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Abstract
Despite the radical upheavals during the revolution of 2011 whereby the Egyptian public rejected neoliberalism and authoritarianism, Egypt has reverted back to the neoliberal model of economic development. This paper discusses the reasons behind the resilience of neoliberalism focusing on the role of dominant economic ideas, the influence of international financial institutions in policy making and the challenging domestic political environment, which has so far precluded a break from the neoliberal model. The paper ends with a critical assessment of current policies and their broader social implications for different classes and groups in Egypt.
Acknowledgement
I would like to thank the three anonymous peer reviewers for their helpful suggestions. I would also like to thank Dr. Ray Bush for his comments on an earlier draft of this paper as well as acknowledge the research assistance of Sophie Hoover and Sarah T. Hamid.
Notes
1. Greece, Spain and Portugal have had to embrace austerity programmes designed and imposed by the Troika of the European Union, European Central Bank and IMF.
2. PPPs entail outsourcing public services to the private sector, which Hanieh (Citation2011) argues is a different form of privatization, the difference being that in PPPs, the government assumes responsibility for failure, guaranteeing profits for the private sector. PPPs were created by Law 67 of 2010 (Economist Intelligence Unit, Citation2013).
3. Egypt held the consultation not because it needed IMF loans but because an assessment by the IMF would signal to investors that Egypt was ready for private investment.
4. The International Bank for Reconstruction and Development (IBRD) has invested US$4.9bn in 25 projects in energy and the environment, finance and private sector development, transport, water, agriculture and human development. The International Finance Corporation (IFC) committed over US$1bn in 17 projects between 2011 and 2014 in financial markets, chemicals, oil and gas, agribusiness, manufacturing and health care services. The IFC also plays an advisory role in developing the role of the private sector in Egypt through technical aid (World Bank, Citation2015).
5. The Sharaf government reopened past corrupt investment deals. The courts also reversed a number of these deals while issuing sentences to elites linked to such cases. In early 2011, Egyptian courts invalidated the privatization of 11 public sector companies, returning them to state ownership. Investors who had gained control of these companies resorted to international arbitration courts, which fined the government $830m (see Zayed & Khalil, Citation2013).
6. Presidential Decree 97/2012 amended Trade Union Law 35/1976 and Law 105/2012 regulated street vendors. At the same time, the creation of new unions was made more difficult in Article 51–53, which stated: ‘the right to establish associations and civil institutions, subject to notification only. Such institutions shall be notified’ (Charbel, Citation2013).
7. See Egypt’s inflation index for 2014–15: http://www.tradingeconomics.com/egypt/inflation-cpi
8. Egypt had to pay back $1bn, which Qatar had extended to the FJP government under Morsi’s presidency.
9. For The Egypt/GCC Investment Forum, Euromoney Conference, held on 4–5 December 2013, see: http://www.euromoneyconferences.com/Conference/6891/The-EgyptGCC-Investment-Forum.html.
10. The UAE, Kuwait and Saudi Arabia have been involved in both Tunisia and Egypt. In Egypt, they have transferred billions of dollars to the Egyptian Central Bank to ensure the functioning of Egypt’s financial and monetary system (Essam El Din, 4 June Citation2016; Mada Masr, Citation2015, Citation2016b). They have also sunk millions of dollars in grants and loans in major development projects that range from water desalination plants, infrastructure development, agribusiness and real estate through the Sinai Development Project and through the Suez Canal Development Project (on Saudi financial problems, see Kassab, Citation2015). It is important to note that these investments are taking place in the context of a broader investment flows from the EU into Egypt and Tunisia among other MENA countries (Mada Masr, Citation2016a).
11. For a list of UAE companies in Egypt from 1970 to 2013, see: http://www.dailynewsegypt.com/2014/11/29/10bn-total-uae-investments-egypt-gafi-head/
12. Egypt depends on Saudi Arabia to hire its workers and contribute to Egypt’s tourist revenues. Egyptians working in Saudi Arabia constitute 40 per cent of the expatriate work force, numbering 968,000 (Middle East Monitor, Citation2014). Around 400,000 Saudi tourists visit Egypt annually (Estimo Jr., Citation2012).
13. A number of private investors resorted to use of international arbitration through the World Bank against the Egyptian government. Using the threat of capital strikes, private investors extracted concessions from the Egyptian government. Over the past three years, the investors who were at the centre of corrupt privatization deals have managed to push their demands for policy reform onto the Egyptian government.
14. Saudi Abdullah Al-Kaaky purchased the NUBA SEED in 1999 when Egypt was privatizing state-owned enterprises. After 25 January 2011, past corrupt privatization deals whereby state assets were offered at very low prices to investors were brought to Egyptian courts. It was then that NUBA SEED was seized in October 2011 and placed under the authority of the Ministry of Agriculture. In July 2014, the government reversed the earlier decision and handed NUBA SEED back to Al-Kaaky (Farid, Citation2014).
15. The Suez Canal expansion took place in accordance with Law 83/2002, whereby the project is set up as a special economic zone established by presidential decree (Article 3, Law 83/2002 of 2014 Constitution).
19. For adverse impact of the Canal Project on displaced locals, see Charbel (Citation2014).