Mubarak's Egypt

Fragmentation Of The Political Order

Robert Springborg

• Publisher: Routledge
• Year: 2019
• ISBN:
  9780429722110
• Edition: 1
• Topic: Politique et relations internationales
• Subtopic: Politique du Moyen-Orient

The starting point for the investigation outlined in this text is the relationship between political authority and economic change in Egypt and will be the presidency and the highest level of the political elite. The bulk of the field research on which this book is based was conducted in Egypt in 1986.

1
Egypt Confronts the New Orthodoxy of Development

As one of the world's great riverine civilizations, Egypt has like a magnet attracted powerful states endeavoring further to expand their influence. The great powers and their successors, including since the Napoleonic invasion of 1798 the French, British, Russians, and now the Americans, have sought to remake the Egyptian political economy according to a distorted, dependent, mirror image of their own. The French mission civilisation, undertaken by Napoleon and his countrymen who followed, was too abbreviated to restructure the economic foundations of the state, although Egyptian elites continued to imitate French culture long after France's paramountcy had waned. The French language and accompanying behavioral style afforded some defense, however symbolic and psychological, against the reality of British hegemony. For their part the British succeeded in establishing an export-oriented agricultural economy presided over by a semifeudal notability and aristocracy, arrangements that satisfied British economic demands and accorded with English perceptions of the politically right and proper. Three-quarters of a century later the Soviets exported a pale image of their "scientific socialism," which was reerected along the Nile in the form of Gamal Abdel Nasser's Arab Socialism. The Nasserite political system, with its emphasis on the single party, was made in the 1960s to conform stylistically, if not substantively, with the Leninist model. U.S. efforts since 1974 have contributed to the emergence of an economy with some recognizable neoclassical elements, while a version of political democracy has sent down a few tentative roots.

None of this is unique in the history of the modern world. Most Third World states have had to stage cultural, economic, and political retreats, either as a result of an immediate colonial presence or because cliental relations with superpowers are fatally attractive, in part because they hold the promise of potential economic and other advantages, at least to some portion of the population. But Egypt is unusual in that it has had so many such relationships in the nineteenth and twentieth centuries and because of the degree of enthusiasm and commitment that outsiders have devoted to their Egyptian entanglement. Within the space of a decade Egypt has been the largest recipient of Soviet aid and, after Israel, the leading beneficiary of U.S. aid. The desire to garner influence in Cairo seems to be impelled by more than sheer strategic concerns. Because it is so old, so apparently immutable, and so intriguing, Egyptian civilization offers an irresistible lure to those who are intent on proving the worth of their cultures and economic and political systems on a global scale. If Egypt can be remade in the image of the conqueror or patron, the rest of Africa and Asia has been put on notice.

U.S. attempts to influence the path of development in Egypt since World War II are illustrative. In the late 1940s and early 1950s, when U.S. influence in Egypt was less than it is now, Western ideas on development were nevertheless incorporated readily into the plans of those who were to rule in the name of Nasserism. Those notions, heavily influenced by Keynesian theories and by the involvement of European economists in the League of Nation's efforts to rebuild Eastern Europe in the wake of World War I, began to appear in U.S. writings on development after World War II. Influenced by their European colleagues, impressed by their successes in mobilizing the governmental war effort, and in some cases encouraged by their previous efforts in using the federal government and its New Deal to combat the Great Depression, these apostles of development, newly entrenched in academic institutions and in the United Nations, the International Monetary Fund (IMF), and other development agencies, called for the state to play the leading role in Third World economies. Mobilization of sufficient capital, integration of national efforts through planning, pursuit of a consistent policy of import substitution, and management of the country's agricultural resources required, in this view, direct governmental intervention. Less concerned with the political structure in which these choices were to be made than with the commitment to governmental dynamism, these theorists believed that the newly emerging nationalist middle classes would in any case be politically more sophisticated than, and preferable to, the entrenched, neofeudalist elites that the European powers had nurtured.¹ Consistent with these political and economic preferences was the prescription of land reform, which, it was believed, would strike a blow against retrograde elites while simultaneously enhancing governmental capability to manage this critical sector.

Such advice fell on fertile ground in Egypt. At the broadest level it seemed compatible with the basic trends of Egyptian economic history. The quintessential hydraulic society of antiquity, Egypt had long experience with governmental intervention into the economy during the pharaonic and mamluk eras, even with direct management of the always vital agricultural sector.² The experiment with neofeudal, latifundia-style agriculture, which was initiated by Muhammad Ali and brought to fruition under the British, was, according to this reading of economic history, a retrograde step and one alien to Egyptian economic traditions. Since colonialism had imposed the emphasis on agriculture and its neofeudal organization, proper decolonization and one consistent with this version of Egypt's historiography required a land reform regulated by the state, coupled with industrialization.

But it was not just reaction to colonialism and consonance with prevailing Egyptian interpretations of the nation's history that underlay the attraction to Egypt's new masters of the writings of Doreen Warriner, Arthur Lewis, Gunnar Myrdal, and the other apostles of the Big Push by the state.³ After July 1952, the revolutionary elite sought to uproot and displace vestiges of the ancien regime, for which there seemed no better tool than centralized control of the economy and polity. The prescriptions of the West's leading theorists of development fortuitously dovetailed with this preference. This, in retrospect, was unfortunate, for it raised U.S. expectations. Egypt was elevated to the status of a test case for the viability of U.S. endorsed and supported modernization programs led by nationalist-inclined middle classes armed with progressive theories of reform. That these hopes were not realized and that Egypt turned away from the U.S. approach and embraced a mixture of the Yugoslav and Soviet models contributed substantially to the stormy U.S.-Egyptian relationship of the next two decades and more.

Neither side, however, appears to be guided by the maxim of "once burned, twice shy." Since the October 1973 Arab-Israeli War, U.S. Egyptian relations have grown steadily closer. Accompanying this rapprochement has been increasing U.S. pressure for Egypt to adopt the new orthodoxy of development subscribed to by political and academic elites in the United States and, to a lesser extent, other Western nations. This orthodoxy, which like the previous one just outlined is concerned mainly with Third World economies rather than polities, is founded on the assumption that real economic growth can be had through broad-based, systematic efforts to integrate national economies into the world capitalist order. Inward-looking import substitution strategies are condemned as counterproductive. Protectionism is seen as leading to distortions of the economy that will become either albatrosses around the necks of the nation's taxpayers or targets for long-overdue "rationalizations." Overvalued currencies, excessive tariffs, and other barriers to trade are described as bugbears of export-led growth. Recommendations for domestic economic reform concentrate on reducing governmental controls and increasing incentives, particularly through the neoclassical pricing mechanism. Governmental efficiency is to be improved by contracting the scope of the public sector while the private sector is encouraged to move into the vacuum. Foreign aid is, at least in part, to be redirected toward the private sector, aid to government being increasingly restricted to programs designed to develop administrative capacity based on adaptive management principles. The relatively successful export-oriented economies of the Pacific Rim are offered by adherents of the new orthodoxy as proof of the pudding, with occasional references to Turkey as a Middle Eastern example of what policies of currency devaluation coupled with economic liberalization can achieve.⁴

As the recommended package of policies has become more standardized under the Reagan Administration, so too has the approach to facilitating its adoption. Out of the belief that the doctor knows best, ailing Third World economies have been forced to swallow stiff doses of appropriate fiscal remedies. These bitter pills have been sweetened by aid and loan programs, which increasingly are withheld from those who refuse to take their medicine. Members of the U.S. academic community have been recruited to facilitate the application of leverage. According to Anne Krueger, a staunch advocate of economic liberalization for the Third World, "difficulties of the transition" (from closed to open economies) should provide foci for research agendas.⁵ Similarly, "policy space research" has been proposed as a method whereby social scientists should investigate specific Third World decision-making environments for the purpose of assisting those in aid programs to design packages that are most likely to achieve maximum leverage to bring about reforms.⁶ Antecedents for the role of academics as midwives to reform are to be found in a previous era of U.S. enthusiasm for exporting its development orthodoxy, which was the early 1960s. The most noteworthy and durable contribution of that period was Albert O. Hirschman's Journeys Toward Progress, which provides a handbook for savvy elites seeking to build reform coalitions.⁷ For Hirschman and for his successors, reform—in reality a synonym for adopting policies currently in vogue in Washington—is virtually always possible. It is just a question of pulling the right political levers.

Egypt's Reluctance to Adopt the New Orthodoxy

Egypt, currently the Third World's leading beneficiary of Western aid and among the most carefully studied of non-Western societies, has been painfully slow in adopting the new orthodoxy of development. Disappointment with Egypt's pace of change among officials within the United States Agency for International Development (USAID) and among others committed to liberalization is growing and is compounded by three factors. First, it is remembered that Egypt in the post-World War II period was a leader among the less developed countries in adopting U.S.-endorsed reform programs. Why then and not now, it is asked? Was it just because those reforms endorsed an expanded role for the state? Second, in most senses Egypt remains the leading Arab state. Its role as bellwether and even cause of change in the Arab World is reduced but still potent. If Egypt remains recalcitrant in the face of U.S. pressure, it suggests there is little hope for spreading the new orthodoxy elsewhere in the region. Finally, hopes for liberalization of the Egyptian economy and polity were raised by Anwar al-Sadat's infitah (opening), a reform program that survived its author's assassination but in modified form. The excesses of the infitah served to discredit economic liberalization among broad sectors of the population. Reforms in the directions of export-led growth and privatization now confront more political obstacles than they did under Sadat, when large numbers of Egyptians saw in such changes a panacea for their economic problems. The bungled reform has, in short, made the task of the Muhammad Husni Mubarak generation of reformers more difficult.

Students of Egypt's political economy differ in their assessments of the possibility for structural changes. There are those who emphasize patterns of continuity in Egypt's bureaucratic political culture and in the composition of its elite, thereby suggesting that a transformation of the way in which the Egyptian political economy operates is improbable.⁸ Another view is that while Egypt's political economy is in its basic form immutable, it will oscillate between "heavily statist structures and considerably more liberal ones."⁹ Cooper sees this dynamic as the consequence of class relations in state capitalism, whereas Bianchi, for whom Egypt is an example of "state corporatism," sees the pendulum being driven by groups assuming relatively pluralist or corporatist forms.¹⁰

A third academic view concurs in the basic assessment of Egypt as being an authoritarian state prone to semiliberal digressions from the norm, but admits of the possibility that real structural changes could occur. Moore, for example, argues that privatization is primarily "a political tactic for sustaining authoritarian regimes rather than a set of reforms for stimulating free enterprise or markets." But, continues Moore, privatization may set in motion a process whereby group interests, particularly those of "private entrepreneurs and their financial backers," become sufficiently cohesive to "transform the clientelist bases of [authoritarian] politics."¹¹ Richards concurs in much of this, arguing that the process of liberalization in Egypt over the past decade has greatly enhanced the power of the bourgeoisie. The breakthrough suggested as possible by Moore has not come about simply because the incumbent elite has been spared making fundamental choices by virtue of "rents," by which Richards means income from oil, worker remittances, Suez Canal revenues, and tourism. Accordingly, now that income from the "big four" has seriously deteriorated, Richards predicts that the Egyptian political economy could undergo real structural change.¹²

Waterbury, like Richards, sees the key variable determining the shape of the political economy as being sources of income arising outside the productive sectors of the Egyptian economy, although for Waterbury those sources are entirely external: In the earlier era of import-substitution industrialization, he includes cheap energy, Food for Peace aid, expanding international trade, and significant aid generated by the Soviet-U.S. competition for influence. "Easy money" has for Egypt made possible a "softhearted" authoritarianism. "Neither leader (Nasser or Sadat) felt that it was necessary or desirable to sweat significant segments of the citizenry for the sustained savings that might have made relatively autonomous growth possible." But with the change of the external environment Egypt has been forced to abandon import-substitution industrialization, and in 1979, according to Waterbury, it moved into an export-led growth phase of accumulation in which the state is "acting as catalyst to and partner in alliances with foreign private capital and technology, and, on occasion, with the Egyptian private sector." As far as political changes are concerned, Waterbury sees a "surface liberalism" as having accompanied the shift from import substitution to export-led growth. He suggests that the political system is too weak to impose the "policing of labor and general belt tightening" necessary to make Egyptian goods internationally competitive, although he admits of the possibility that in the coming years this could change in the direction of the corporatist Latin American states as foreign capital in alliance with Egyptian affiliates in banking and manufacturing could impose a much more austere political regimen.¹³

Most writers concur then in the observation that Egypt since Nasser has had a weak authoritarian state that is now having to preside over an economic liberalization as a result principally of externally imposed financial stringencies. There is disagreement as to whether this in turn will lead to only a transitory "surface liberalism," to a more institutionalized pluralism, or to a Latin American-style corporate state in which the military, allied with the captains of private industry and finance, rules.

Those in charge of attempting to induce Egypt to adopt the various elements of the new orthodoxy of development, a category that includes officials not only from USAID but also those of the World Bank, IMF, and other bilateral and multilateral aid agencies, have not given as much thought, at least in print, to the connection between economics and politics. Their operating assumption, to the degree that it can be identified, appears to be that a more liberal economic system is likely to facilitate the emergence of a more liberal polity.¹⁴ The academic theoreticians and the bureaucratic practitioners are therefore of like mind in the belief that inducing economic change will cause reverberations through the political system. They also agree that Egypt has reached a crossroads. Revenues arising from sources outside the economy's productive sectors are now seen as insufficient to meet the obligations of maintaining the soft authoritarian state that doles out subsidies to the poor and unconscionable profits to the rich and powerful. The social contract negotiated by the weak state between contending classes is under severe threat, and most Western opinion concurs that it will have to be revised.

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Table of contents

• Cover
• Half Title
• Title
• Copyright
• Contents
• Acknowledgments
• A Note on Transliteration
• 1 EGYPT CONFRONTS THE NEW ORTHODOXY OF DEVELOPMENT
• 2 MUBARAK, THE POLITICAL ELITE, AND THE CHANGING POLITICAL ECONOMY
• 3 THE BOURGEOISIE AND THE STATE
• 4 THE MILITARY
• 5 THE SYSTEM OF POLITICAL CONTROL
• 6 SECULAR AND ISLAMICIST OPPOSITION
• 7 ECONOMIC ASSISTANCE AND THE LIMITS OF POLICY LEVERAGE
• 8 CONCLUSION
• Index