Egypt was World Bank’s “top reformer”

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By now, we are gradually becoming familiar with the poverty, unemployment (especially among youth) and income inequality in Egypt that seems to be fuelling the protests. But what is less well known is that Egypt, like Tunisia, had only recently been viewed as an ‘economic miracle’ after it wholeheartedly pursued standard IMF/World Bank ideas.

(Follow the ‘one million-strong’ gathering in Cairo ‘live’ over Aljazeera here.)

It’s funny that Hillary Clinton now says that Egypt has to”‘reform”. Only in August 2010, the Wall Street Journal reported that Egypt had become Washington’s economic favourite. And last year, the World Bank, in its ‘Doing Business 2010’ report gushingly (and embarrassingly) applauded Colombia and Egypt as the “top global reformers in four of the past seven years”. I kid you not. How wrong can you get? Unless they meant reforms to profit a small minority of the business elite.

Such IMF/World Bank ‘structural adjustment’ policies include privatisation, subsidy cuts, market ‘liberalisation’ and deregulation. Sound familiar?

The turmoil in Egypt, Morocco, Algeria and Pakistan is also due to a sharp escalation in commodity and food prices, part of global capitalistic speculation. In Egypt, food prices have soared 17 per cent of late and that’s going to hurt ordinary people as 40 per cent of Egyptians earn less than US$2 a day. (Don’t you think it’s time we look into our own food security? That’s something this blog has been advocating for some time now – food self-sufficiency by encouraging people to grow some of their own food and promoting organic farming in unused spaces.)

READ MORE:  Is the level of violence in a country linked to inequality?

But what about the IMF/World Bank policies that Egypt pursued – that resulted in the hidden underbelly of corporate-led globalisation invisible in the posh halls of the Global Economic Forum in Davos?

Listen to Samer Shehata, assistant professor of Arab politics at Georgetown University, speaking to Democracy NOW!:

You mentioned the percentage of people under poverty. But also, beginning in 2004, of course, Egypt began implementing economic reforms called for by the IMF—or really forced on them by the IMF and the World Bank—from the late 1980s and the early ’90s, economic reform and structural adjustment programs of privatization, subsidy cuts, opening up markets, deregulation and so on. But the Egyptian government did it in a very hesitant fashion, unwillingly at first. But in 2004, something radical happened, and a new government was appointed, new ministers were appointed, who believed wholeheartedly in the ideas of the IMF and the World Bank. And they quite vigorously pursued these policies. And there was at one level, at the level of macroeconomic indicators, statistics, GDP growth rates, foreign direct investment and so on—Egypt seemed to be a miracle. And this, of course, was the case with the Tunisian model earlier. You’ll remember that Jacques Chirac called it the “economic miracle,” and it was the darling of the IMF and the World Bank, because it implemented these types of reforms earlier. Well, of course, we saw what happened in Tunisia. In Egypt also, from 2004 until the present, the government and its reforms were applauded in Washington by World Bank, IMF and U.S. officials. GDP growth rates were above six percent in consecutive years. Egypt received the top reformer award from the IMF and the World Bank, tremendous foreign direct investment.

But what all of that masked, what all of that masked, was what was going on at the level of real people and ordinary lives. Real incomes were declining as a result of incredibly high inflation, not as high as in Zimbabwe or Venezuela, but inflation rates of 25, 30 percent, eating away at people’s incomes. Basic commodities, foodstuffs, prices were increasing tremendously. In 2008, about 13 or 14 people, Egyptians, died as a result of conflicts resulting from them waiting in long bread queues, because there wasn’t enough bread, and violence would erupt. People were waiting in line for hours to obtain subsidized bread, which is also one of the bases of this regime, you see. It has to do that in order to at least have some kind of acquiescence from the public. So, what these macroeconomic indicators masked was what people were experiencing at the level of everyday life and real income. As I mentioned, poverty was increasing. Income inequality was increasing. And even corruption was increasing, according to Transparency International.

That’s precisely the danger of putting all our focus on implementing the corporate agenda: tax cuts for the rich, budget and subsidy cuts in social spending to balance the fiscal budget, a policy of low wages to attract FDI, weak unions, privatisation of profits, socialisation of losses…

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The Wall Street Journal reported in August 2010:

While the Egyptian economy has been growing strongly since 2005, says Kamal Abbas, general coordinator of the Center for Trade Union and Workers Services in Egypt, the gains have gone overwhelming to well-off. “The gains touch only certain segments of the population — the upper crust of society,” he says.

“You have employees making $20 a month” in some new businesses, he argues. “What kind of reform is that?”

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15 Comments on "Egypt was World Bank’s “top reformer”"

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semuanya OK kot
semuanya OK kot

More nuclear plants anyone? No? How about a space program?

Hawas
Hawas

Malaysia has 11,000 students in Egypt.

Yet none of them has learned archealogogy from the Egytians so that they can return home to unearth the relics in Malaysia to prove that there was a bigger empire here long before Parameswara got lost in the jungle and form form Melaka after seeing a mousedeer.

Syed
Syed

Each time you receive a ‘goodie’ from BN, you are helping to plunge the country into greater debt.

Malaysia is closer to bankruptcy now than it was during the 1997 Asian financial crisis which ravaged economies in the region.

The increase in government bonds issued by the Najib administration would only worsen national debt, which was greater today that it was back then.

Taikohtai
Taikohtai

Moo_t said: ……Chinese are always being space goat

Space goat? That’s hilarious!!

wandererAUS
wandererAUS

Egypt, top reformer!…by whose standard? The Yankees or the Zionists? Who are the kingpins of IMF/World bank?

Yacht Ensign
Yacht Ensign
I am sickened by the call for the Malaysian youth to emulate the uprising in Tunisia and Egypt. It is easy to rouse public sentiments and get them to the streets, but ultimately, someone has to rebuild from somewhere, most likely from the ashes. Understand the reasons for the massive street protests in Tunisia, Egypt and even Thailand and Indonesia. We have a lot of young PTDs in the government. I sure hope they are reading all the briefs they can get and trawl in the historical trend leading to such events. Then, I urge them to turn their eyes… Read more »
Khaidil
Khaidil
I don’t think the people in Cairo like to protest in groups and in public But after 30 years of supression, they will do anything. Likewise in Malaysia. There sre so many jobless graduates (who cannot be absorbed into workforce due to reasons we all know) while the government is continued to build more campus to produce more local gradueates. The civil servant is bloated while the country is saddled with debt each day in an alarming way. A day will come when the number of jobless graduates have ballooned to an alarming number, and these people will become disillusioned… Read more »
Phua Kai Lit
Phua Kai Lit

This is a good book to read:

“Unholy Trinity: the IMF, World Bank and WTO”

by Richard Peet

Aznil
Aznil
We cannot trust those words from IMF, World Bank and WTO. Just like we cannot trust any ‘good news’ from BN via its mouthpiece NST and RTM – … manipulated news to suit the agenda of certain people. As a rakyat we are the better judge of the situation. If you cannot tahan the barang naik that affects your household, please do not blame it on to world economy as it is the duty of our elected ministers to help us. We should not accept lame excuse from our ministers to attribute their failure to external factors like 9/11 incident… Read more »
Ong Eu Soon

When WHO talk talk about H1N1, SARS, AIDS, blood sugar all those are big time bull…. But unfortunately majority of the world population can’t think for themselves, especially the Chinese. They will believe whatever in the press. Ask any human being on planet Earth about China, majority of them will tell how good is the economy of China without be able to see the hidden problems that haunted the Chinese.

moo_t

Here is a transcript I picked from China economic review on Egypt :
Egypt is an interesting country. The GDP growth maintain between 6-7%, even during crisis, is fell barely to 5%. However, Egypt suffer tremendous high inflation. During good year ,it is about 10% per annum, bad time, around 20%.

In Egypt, the regime can blame nobody but themselves. But in Malaysia, Chinese are always being space goat, even government monopolies is EVERYWHERE.

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