IMF’s Social Protection between Rhetoric and Action: The Case of Egypt

Abstract:

A substantial body of literature has been produced about the IMF’s drift away from neoliberal orthodoxy in the aftermath of the 2007/08 global financial crisis. This article assesses the degree to which the IMF’s post-crisis change in discourse toward adding more emphasis on social protection was put into action in Egypt’s 2016 economic reform program. Beyond a noticeable discursive change, our research found that there was very little—if any—practical change. First, we demonstrate how the social component of the program was much smaller than the neoliberal or ‘business-as-usual’ component, not only as a share of program measures but also in terms of their magnitude. Second, we found that even this small component had a very similar equivalent in the last major program between the IMF and Egypt in 1991, thus rendering it less novel, and therefore casting doubt on the IMF’s claims of change.

Key Words:

• Discourse
• Egypt
• International Monetary Fund (IMF)
• Inequality
• Neoliberal economic policies
• Social protection

Acknowledgments

We thank the Egypt office of the Friedrich Ebert Stiftung for financially supporting this study. We also would like to express our gratitude to the experts who responded to the survey, which formed the foundation upon which we developed this study. In particular, we would like lar to thank Mahinour ElBadrawi, Mohamed Gad, Wael Gamal, Maher Hamoud, Salma Hussein, Noaman Khalid, Abdelhamid Mekawy, Mohamed Ramadan, and all the other experts who preferred to remain anonymous. Last but not least, we are immensely indebted for the peer reviewers and journal’s editors invaluable feedback and remarks.

Disclosure Statement

The Friedrich-Ebert-Stiftung (Egypt Office) provided financial support for the research undertaken for this study.

Notes

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3 Nils Brunsson (1993) Ideas and Actions: Justification and Hypocrisy as Alternatives to Control, Accounting, Organizations and Society, 18(6), pp. 489–506.

4 Kentikelenis et al., IMF Conditionality, p. 4.

5 David Harvey (2007) Neoliberalism as Creative Destruction, Annals of the American Academy of Political and Social Science, 610(1), pp. 21–44.

6 Brunsson, Ideas and Actions.

7 David R. Henderson (2020) Income Inequality Isn’t The Problem, Hoover Institution. Available online at https://www.hoover.org/research/income-inequality-isnt-problem, accessed May 10, 2020.

8 Yujiro Hayami 2003, A. Joya 2020.

9 Joseph Stiglitz (2012) The Price of Inequality (New York: Norton); P. Krugman (2014) Inequality Is a Drag, The New York Times (The New York Times). Available at https://www.nytimes.com/2014/08/08/opinion/paul-krugman-inequality-is-a-drag.html, accessed May 10, 2020.

10 Adam Hanieh (2015) Shifting Priorities or Business as Usual? Continuity and Change in the Post-2011 IMF and World Bank Engagement with Tunisia, Morocco and Egypt, British Journal of Middle Eastern Studies, 42(1), pp. 119–134.

11 Carlos Lopes (2012) Economic Growth and Inequality: The New Post-Washington Consensus*, RCCS Annual Review, (4).; A. Cobham (2017) Tax justice, the new Washington consensus? Tax Justice Network. Available online at https://www.taxjustice.net/2017/10/19/tax-justice-new-washington-consensus/, accessed May 10, 2020.

12 Jonathan D. Ostry, Prakash Loungani & Davide Furceri (2016) Neoliberalism: Oversold? International Monetary Fund. Available online at https://www.imf.org/external/pubs/ft/fandd/2016/06/ostry.htm, accessed May 10, 2020.

13 IMF (2017a) IMF Fiscal Monitor: Tackling Inequality, October 2017, International Monetary Fund. Available online at: https://www.imf.org/en/Publications/FM/Issues/2017/10/05/fiscal-monitor-october-2017, accessed May 10, 2020.

14 Kentikelenis, et al., IMF Conditionality, p. 19.

15 Hanieh, Shifting Priorities or Business as Usual.

16 Mohammed Mossallem (2015) The IMF in the Arab World: Lessons Unlearnt, SSRN Electronic Journal. Available online at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2705927, accessed May 10, 2020.

17 Kentikelenis et al., IMF Conditionality.

18 Bessma Momani (2010) IMF Rhetoric on Reducing Poverty and Inequality, Global Governance, Poverty and Inequality, 1st ed, pp. 71–90 (Milton Park, Abingdon, Oxon: Routledge).

19 For the list of measures, see: https://drive.google.com/drive/folders/1_WWZhjs2E7CNcrNoCkLCg5G88fuW59eG?usp=sharing, date of access?

20 For the list of experts and summary of responses, see: https://drive.google.com/drive/folders/1_WWZhjs2E7CNcrNoCkLCg5G88fuW59eG?usp=sharing, date of access?

21 Neoliberal thought and practice most commonly are associated with ‘laissez-faire’ economics, i.e., the belief in sustained economic growth as the central means to achieve human progress; the claim that ‘free markets’ provide the most efficient resource allocation (including of trade and capital); and an emphasis on ‘minimal’ state intervention. Many scholars, however, argue that neoliberalism is not simply a limitation on the state but also a refunctioning of it. For examples of this argumentation, see the previously cited works by Harvey (2007); Hanieh (2013); and Joya (2020).

22 FAO (2016) What Is Social Protection?, Food and Agriculture Organization of the United Nations. Available online at: http://www.fao.org/social-protection/overview/whatissp/en/, accessed May 10, 2020.

23 Norman Fairclough (2015) Language and Power (London: Routledge); and J. Blommaert (2009) Discourse: A Critical Introduction (Cambridge: Cambridge University Press), p. 15.

24 Thomas Stubbs, Alexander Kentikelenis, David Stuckler, Martin McKee & Lawrence King (2017) The Impact of IMF Conditionality on Government Health Expenditure: A Cross-National Analysis of 16 West African Nations, Social Science & Medicine, 174, pp. 220–227.

25 Amr Adly (2020) Cleft Capitalism: The Social Origins of Failed Market Making in Egypt (Redwood City: Stanford University Press).

26 IMF (2020) IMF Extended Fund Facility, International Monetary Fund. Available online at: https://www.imf.org/en/About/Factsheets/Sheets/2016/08/01/20/56/Extended-Fund-Facility, accessed May 5, 2020.

27 IMF (2017b) Arab Republic of Egypt: Request for Extended Arrangement Under the Extended Fund Facility-Press Release; Staff Report; and Statement by the Executive Director for the Arab Republic of Egypt, International Monetary Fund. Available online at: https://www.imf.org/en/Publications/CR/Issues/2017/01/18/Arab-Republic-of-Egypt-Request-for-Extended-Arrangement-Under-the-Extended-Fund-Facility-44534, accessed May 2, 2020.

28 Ibid, p. 24.

29 IMF (2017c) Arab Republic of Egypt: First Review Under the Extended Arrangement Under the Extended Fund Facility and Requests for Waivers for Nonobservance and Applicability of Performance Criteria – Press Release; Staff Report; and Statement by the Executive Director for the Arab Republic of Egypt, International Monetary Fund. Available online at https://www.imf.org/en/Publications/CR/Issues/2017/09/26/Arab-Republic-of-Egypt-First-Review-Under-the-Extended-Arrangement-Under-the-Extended-Fund-45273, accessed May 10, 2020.

30 Ibid, pp. 5–6.

31 Mohamed Sultan (2019) A Clearer View of the Rock-Bottom: On Poverty, Hunger, and Inflation, Arab Forum for Alternatives, available online at: http://www.afalebanon.org/en/publication/8213/a-clearer-view-of-the-rock-bottom-on-poverty-hunger-and-inflation/, accessed August 21, 2021.

32 Beesan Kassab (2019) Austerity Measures a Major Cause of Poverty Increase, Statistics Agency Advisor Says, Mada Masr, available online at: https://madamasr.com/en/2019/09/04/feature/economy/austerity-measures-a-major-cause-of-poverty-increase-statistics-agency-advisor-says/, accessed May 10, 2020.

33 Hassan Sherry (2017) Debunking the Myth of a Changing IMF: Unpacking Conditionality in the Arab Region Post-Uprisings, Arab NGO Network for Development. Available at: http://www.annd.org/data/file/files/IMF-DebunkingtheMythofaChangingIMF.pdf, accessed May 10, 2020.

34 World Health Organization (2020) Domestic General Government Health Expenditure (GGHE-D) as Percentage of Gross Domestic Product (GDP) (%). Available online at: https://apps.who.int/gho/data/view.main.GHEDGGHEDGDPSHA2011WBv, accessed May 10, 2020.

35 Centre for Economic and Social Rights (2019) Meeting the demands for economic and social justice, available online at: https://www.cesr.org/sites/default/files/CESR%20and%20EIPR%20Joint%20Egypt%20UPR%20Submission%20online%20.pdf, accessed May 15, 2020.

36 IMF, Request for Extended Arrangement Under the Extended Fund Facility. Date? Online?

37 For definitions of prior actions and other forms of policy commitments, see: https://www.imf.org/en/About/Factsheets/Sheets/2016/08/02/21/28/IMF-Conditionality,accessed August 16, 2021.

38 ‘Partially met’ groups two conditions: first, it applies if a measure was marked in the review report as ‘met with delay’ or if it was marked as ‘met’ with some reservation either by the IMF or by the authors.

39 IMF, Request for Extended Arrangement Under the Extended Fund Facility, p. 56.

40 Ibid, p. 12 (emphasis added).

41 International Monetary Fund (2019b) Egypt-IMF Executive Board Completes Fifth Review under the Arrangement under Extended Fund Facility (EFF). Available at https://www.imf.org/en/News/Articles/2019/07/24/pr19300-egypt-imf-executive-board-completes-fifth-review-under-arrangement-under-eff, accessed May 10, 2020.

42 Kassab (2019) Austerity measures a major cause of poverty increase. Cited earlier? If, full citation needed here.

43 The amount reaches EGP600 by the program’s conclusion.

44 IMF, Request for Extended Arrangement Under the Extended Fund Facility, p. 17.

45 World Bank (2019) Labor Force Participation Rate, Female (% of Female Population Ages 15+) (Modeled ILO Estimate)—Egypt, Arab Rep., World Bank. Available online at: https://data.worldbank.org/indicator/SL.TLF.CACT.FE.ZS?locations=EG, accessed May 22, 2020.

46 Ibid.

47 Caroline Krafft, Ragui Assaad & Caitlyn Keo (2019) The Evolution of Labor Supply in Egypt from 1988-2018: A Gendered Analysis (Cairo: Economic Research Forum), p. 35.

48 Yousef Saba (2019) World Bank Sees Egypt Economy Growing 5.8% in 2019/20, Reuters. Available online at https://www.reuters.com/article/egypt-economy-worldbank/world-bank-sees-egypt-economy-growing-58-in-2019-20-idUSL3N26U3HC, accessed May 22, 2020.

49 Enterprise (2019) GDP Grows 5.6% in 1Q 2019-2020 Mainly Fueled by Five Sectors. Available online at: https://enterprise.press/stories/2019/10/31/gdp-grows-5-6-in-1q2019-2020-mainly-fueled-by-five-sectors/, accessed May 22, 2020.

50 IMF, First review, p. 11.

51 Mada Masr (2018) Government Raises Household Electricity Tariffs by up to 69.2%, Available online at: https://madamasr.com/en/2018/06/12/news/u/government-raises-household-electricity-tariffs-by-up-to-69-2/, accessed May 11, 2020.

52 A. Abdelaty & A. Ismail (2018) Egypt Hikes Fuel Prices in IMF-Backed Austerity Drive, Reuters. Available online at: https://www.reuters.com/article/us-egypt-economy/egypt-hikes-fuel-prices-in-imf-backed-austerity-drive-idUSKBN1JC06A, accessed May 10, 2020.

53 Authors' calculation based on official figures published by the Egyptian Ministry of Finance (MOF). See here for detailed figures: https://mof.gov.eg/files/8c6d0030-4e86-11eb-97af-37aa1e0e70a6.pdf. accessed Aug 16, 2020.

54 Mubasher (2018) EGX Stamp Tax Revenue Hits EGP 3bn in 1st Yr, Mubasher Info. Available online at: https://english.mubasher.info/news/3295480/EGX-stamp-tax-revenue-hits-EGP-3bn-in-1st-yr/, accessed May 23, 2020.

55 IMF, First review, p. 35.

56 African Development Bank (1999) Arab Republic of Egypt Structural Adjustment Loan 1991-1994 Project Completion Report 1999-2001, African Development Bank. Available at https://www.afdb.org/fileadmin/uploads/afdb/Documents/Project-and-Operations/ADB-BD-IF-99-130-EN-EGYPT-PCR-SAL.PDF, accessed May 10, 2020.

57 Hala Abou-Ali, Hesham El-Azony, Heba El-Laithy, Jonathan Haughton and Shahidur R. Khandker (2009) Evaluating the Impact of Egyptian Social Fund for Development Programs, World Bank. Available online at: http://documents.worldbank.org/curated/en/970431468037489618/pdf/WPS4993.pdf, accessed April 30, 2020.

58 IMF (2017b) Arab Republic of Egypt: Request for Extended Arrangement Under the Extended Fund Facility-Press Release; Staff Report; and Statement by the Executive Director for the Arab Republic of Egypt, International Monetary Fund. Available online at: https://www.imf.org/en/Publications/CR/Issues/2017/01/18/Arab-Republic-of-Egypt-Request-for-Extended-Arrangement-Under-the-Extended-Fund-Facility-44534, accessed May 2, 2020.

59 http://povertydata.worldbank.org/poverty/country/EGY

60 AFDB, Project Completion Report.

61 IMF, Fifth review, p. 3

62 Ibid.

63 International Monetary Fund (2019) Egypt-IMF Executive Board Completes Fifth Review under the Extended Fund Facility Arrangement, available at https://www.imf.org/en/News/Articles/2019/07/24/pr19300-egypt-imf-executive-board-completes-fifth-review-under-arrangement-under-eff, accessed December 4, 2020.

64 Kentikelenis et al., IMF Conditionality, p. 21.