Roots of Egypt’s Revolt

Friday, February 25, 2011 

By Nouh El Harmouzi

Egypt has been a pressure cooker for decades.  Like others in the region, the Mubarak regime was been sitting atop a simmering political crisis, simultaneously attempting to contain rising Islamist violence and snuffing out pockets of political resistance. The country has been under a continuous state of emergency since the assassination of Mubarak’s predecessor, Anwar Sadat in 1981. That state of emergency has been the foundation of a policy of “stability through continuity,” which in fact has meant the monarchical exercise and transmission of power by a president backed by a military junta and with the support of the barons and apparatchiks of the hegemonic National Democratic Party. It’s now all crashed down, and Mubarak is gone.  How did such a “stable” regime become destabilized so fast?

One reason Egypt’s political development was frozen for so long is the lasting influence of Gamal Abdel Nasser (president 1956 – 1970), who allied the country with the Soviet Union and imposed a policy of economic nationalism and statism, and created huge loss-producing state enterprises and a bloated bureaucracy. Other reasons are Egypt’s geography, geology, economy, history, and geopolitical position, each of which has stifled the generation of an open political and economic system and strengthened the country’s static and authoritarian political system by providing revenue directly to the rulers, without requiring the consent of a productive population.  Since the rulers don’t rely mainly on taxes, they have little reason to promote good governance or to be accountable to the people.

Sources of Revenue

Geography:  The Suez Canal provides a direct passage between the Red Sea and the Mediterranean. As an artificial sea passage between Europe and Asia, the Canal is of major importance because it avoids the long ship passage around Africa. The Suez Canal was nationalized by Nasser in 1956.  Every day nearly 40 vessels traverse the Canal, producing some $3.3 billion per year in income to the state.

Geology: The land of Egypt is blessed – or cursed – with oil reserves that provide foreign exchange earnings estimated at 1.2 billion dollars per year.  The oil industry was nationalized in 1962 and provides rents to the state and the bureaucracy that it has spawned.

Economy: A rigidly controlled labor market has created huge unemployment and forced many Egyptians abroad in search of work.  Every year, Egyptians working in North America, Europe, and the Gulf countries send an estimated $4.3 billion per year to their families, providing an external source of income to the country without creating wealth at home.

History: Egypt’s inherited wealth of tourist sites draws some five million foreign tourists per year from the whole world.  The sites are state owned and managed and accordingly poorly maintained, but because there are no close substitutes for seeing the Sphinx or the Pyramids the state receives billions of dollars in foreign exchange earnings (some $5 billion in 2005).

Geopolitics: Egypt is a central hub in the chaotic politics of the Middle East, as neighbor to Libya, Sudan, Israel, Jordan, and Saudi Arabia (from which it is separated by the Sinai desert and the Red Sea). Apparently without consulting “the Egyptian street” (and the Arab street in general), the government of Egypt was the first Arab government to sign a peace treaty with Israel (the Camp David accords of 1979). In return for being at peace, every year since 1980, the United States has given the Egyptian government over $2.1 billion, including $1.3 in military aid. Egypt’s leaders have occupied an increasingly difficult position, as they are seen as betraying the Arab nationalist ideals of the Nasser and abandoning the cause of the Palestinians.

All those “rents” were captured by the ruling coalition, which until earlier this month were increasingly ruled over by President Mubarak’s son Gamal.  Those rents have supported a vast system of patronage through which Egyptian society has been controlled. The now-defunct National Democratic Party and the state organs it dominated controlled almost all of the media, the unions, the secret services, and the political police. As a result, “democracy” was emptied of its meaning.

A “rent-seeking” political system that cemented its hold on society put Egypt in a perpetual pre-revolutionary situation and created a powerful, but quite brittle, security situation.

The demographics and economics of Egypt also have contributed to the brittleness of the situation.  Egypt’s statist, controlled economic system generates few opportunities to create wealth, in contrast to receiving rents through state employment.  Unemployment is probably over thirty percent, and with some 600,000 young people entering the job market each year, the situation has been worsening.  Moreover, Egypt’s population is both rapidly growing, with some 26 million Egyptians under the age of 15, and poor, with 44 percent living on less than $2 per day.

Plutocratic Land of the Pharaohs

In short, the Land of the Pharaohs is a dual society, with a thin layer of powerful and wealthy people whose wealth has largely derived from rents from the state, ruling over a mass of impoverished people.  The poorly managed “privatizations,” undertaken in a climate of pervasive corruption and hostile business climate have done little to address the country’s intolerable inequalities. Moreover, the country faces a total public debt that is above the 100 percent of GDP and public finances are taking a nose dive, resulting in  delays in payment of wages to public servants, traditionally a strong base of support for such rent-seeking states. The pressure has been building for years, and the example of Tunisia accelerated the process, resulting in an explosion of anger and rage.

The desperate and the left-behind have in the meantime been swelling the ranks of the more radical movements. The Salafists, the Wahhabis and the more radical branches of the Muslim Brotherhood are the main beneficiaries of that process, as other avenues for political dissent have been stifled; the increasing bomb attacks and the recent uprising are the main (rational) consequence of this. But even the Muslim Brotherhood seems to have been surprised by the rising in the streets of Egypt.  There is hope that perhaps something different will emerge, something that goes beyond the confrontation between a quasi-Fascist one-party state and a radical Islamist movement working to take its place.

The roots of the revolt have been growing for years.  It will take some time before we see what will grow from those roots: a pluralistic democracy, a renewed and even more tyrannical military state, or an intolerant Islamist tyranny. 

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