enduring memories of this revolutionary
moment. The historic significance of this process
should not be lost - there has quite literally never
been a moment of such potential in the Arab world.

The purpose of this article is not to recount the story
of these uprisings or to attempt to predict the
possible future scenarios of Egypt's revolutionary
process. Rather, it aims to draw out some of the
broader implications for the Middle East as a whole,
and to argue that these struggles are best understood
through the lens of class struggle. These recent
uprisings show decisively that class remains the key
dynamic to understanding any social transformation and,
simultaneously, that the ways in which 'class struggle'
is expressed will take a variety of forms that
constantly disrupts any reductionist economistic
readings. Capitalism in the Middle East

What this means is that we need to think of 'politics'
and 'economics' - which we are accustomed to conceive
of as separate spheres - as fused and part of the same
struggle. To claim that the Egyptian demonstrators are
primarily concerned with Hosni Mubarak and so-called
'political freedoms' - which has been the dominant
narrative of U.S. and other world leaders and much of
the corporate media coverage - is to distort and
misread the nature of these protests. Clearly the
protests have encompassed a wide variety of social
layers with different demands, but their overall logic
is inextricably tied to broader questions of capitalism
in the Middle East. These questions include: (1) The
global economic crisis and the nature of neoliberalism
in Egypt, and (2) Egypt's role in sustaining patterns
of U.S. domination in the Middle East. These questions
are neither solely 'political' nor 'economic' but
revolve primarily around which class rules Egypt and in
whose interest the Egyptian state functions. The nature
of Mubarak's rule cannot be separated from these
questions, which is why the struggle against political
despotism is inevitably inter-twined with the dynamic
of class struggle. It is through this multifaceted
understanding of class that these uprisings are best
understood. An Expression of the Global Crisis

Thousands of workers from several oil and gas companies
are on strike, protesting in front of the Ministry of
Petroleum, in Nasr City.

The first illustration of the class character of these
popular uprisings is their link to the chain of
protests that have erupted over the last three years in
the wake of the global economic crisis. This is the
Arab world's response to that crisis and powerfully
confounds the dominant narrative - unfortunately
repeated by some radical economists - that the economic
crisis was largely confined to the advanced capitalist
core and that somehow the so-called 'emerging markets'
had escaped the worst effects. Decades of neoliberalism
have tied the Egyptian economy into the capitalist
world market in a very uneven fashion and, as a
consequence, the crisis was to have a devastating
impact on the majority of the country's population.

There have been a variety of mechanisms through which
this transmission of crisis has taken place. First, the
Middle East (and particularly the North Africa region)
is highly dependent upon exports to Europe and these
have fallen precipitously due to the drop in demand
that followed economic contraction. World Bank figures
show that Egypt's year-on-year growth rates of
merchandise exports to the EU dropped from 33% in 2008
to -15% by July 2009.[1] Similarly, Tunisia and Morocco
saw the total value of their world exports fall by 22
per cent and 31 per cent respectively in 2009 - leading
the World Bank to note that these countries were facing
the worst recessions in six decades.[2]

A second transmission mechanism has been the
curtailment of worker remittances on which the Middle
East is highly dependent. In the case of Egypt, workers
tend to migrate to the Gulf countries, Libya and
Jordan. For the rest of North Africa, this labour
migration tends to be toward Europe. Egypt is the
largest recipient of remittances in the Middle East,
representing approximately 5 per cent of national GDP.
With the mass layoffs that continue to characterize the
global crisis - particularly in sectors such as
construction - remittances have fallen rapidly. Egypt
experienced a massive contraction of 18 per cent in
remittances from 2008 to 2009. For a region where these
flows form the basic survival mechanism for millions of
people, the decline has had devastating consequences.

These effects also need to be placed alongside the
other more recent feature of the crisis - the spiraling
cost of basic food and energy items. There is no space
to discuss the complex reasons behind this rising
commodity inflation except to note that it is another
aspect of the crisis itself - partially resulting from
the large quantities of extra cash pumped into the
system to ameliorate the crisis in the core countries,
particularly the U.S. program of quantitative
easing.[3] Once again, the effects have been magnified
in much of the Middle East. In Egypt, annual food price
inflation accelerated to 18.9 per cent in January 2011
from 17.2 per cent in December. These rapid increases
in prices are essentially a form of severe wage cuts
for those segments of the population that are compelled
to spend most of their income on basic items.

But any mapping of this crisis needs to go beyond the
immediate results of global slowdown and be situated
within the three decades of neoliberal 'reforms' that
Egypt has experienced. What neoliberalism has done is
to make the country much more vulnerable to the crisis
itself - massively widening the levels of inequality
and, simultaneously, undermining potential mechanisms
of social support. Precisely because of these outcomes
of neoliberalism, the effects of the crisis were
sharply concentrated on the most vulnerable layers of
Egyptian society. At the same time, and this expresses
the essential class character of the neoliberal
project, a tiny elite benefited enormously from these
economic measures.

This reading of Egypt's neoliberal experience runs
directly counter to the account of international
financial institutions such as the IMF and World Bank.
The IMF was to claim in February 2010, for example,
that Egypt had been "resilient to the crisis" because
"sustained and wide-ranging reforms since 2004 had
reduced fiscal, monetary, and external vulnerabilities,
and improved the investment climate." According to the
IMF, the Egyptian government's successful
implementation of neoliberalism had "bolstered the
economy's durability and provided breathing space for
appropriate policy responses."[4]

The IMF finds evidence for Egypt's resilience in the
relatively high GDP growth rates that the country has
managed to sustain. From 2006 to 2008 growth was around
7 per cent annually and in 2009, when much of the world
was experiencing negative GDP growth, Egypt recorded
4.6 per cent. But what this GDP-centric account does is
to ascribe a general assessment of a country's health
on the basis of aggregate macro-statistics. Embedded in
this approach is the unspoken assumption that a growth
trend at the aggregate level is good for the population
as a whole. It hides the reality that capitalism is an
exploitative system and the outcome of the unfettered
market typically means that overall growth results in
the widening of inequality. It is, in other words, a
statistical expression of the 'trickle-down effect.'
Egypt is a perfect example of the reality behind this
myth: neoliberalism has produced rapid growth rates
but, simultaneously, it has led to worsening living
standards for the majority of the population and the
increased concentration of wealth in the hands of a
tiny minority (literally just a handful of families).

According to official government statistics poverty
increased from 20 per cent to 23.4 per cent from 2008
to 2009. This in itself is a significant increase but
official statistics need to be approached with a large
degree of skepticism. The official poverty line is set
at an absurdly low rate - in fact, some 40 per cent of
Egyptians live on less than $2 per day. The official
unemployment rate is recorded at around 9 per cent, but
again the reality is completely different - more than
half of those outside of agriculture are found in the
"informal sector" and are not properly recorded in the
unemployment statistics. These informal workers live in
a society that lacks any decent social provisions for
education, health or broader welfare. It is estimated,
for example, that one-third of the Egyptian population
is illiterate. The demographic question also looms
large here. In a country where the leadership consists
of men in their 80s, youth make up more than 90 per
cent of the jobless.

The onset of neoliberalism in Egypt is associated with
the series of policy measures known as infitah
(opening) that were launched in the 1970s under
President Anwar Sadat. After Mubarak came to power
following Sadat's assassination, successive governments
continued the policy trajectory set by infitah. There
were two prongs to this policy, particularly as it
unfolded under the aegis of an IMF structural
adjustment programme in 1990-91. First, a series of
policies began to transform social relations in the
rural areas. In 1992, Law 96 of the Egyptian Peoples'
Assembly liberalized agricultural rents and allowed for
the eviction of tenants by landowners after a five-year
transitional period. Rents were raised threefold and -
with the encouragement of international financial
institutions such as the IMF and World Bank, and U.S.
government bodies such as USAID - Egyptian agriculture
shifted toward the type of export-oriented production
that typifies much of African agriculture today.[5]
Hundreds of thousands of Egyptians lost their ability
to survive on the land and streamed into the informal
sector of urban centers - particularly, but not only,
into Cairo.

Second, state employment began to be cut back
dramatically with the privatization (wholly or in part)
of 209 public sector companies (out of a total of 314)
by 2005.[6] The number of workers in these public
sector companies was halved from 1994-2001. In the
banking sector, nearly 20 per cent of the banking
system was transferred from public control to the
private sector. The consequence of this wave of
privatization - hailed by the IMF in 2006 as having
"surpassed expectations"[7] - was a massive downgrading
of working conditions and the further impoverishment of
wide layers the Egyptian population. This was another
contributing factor to the expansion of the army of
informal workers that characterize Egyptian cities and
have played such a critical role in the recent

It is in response to these neoliberal measures - and
the complicity of the official state-linked trade union
movement - that independent forms of worker organizing
emerged in an important wave of strikes in 2006-08.
During 2006 there were 220 major strikes involving tens
of thousands of workers in the largest strike wave that
Egypt had seen in decades.[8] These strikes linked up
with peasant movements, which aimed at resisting the
loss of land due to the neoliberal measures described
above. These earlier forms of organization and struggle
have been a key element to the historical experiences
underpinning the current wave of protests.

But accompanying these neoliberal measures was its
natural corollary: the concentration and centralization
of wealth in the hands of a tiny layer of the country's
elite. As Tim Mitchell has thoroughly described, a key
feature of the 1990-91 IMF structural adjustment was
the transfer of wealth to the private sector. The
result was the strengthening of a handful of massive
conglomerates - such as the Osman, Bahgat, and Orascom
Groups - whose activities stretched across
construction, import/export, tourism, real estate and
finance.[9] It was this class that benefited from the
privatization process, the access to cheap labour, the
government contracts, and the other forms of largesse
distributed through the channels of the state.

The result of neoliberalism was the enrichment of a
tiny elite concurrent with the immiseration of the vast
majority. This is not an aberration of the system - a
kind of 'crony capitalism' as some financial
commentators have described it - but precisely a normal
feature of capitalist accumulation replicated across
the world.

So while the outrage at the wealth of Mubarak and the
state officials associated with his regime is well
deserved, we must not forget that Mubarak - and the
Egyptian state as a whole - represented an entire
capitalist class. The result of neoliberalism was the
enrichment of a tiny elite concurrent with the
immiseration of the vast majority. This is not an
aberration of the system - a kind of 'crony capitalism'
as some financial commentators have described it - but
precisely a normal feature of capitalist accumulation
replicated across the world. The repressive apparatus
of the Egyptian state was aimed at ensuring that the
lid was kept on any social discontent arising from
these worsening conditions. In this sense, the struggle
against the effects of the economic crisis would
inevitably be compelled to confront the dictatorial
character of the regime. The Regional Dimension

This uprising cannot be understood without situating it
within the regional context. Once again, we can see
here the intertwining of the political and economic.
U.S. policy in the Middle East is aimed, first and
foremost, at keeping the oil and petro-dollar rich Gulf
states under its influence. This should not be
interpreted as meaning that the U.S. wants to directly
own these oil supplies (although this may be part of
this process), but that the U.S. wants to ensure that
the oil supplies remain outside of the democratic
control of the people of the region. The nature of
global capitalism and the dominant position of the U.S.
state within the world market rests significantly upon
its control over the Gulf region. Any move toward a
broader democratic transformation of the region could
potentially threaten U.S. power at a global level. This
is why the U.S. so strongly supports the dictatorships
that rule the Gulf states and also why the majority of
the labour in the Gulf is performed by temporary,
migrant workers who lack all citizenship rights and can
be deported at any sign of discontent.

All other relations between the U.S. and other
countries in the region are subordinated and linked to
this goal of U.S. hegemony over the Gulf region. This
includes the U.S.-Israel relationship (which is why any
talk of an 'Israel lobby' controlling U.S. foreign
policy is nonsense). The U.S. sees Israel as a key
pillar of its overall Middle East policy: it is an ally
that is fully dependent upon U.S. military and
political support and can always be relied upon to act
against the interests of the Arab masses. Precisely
because Israel has its origins as a settler-colonial
state founded upon the dispossession of the Palestinian
people, it is seen as a more stable and steadfast
pillar of U.S. power than any of the Arab dictatorships
that are exposed to threat of popular revolt. This is
why the interests of Israel and the Arab dictatorships
are coincident, not opposed to one another - as was so
clearly illustrated in the recent uprisings of both
Tunisia and Egypt.

Beyond the Gulf states and Israel the third leg of U.S.
power in the region is the reliance upon autocratic
leaders such as Mubarak. But lying behind Mubarak (as
with his predecessor Sadat) has always been the
Egyptian military. U.S. linkages to Egypt have largely
been constructed through the military and this is one
of the key reasons why the military plays such a
dominant role in the structures of the Egyptian state.
The vast amount of military aid that Egypt receives
from the U.S. (around $1.4-billion annually) is
well-known as is the role that the military has played
in supporting U.S. policy across the Middle East (the
current head of the Supreme Council of the Armed
Forces, Mohamed Tantawi, fought alongside U.S. troops
in the 1991 Gulf War). The highest ranks of Egypt's
military should properly be considered as part of the
capitalist class with significant economic interests
that overlap with the state and private sector.
Precisely because of the military's central role in
sustaining U.S. power regionally, and its own stake in
the reproduction of Egyptian capitalism, any belief
that the Egyptian military is 'part of the people' or
'neutral and above politics' is a very dangerous

Over the last two decades the linkages between the
political and economic configuration of U.S. power in
the Middle East has become even more explicit. United
States policy has followed a two-pronged track that
ties neoliberalism with the normalization of economic
and political relations between the Arab world and
Israel. The broader goal has been the creation of a
single economic zone from Israel to the Gulf states,
linked under the dominance of the USA. One of the
mechanisms for reaching this goal has been a series of
Free Trade Agreements (FTAs) signed between the U.S.
and Arab states in the region (Morocco, Bahrain, Oman,
Jordan, and Egypt) that, over time, would be knitted
together in a single free trade area enabling the
unfettered flow of capital and goods across the

The bond between normalization and neoliberalism is
powerfully illustrated in the character of these U.S.
bilateral FTAs, which include as part of their
conditions a requirement to lift any boycott or refusal
to trade with Israel. In the case of Egypt (and Jordan)
the link is more advanced than any other state in the
region, and is best shown in the so-called Qualified
Industrial Zones (QIZ). These QIZ provide duty free
access to the U.S. market for Egyptian exports. But
they contain the remarkable provision that a certain
proportion of imports (around 12 per cent) must be
Israeli in order to qualify for duty-free status. The
Egyptian QIZ are concentrated in the textile sector,
with 770 companies operating in the zones at the end of
2009. Since the few short years of their existence they
have grown to be a significant weight in Egyptian
exports to the United States. Egyptian exports from the
QIZ grew at an incredible 57 per cent annually between
2005 and 2008, more than ten times the rate of Egypt's
exports to the U.S. as a whole.[12] In 2010, QIZ
exports made up more than 40 per cent of the value of
all of Egypt's exports to the United States.[13]

It is noteworthy that Egyptian activists have raised
the demand during the recent uprising to shut down
these QIZ. It would be a further powerful step to open
the books of these QIZ - accurate and factual
information about their operations are notoriously hard
to come by and it would be a great service of the
Egyptian people to reveal them to the world. It should
also be noted that similar QIZ exist in the Jordanian
context - with the added twist that many of the workers
in the Jordanian QIZ are badly exploited migrants from

These regional processes thus further confirm the
impossibility of separating the 'economic' and
'political' aspects of the current uprisings. The
demand to cut ties with Israel and abrogate the
regional agreements signed by Sadat and Mubarak are
part-and-parcel of resisting the logic of neoliberalism
and U.S. power in the region. The authoritarian nature
of the state is a direct outcome of these regional
processes and, for this reason, if it is to be
successful, the struggle for greater political freedom
must inevitably take up questions of confronting U.S.
dominance of the region and the particular role Israel
plays in sustaining that dominance.[14] Conclusion

The story that has been told in much of the mass media
and reinforced by the carefully-worded rhetoric of U.S.
and European officials is that these demonstrations
have primarily been a struggle to overthrow individual
tyrants. There is, of course, a one-sided truth to
this: protestors have taken aim at the individual
personages of Ben Ali and Mubarak. But the claim that
this is a struggle for 'democracy' acts to obfuscate
more than clarify what these uprisings are about.
Two-thirds of the Egyptian population is under the age
of 30. This means that the vast majority of the
Egyptian population has not only spent their entire
lives under the rule of Hosni Mubarak; they have also
endured a very brutal form of neoliberal capitalism.
The demonstrations were a direct result of the naked
class power embodied by Mubarak's rule. This was,
perhaps, no more graphically illustrated than by the
way in which the capitalist class essentially fled the
country in the first few days of the uprising.[15]

The anti-democratic character of the Egyptian regime is
not accidental or a question of individuals, but rather
the political form of capitalism in Egypt. It is the
necessary way that capitalism functions in a society
that is marked by astounding (and ever-widening) levels
of inequality, and which is located in a region that is
so central to the constitution of U.S. power at a
global level. For this reason, the demand for
democratic expression in societies characterized by
decades of atrophied public space is one facet of a
much broader struggle that pivots fundamentally around
the question of class. Mubarak was the public face of a
military government and removing that face does not
change the character of military rule or the way in
which that rule sustains the dominance of a particular
class. The political form of the Egyptian state is not
an ephemera. The role of the Egyptian military cannot
be decisively reformed while leaving the structure of
capitalism and its regional linkages unchallenged.

This analysis runs precisely opposite to the rhetoric
of Obama and other world leaders that whitewashes the
West's decades-long support for Mubarak and claims that
the Egyptian people's struggle was simply a question of
political 'transition.' There is a furious attempt now
on behalf of the Egyptian military and elite, the U.S.
government and all their regional allies - including
Israel - to separate the 'political' and 'economic'
characteristics of the popular struggle and confine the
struggle to simply a question of Mubarak. This is
clearly demonstrated by media reports on 14 February
that the military would outlaw strikes and other forms
of independent worker organizing. But the struggle
against the Egyptian dictatorship remains, in essence,
a class struggle. This is not a matter of bombastic
pronouncement or an empty political slogan, but an
inescapable fact. *

Adam Hanieh teaches in the development studies
department at the School of Oriental and African
Studies. He can be reached at ah92_at_soas.ac.uk.


1. World Bank, Global Economic Prospects: Crisis,
Finance and Growth (Washington: World Bank), p.142.

2. World Bank, p.142.

3. See: David McNally, "Night in Tunisia: Riots,
Strikes and a Spreading Insurgency," The Bullet, N.
455, 19 January 2011.

4. IMF, Arab Republic of Egypt - 2010 Article IV
Consultation Mission, Concluding Statement, 16 February
2010, 2010.

5. For a detailed description of this process, see: Ray
Bush, "Civil Society and the Uncivil State Land Tenure
Reform in Egypt and the Crisis of Rural Livelihoods"
(United Nations Research Institute for Social
Development), Programme Paper, N. 9, May 2004.

6. Angela Joya, "Egyptian Protests: Falling Wages, High
Prices and the Failure of an Export-Oriented Economy,"
The Bullet, N.111, 2 June 2008.

7. IMF, Arab Republic of Egypt: 2006 Article IV

8. See Jamie Allison, "Wave of struggle shakes Egyptian
regime," Socialist Worker, 7 April 2007.

9. Timothy Mitchell, 'Dreamland: The Neoliberalism of
Your Desires,' Middle East Research and Information
Project (MERIP), N. 210, Spring 1999.

10. Also see: Gilbert Achcar, "Whither Egypt?," The
Bullet, N. 459, 7 Feburary 2011.

11. See: Adam Hanieh "Palestine in the Middle East:
Opposing Neoliberalism and US Power," The Bullet, N.
125, 15 July 2008.

12. Barbara Kotschwar and Jeffrey J. Schott, Reengaging
Egypt: Options for US-Egypt Economic Relations,
Peterson Institute for International Economics, 2008,

13. Calculated from data at dataweb.usitc.gov.

14. Moreover, any solidarity movements in support of
regional struggles (such as Palestine) also tend to
grow to encompass the nature of the political regime.
It is no accident that the antecedents of this uprising
are to be found in the protests that emerged in
September 2000 in solidarity with the Palestinian
intifada. At that time, as the Egyptian socialist
Hossam el-Hamalawy has noted, students attempted to
come out on to the streets but were crushed by the
regime. See: Mark Levine, "Interview with Hossam
el-Hamalawy," The Bullet, N. 456, 31 January 2011.

15. It was reported in the early days of the uprising
that Egypt's largest business owners flew out on 19
planes to Dubai where they hoped to ride out the storm
of the uprising. 

(((( The  B u l l e t ))))~ * ISSN 1923-7871 *


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