‘Pre-democratic’ struggles




The central domestic issue remains the economic reform programme

By Mark Huband in Cairo

Financial Times, 13 May 1997

The language of the open market may have infected the talk of Cairo’s boardrooms and economic ministries, but the political scene is still dominated by a security-centred approach to Islamist politics and a reluctance to allow political opposition to function effectively.

Popular indifference to electoral politics has played into the hands of the ruling National Democratic party, but also helps its enemies.

The NDP’s 417 seats in the 444-seat parliament, its strong influence among labour unions and its landslide victory at local council elections last month, could be viewed as an ideal springboard from which to launch economic reforms. However, a broad swathe of people, not just among the NDP’s declared opponents, see its stranglehold on power as having the long-term potential to benefit its most radical opponents – the Islamists.

“Nobody in Egypt takes any election seriously,” says Mr Hossam Issa, a law professor at Cairo’s Ain Shams University and member of the Nasserite socialist party. “The political parties are so weak, and they are there to give an impression of a false democracy. Meanwhile, the Islamists are in a period of stabilisation and are not weakening,” he says.

The central domestic political issue remains the government’s economic reform programme – introduced with a minimum of consultation – coupled with the consolidation of state control of the labour unions.

Last November, the governing boards of 23 state-sponsored unions remained firmly pro-privatisation, following elections at 2,400 mostly public sector companies. Critics of the privatisation process attribute the government’s success to the prevention of candidates who were opposed to the privatisation of state-owned enterprises from completing their nomination procedures.

So far the public sector has shed 120,000 employees, either through privatisation or pre-sale restructuring.

“I’m not worried about the problem of labour,” says Mr Atef Obeid, the minister for public enterprise. “Labour costs here are within the magnitude of 12 per cent to 14 per cent of turnover. In agriculture, workers have been offered cash payments to establish their own business. Among companies earmarked for privatisation, which are in the red but can be restructured, redundancies will cost E£200m, and among those reckoned to be illiquid, the cost will be E£300m.”

April elections for 47,382 local and municipal council seats saw 22,912 NDP candidates unopposed. The opposition fielded only 8,000 candidates, according to the Egyptian Organisation for Human Rights (EOHR). It assessed turnout at 5 per cent to 20 per cent, reflecting lack of interest among the 11m eligible voters.

Some believe this apathy reflects the general view that as parliament is the main political forum open to the opposition, local councils are not important. The Islamists take a different view. They argued before the elections that the arrest on the eve of the election of 27 alleged members or sympathisers of the outlawed Muslim Brotherhood showed how important the contest was to the government.

The apparent end of attacks by Islamists on tourists has tended to give the impression that the Islamic groups no longer play a part in Egyptian politics. With an estimated 17,000 political detainees in prisons, according to the EOHR, much of the Islamist’s organisational ability has been undermined.

“We have opposition. The opposition is financing violence. So they don’t constitute opposition,” says Gen Hassan Al-Alfi, the interior minister. “They are committing crimes. How can they be considered opposition when they are hiding behind the curtain of Islam? If we once approved the Muslim Brotherhood, we would have violence by them to get power.”

The retention of political power by much the same people who have always enjoyed it – when economic reforms have done little to distribute wealth but are threatening redundancies – has prepared the ground for increasing radicalism.

The reaction of farmers will be the next big social test for the government’s economic reforms, after privatisation-related redundancy.  This will come later this year, with the repeal of laws which freeze land rents and allow tenants on smallholdings to pass the land to their children at fixed rents.

Even government politicians acknowledge that the only debate taking place is within the NDP – although such debate is often extremely vigorous.

“Egypt is in a pre-democratic phase,” says one senior government minister.. “But the economic discourse does infect the political discourse. There are factors in the system that will lead to political change. Not least the fact that economic success is no longer dependant on access to political power,” he says.

As social strains intensify the government will be looking for support from those who have enjoyed the fruits of the soaring stock market. But even that support is far from certain.

Central to the political concerns of the financial community is the influence of company owners whose fortunes derive from the monopolistic practices of the past. Many of them are finding that the political patronage they relied on for much of their success is under an increasingly critical spotlight.

“Egypt isn’t a democracy. There’s the army and the bureaucracy,” says one leading banker. “The government is basically the economic power. The bureaucracy feeds and clothes the largest single sector of the economy. The economic reform programme doesn’t lie in a conviction for reform, as not a single one of the bureaucrats has an iota of conviction on one position or another.”

For many business people economic reform remains highly vulnerable to the real power, which lies in the hands of those controlling a largely unreconstructed political arena.

“Even in a successful business you don’t have rights,” says the director of a family-owned Cairo company. “You have people taking other peoples’ property, and the owners can’t do anything about it. You can own a piece of land in the desert, and one day you find it’s not your’s any more. We don’t like to say what we have and what we haven’t got for fear of somebody taking it from us. This is the third world, not Europe. Only the businessmen with political influence are not scared.”

Other leading business people view the economic reform programme as simply a reflection of the political knife-edge on which Egypt’s leaders have walked.

“It’s all driven by the political expediency of the ruler. [President] Mubarak has to keep his foreign protector – the United States – happy. He must also show a great deal of sensitivity to public opinion, which is anti-Israel,” says an influential Cairo financier. “Mubarak can’t voice that feeling without offending the Americans. But he can’t continue to wallpaper over the situation.”

© Financial Times