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December 15, 2011
Bread protest in Egypt

Like most revolutions, Egypt’s uprising was fueled by economic grievances. Widespread frustration with several parallel phenomena -- the authoritarian regime’s hijacking of the economy, state- sponsored corruption, mounting inequality, monopolism and cronyism -- brought together diverse segments of society in shared discontent. Several preceding years of sustained economic growth led by the ousted Nazif cabinet never trickled down, and by the time of the January uprising poverty had engulfed at least one fifth of Egyptians while another fifth remained dangerously close to the poverty line. But while Egyptians are clear on what they don’t want – corruption, unemployment, and poverty – the economic philosophy that will guide Egypt’s government remains a matter of speculation. As parliamentary elections continue to unfold, new parties and political forces are promoting competing economic visions, some calling for an overhaul of the neoliberal, free market reforms associated with Hosni Mubarak’s regime. With preliminary election results indicating that Islamist parties could hold up to 70 percent of the parliamentary seats, the political programs of the Muslim Brotherhood’s Freedom and Justice Party (FJP) and Salafi Nour Party offer some indication of the economic policies that might emerge from Egypt’s next government.

Debates over Egypt’s current economic direction are being driven by deep frustration with the former regime’s failure to redistribute the gains of economic growth to the most disadvantaged classes. It was no surprise that economic grievances were manifest in the early slogans of the revolution calling for “bread” and “social justice” alongside political freedom. These catch phrases express a universal demand for economic relief that has been voiced by virtually all of the country’s political forces. Unlike the heated debates and sharp disagreements over what form of governance should guide the post-revolutionary Egypt, consensus regarding the need for economic change geared toward achieving social justice cuts across the diverse political spectrum.

Objectives shared almost universally among political parties, whether liberal or Islamist, include: self-sufficiency of strategic goods and industries (dependency on imported food being among the main criticisms of the previous era); combating corruption and enhancing transparency; boosting small and medium enterprises (SMEs) (in contrast to the previous regime’s bias towards big business); curbing monopolies by promoting competition; “rationalizing” privatization; and expanding welfare benefits and social safety nets.

The Muslim Brotherhood's Freedom and Justice Party (FJP)

Aside from these common objectives, slight variations can be detected between the platforms of the major parties. Although the Muslim Brotherhood has been known as a traditional supporter of free enterprise, its Freedom and Justice Party (FJP) ran in parliamentary elections on a platform very similar to that of the left-leaning Social Democratic Party, co-founder of the major liberal coalition known as Kotla Masreya (The Egyptian Bloc). While confirming the party’s commitment to a market economy, the FJP's program subtly argues that the bad reputation that neoliberal economic policies acquired under Mubarak was caused by corruption rather than inherent flaws in the economic philosophy of neoliberalism. The FJP thus promotes a reformist economic program envisioning a less distorted, more competitive and less corrupt market economy. Even the call for “reviewing” privatization policies is not suggestive of an anti-capitalist backlash or return to socialism, but rather of a more selective approach to neoliberalism that allows the state to retain control over some successful and strategic projects while encouraging private sector entrepreneurs in key industries like pharmaceuticals.

 Areas in which the FJP’s platform suggests a more socialist tilt are basic economic and social rights and tax burden. The FJP has joined the Social Democratic Party in its call for significant redistributive economic measures, e.g. higher tax rates for the wealthy, introducing a capital gains tax, minimum and maximum wage limits –measures that enjoy wide public support.

The Salafi Nour Party

 

The more religiously conservative Salafi Nour Party shares many of the basic principles of the FJP's economic program, especially enhancing philanthropy through Islamic alms (Zakat) and religious endowments (Waqf), but differs in its focus on Islamic banking. The Nour Party aims to fully institutionalize Islamic banking practices while simultaneously phasing out the traditional banking system. In addition to its plans for Islamizing the financial sector, the party's plans for the tourism industry became a matter of much controversy, after a key salafi figure made statements about bans on alcohol and beach tourism, as well as covering up the “idolatrous” sphinx – that might deter Western visitors. Althought the statements were revoked by the party, they were thought to be widely responsible for the party's loss of almost 20 seats in the first phase parliamentary rerun. Opponents of the Salafi agenda fear that these policies might damage Egypt’s vital tourism industry, which accounts for 11 percent of GDP, 40 percent of the country's non-commodity exports and over 19 percent of foreign currency revenues.

 

The Free Egyptians Party

Although Islamists are expected to hold a parliamentary majority, liberal political forces will also be driving the debates on the country’s economic direction. To the far right, the Free Egyptians Party (led by the major telecommunications mogul Naguib Sawiras and a co-founder of the Egyptian Bloc) represents a lonely voice against the chorus calling for an economic agenda based on social justice. The party's program sends a reassuring message to Egypt’s business class, which has been apprehensive of an anti-capitalist backlash against the crony capitalism of the Mubarak era. Unlike other parties that marginalize the former business elite, the Free Egyptians Party aims to preserve their role in the economic realm by resolving court cases involving the allegedly illegal privatization of state enterprises under the former regime.  While other political forces are seeking to close the gap between rich and poor, the Free Egyptian Party claims that social justice can be achieved by enlarging the cake rather than merely redistributing its crumbs. Although the party overwhelmingly supports big business, it does endorse some welfare measures to alleviate poverty and promote economic opportunity for small entrepreneurs, such as micro credit loans, a minimum wage, and a broader social safety net.

At this uncertain moment of political transition, Egypt’s economic orientation seems to be the only issue capable of cutting across the religious-secular fault line that has polarized Egyptian politics. Looking at the economic agendas of the major political parties – particularly the Islamists who are expected to dominate the next parliament – we probably will not see a complete paradigm shift, but nonetheless we can expect a shift toward economic policies featuring a significant emphasis on social policies aimed at providing relief to the masses of disadvantaged Egyptians, whose already fragile position has become even more vulnerable over the past ten months.

Hanaa Ebeid is a senior researcher at Al-Ahram Center for Political and Strategic Studies (ACPSS) focusing on political economy.  Dr. Ebeid is the editor of the ACPSS publication Alternatives and has published on globalization, the politics of aid, external dimensions of democratic transition, and Euro-Mediterranean relations.

Photo Credit: Reuters

 

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