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Imperialist exploitation at the heart of every grievance raised at Tahrir Square

How Wall Street & the Pentagon underdeveloped Egypt, part 2

Published Feb 28, 2011 9:35 PM

The Egyptian people were promised that aligning their country with the U.S. would raise their standard of living.

The U.S. government started pouring money into Egypt after it signed the treaty with Israel in 1979 — at least $40 billion in 30 years. Egypt became the second largest recipient of U.S. aid, right behind Israel. That money, however, was not meant for the Egyptian people.

William Hartung explained on “Democracy Now!” that money from the U.S. government “goes to Egypt, then it comes back for F-16 aircraft, for M1 tanks, for aircraft engines, for all kinds of missiles, for guns, for tear gas canisters. ... Lockheed Martin has been the leader in deals worth $3.8 billion over the period of the last 10 years; General Dynamics, $2.5 billion for tanks; Boeing, $1.7 billion for missiles, for helicopters; Raytheon for all manner of missiles for the armed forces. ...

“[T]his is a key element in propping up the regime,” stressed Hartung. (Jan. 31) He is the author of “Prophets of War: Lockheed Martin and the Making of the Military-Industrial Complex.”

In fiscal 2009, the U.S. spent about $1.5 billion on aid to Egypt, and 86 percent of it was military aid, reports the Congressional Research Services. That most of it went back to U.S. arms manufacturers, Hartung calls “a form of corporate welfare. ... Taxpayers could just as easily be giving it directly to Lockheed Martin or General Dynamics.”

IMF and World Bank underdevelop Egypt

One of the reasons why former Egyptian President Gamal Abdel Nasser made economic gains for Egypt’s poorest in the 1950 and 1960s was that he nationalized the Suez Canal, some multinational corporations and all foreign banks. Former President Hosni Mubarak did just the opposite. He sold off nationalized industries and invited the biggest and most predatory foreign banks to make “structural adjustments” to the Egyptian economy.

In 1991 Egypt signed an agreement with the International Monetary Fund and the World Bank to privatize the public sector. As a result both the standard of living and working conditions in Egypt plunged.

Mubarak’s last government, which took office in 2004, accelerated those neoliberal policies. It cut the top rate of tax from 42 percent to 20 percent, so that multimillionaires paid the same proportion in taxes as workers who made less than $800, explained the Guardian, citing a 2009 report from Egypt’s General Authority for Investment. (Nov. 8, 2009)

Public factories were privatized, and markets were opened to exploitation by foreign companies by decreasing tariffs and import taxes and by introducing subsidies for agribusiness in place of those for small farmers.

Special economic zones were created for foreign companies. Foreign investment increased dramatically — $13 billion in 2008 — but it was in sectors like finance and gas, which create few new jobs. The public sector, where most Egyptians worked, was shrunk, with parts sold to Mubarak’s cronies at discount prices.

“These policies benefitted a small Egyptian elite and foreign corporations, while condemning the country’s working class to a new form of labour-slavery,” reported Al Jazeera on Feb 15. The average private sector employee works 12-hour days and 6-day weeks for just $120 to $400 a month.

“While national resources like natural gas have been sold at subsidized rates to the tycoon owners of iron and fertilizer factories, the cost of ordinary commodities like bread and cooking oil has spiraled,” reported the Guardian.

By following IMF dictates, “Egyptians have got steadily and dramatically poorer: when structural adjustment began 20 percent of the population were living on less than (inflation-adjusted) $2 a day; today, that figure stands at 44 percent,” the Guardian noted.

Poverty, unemployment and inflation increase

Today a tiny rich clique lives in mansions behind high walls, while many urban working-class neighborhoods don’t even have a sewage system. A million poor people live in Cairo’s main cemetery because they cannot afford housing, and 50,000 homeless children live on the streets. (Guardian, Feb.13)

Egypt’s educational system, once the pride of the Arab world, now ranks 106 out of 131 countries. There are no jobs for the college-educated middle class. (New York Times, Feb. 6)

The population of Egypt today is 2.5 times what it was in 1970, but no new land has been cultivated for food in 30 years. To feed its people, many of whom survive mostly on bread, Egypt imports wheat, much of it from the U.S. When Washington has pressured Mubarak, it has held back wheat shipments, precipitating bread rebellions by hungry Egyptians.

What a fall the Egyptian people took when their government surrendered Egypt’s sovereignty and independence to the Pentagon and to U.S. banks and companies! No wonder they have risen up.

U.S. trying to paper over 30 years of exploitation

After 30 years of exploitation, it took a revolution for a U.S. president to suddenly discover that the Egyptian people have rights. Obama’s praise for the demonstrators in Tahrir Square is an attempt to paper over U.S. responsibility for their plight. It reflects Washington’s fear that they might sweep away U.S. dominance of the Middle East.

Vice President Joe Biden gave the U.S. administration’s real position on Jan. 27, before Washington understood the full power of the Egyptian revolt. Biden told PBS, “Mubarak has been an ally of ours in a number of things. And he’s been very responsible on, relative to geopolitical interest in the region, the Middle East peace efforts; the actions Egypt has taken relative to normalizing relationship with Israel. ... I would not refer to [Mubarak] as a dictator.”

Obama’s real position was described later. After Mubarak was deposed, the New York Times explained that Obama really supported keeping Mubarak in office and a long transition process. “But he apparently feared that saying so openly would reveal that the United States was not in total sync with the protesters, and was indeed putting its strategic interests first.” (Feb. 13)

The U.S. government has no permanent allies, only permanent interests. It always puts its strategic interests first. An 11th hour about-face by a U.S. president will not get Washington off the hook. The deed is done. Egypt has been plundered by imperialism, and its relationship as a vassal of U.S. finance capital is at the heart of every grievance raised at Tahrir Square.

After 30 years of humiliation, corruption and poverty, the act of taking to the streets has given the Egyptian people dignity and pride. They are determined to continue and deepen their fight for the release of political prisoners; for lifting the emergency laws; and for a living wage, social services, human rights and many other social and economic reforms. Their expectations are high, and their revolution has just begun.

The line is drawn. The U.S. government, its imperialist allies in Europe, its corrupt Arab clients and Israel stand on one side. On the other are all the struggling peoples of the Middle East.

Which class will learn the lesson of history?

Capitalism and imperialism, which it spawns, are predatory by nature. The U.S. has never accommodated to the independent existence or aspirations of any people. So too, it cannot accommodate to the Egyptian revolution, and will look for every way to derail it and impose a self-serving solution that counters social development. This is the old historic order.

The Egyptian people have taken back their rightful place in history. They now stand with pride on the side of the Lebanese, who twice defeated Israel; the Palestinians, whose struggle never ceases to inspire and who hail the Egyptian Intifada; and the Tunisian people, whose protests showed them what they too could do.

These struggling people represent the new historic order. Their revolution will continue and deepen until the old order is swept away.