The White Elephant Daily

Port Militarization Resistance; Tacoma WA.

2007-03-15T21:52:00.000+03:00

On March 5th, 2007 at the Port of Tacoma in Washington State, the latest mobilization of citizens to end the war in Iraq began with the arrest of three activists. During the arrest at least one activist was tazerd by police three times while pinning him on the ground. In an account on Democracy Now (March 9, 2007) Navy veteran Wally Cudderford explained he was first pinned to the ground with his arms underneath his body by four police officers. While not being able to move, officers demanded he put his hands behind his back. He was then tazerd three times before being handcuffed and taken to the local jail with charges of third degree assault. The charge was shared by the two other activists arrested that evening, Caitlin Esworthy and Jeff Berryhill. The state prosecutor dropped the charges next day.
The protest has continued for nine days thus far. Police departments involved have carried out multiple arrests and detentions. A total of 29 people, including Olympia City Council member TJ Johnson have been arrested. There are no accurate reports on the amount of unofficial detentions, however one student who was handcuffed and held by police for refusing to turn off his video camera has made significant headlines. The student has posted a video if the incident. http://www.youtube.com/watch?v=DMDW4Fszj2U&mode=related&search=
Beyond arrests Police forces have also used a multitude of “non-lethal” weapons including; tear gas, rubber bullets, pepper bullets (‘pepper balls’), tazers, concussion grenades, pepper spray, and batons. Over the weekend dozens of videos of the protest have been posted on You Tube and in blogs across the Internet. None of the video footage published thus far has shown conflict instigated by protestors. To the contrary the actions of Police have seemed to erupt wholly unprovoked, such as during an early morning protest were activists where attacked by at least 150 police officers in full riot gear. In one instance when Police charged that protestors had thrown barricades at police, prompting multiple volleys of tear gas, concussion grenades, and rubber bullets from the police lines, subsequent published video refutes the police’s claim. No such action can be seen anywhere in the vicinity of the protest. In an interview aired on North West Cable News (NWCN) Detective Brad Graham of the Tacoma Police Department pointed to the area where he claims the barricades were this incident happened. http://www.youtube.com/watch?v=PzEjstUpxoQ&mode=related&search=
However independent footage taken during the protest clearly covers the area the detective indicates during his interview, and no such action by the protestors can be seen taking place. http://www.youtube.com/watch?v=z-w7g_8ZCYU

This protest mirrors another organized by the Port Militarization Resistance (PMR) in March of 2006 at the Port of Olympia, in Olympia WA. Hundreds of activists took part in a fluctuating week and a half long protest that succeeded in halting all military shipments through the Port of Olympia, explaining why the military is now shipping through a less accessible Port of Tacoma. The predominantly peaceful action taken by activists was responded to with the same malicious physical violence, imprisonment and public lies. Much the same as the three first arrested at the Port of Tacoma action, many of those arrested in 2006 were first charged with serious - in many cases - felony crimes, which had no legal basis and were subsequently dropped by the state prosecutor. Police then as now, lied to media institutions when questioned about the excessive use of unprovoked force on peaceful demonstrators.

The PMR and other groups across the nation are beginning to take part in actions of direct intervention (direct action) to bring a stop to the senseless imperial war that is now waging in Iraq. Our politicians have not held themselves accountable to the will of the United States citizenry. According to recent polls two thirds of all Americans do not approve of the “surge” and want a firm timetable for the immediate withdrawal of US combat forces from Iraq. The new Democrat controlled Congress has thus far only succeeded with proposing legislation that would continue to fund the war, while giving no dead line for pullout. We therefore must find creative solutions to peaceful and progressive change in our society.
Events like this need press. The mainstream media often misses the point and fail to adequately investigate the real issues behind a story. We need to spread the message through word of mouth, and alternative means of media to more effectively reach and educate the public about what is going on why these actions are taking place and what they can do to help.
I have listed some links below relating to this story. If you feel so inclined click on some of the links, or do some of your own research on what is happening. Spread the word about the movement and its goals, or if you want to get involved start to network and contact people within the movement, and work to organize activists in your area. This is the most important aspect of the movement. It must grow if we are to move from symbolic action to more effective and broadly organized action. It is imperative that this movement and others that seek to end imperial ambition and the horrific, unnecessary loss of human life.

This is a very straightforward news piece on the protest and gives contact information for many of the organizers at the bottom.
http://www.zmag.org/content/showarticle.cfm?SectionID=51&ItemID=12318

You can also check out www.theolympian.com and www.seattlepi.com for coverage.

www.omjp.org is an umbrella group operating out of Olympia WA. The PMR is associated with them, and their site has good resources and information of the actions.

There are many videos posted on www.YOUTUBE.com relating to the protest. Just search “Tacoma Port Protest.”
-One of the most disturbing videos is from a few minuets before police started to use tear gas and rubber bullets in the video posted above. The video shows police advancing on protestors shoving them with batons and shields. One or more of the officers then begins firing rubber bullets point blank into the crown. At least one protestor is seen being directly hit by multiple shots, including one to the head. Another woman is seen being forced to the ground by police batons, then as they slowly back away another officer sprays the women who is not moving, curled up on the ground, with mace.
http://www.youtube.com/watch?v=q1_lmvhkv3c

The IMF and socio-political change in Egypt

2007-01-17T22:37:00.000+03:00

Since the instigation of IMF-Egyptian negotiations fundamental socio-political policies pursued by the Egyptian government and the structure of the Egyptian economy have undergone a fundamental change. In the twenty years of negotiations Western strong-arm policies and recently compliant Egyptian government policies, have seen a consistent trend away from the populism brought in by Nasser era politics. The economics of Egypt now consistently favor a corporatist-Beurocratic elite, and has eroded the standard of social equity pursued by the revolutionary coup of 1952. Poverty in Egypt has increased, money is continually concentrating to an elite percentage of the population, and institutionalized corruption is rife.
Accompanying this has been a retrograde in the political liberties of the Egyptian populace. Because economic policies have shifted the Government’s support base to a small elite the government has moved to stifle the civil unrest that has naturally stemmed from such policies. This may have a short-term effect of quelling oppositional movements, but history tells us that the long-term effect is only the empowerment of such oppositional groups. To this point the largest opposition group, and now the most widely supported group in Egypt, is the Muslim Brotherhood. Because of government policies that continually neglect the poor and working classes in Egypt (the poor represent over 20% of the population), and the outright neglect for the right to political opposition, the Egyptian government has alienated itself from the majority of the Egyptian society, while emboldening its adversaries.
What this means is that the groundwork for an unstable state in Egypt has begun to be laid. Elitist concentrated, unsustainable economic policy, coupled with an abandonment and polarization of the majority Egyptian population, means that the government will have an increasingly difficult time subduing the public as it becomes galvanized by increasingly deteriorating standards of personal liberties and economic opportunities. When the security state fails, the situation begs the question; whom will it benefit?
In this paper I will begin with a historical analysis of the Egyptian-Internationalist Institution relation and then through three subsequent sections explain how it has effected current Egyptian Socio-Economics. The first section will look at the structural outcomes of the Egyptian-IMF relationship, looking specifically at debt servicing and how this has affected policy. The second section will analize the socio-political effects of the such structural policy, while the third will focus on hypothesized outcomes based on the social and economic paradox created by the Egyptian relation with Internationalist Institutions

IMF-Egypt Relations
Talks between Egypt and the IMF first began in April-May 1985, and resulted in a 1987 Standby Agreement. This was the first, of what is a continuing IMF-Egypt relationship. The move by the Egyptian government to seek financial aid from the IMF was the result of a recession in its economy that began in the mid-eighties and its subsequent inability to finance accumulated foreign debt. The Egyptian economy had been statetist-led since the revolutionary coup of Gamel Abdel-Nasser in 1952. Because of Nasser’s – and subsequent leader’s - populism the Egyptian government pursued import substitution and extensive government subsidies as the backbone of its economic policy. These short-term negative growth policies were offset by repatriated capital, petroleum exports (particularly in the 70’s), as well as US and/or USSR foreign aid - dependent on the time frame one chooses. However, these policies proved to be insufficient to sustaining Egypt economically. Overvaluation of the Egyptian pound – based on a pegging system – adversely affected the agricultural sector, causing a reduction in the amount of land delegated to cotton and wheat production, which Egypt enjoyed a comparative advantage in at the time (Momani pg.11). The government also encouraged consumption, which had had the affect of raising the number of imported goods, and also diverted capital away from industry –both agricultural and industrial – that would sustainably support domestic consumption, opting to invest in capital-intensive industry, such as petroleum. These policies overall led to a large trade deficit and falling terms of trade for all of Egypt’s export industries sans petroleum. Once coupled with a recession Egypt began to be unable to finance its foreign debt or control its economic fall. This led it into negotiations with the IMF, and the all to common story of forced “liberalization” and the disastrous consequences that accompany it.
Through out this relationship the IMF has unrelentingly pressured the Egyptian government to liberalize its economy. The areas most focused on by the IMF in the case of Egypt are the ending of government owned banks and production facilities, lowering of protective tariffs, ending of all government subsidies, and the devaluation of the Egyptian pound. As proposed by IMF staff, these policies would be implemented quickly: immediately raising electrical prices by at least 60%, the full liberalization of Egypt’s, then, government owned banks, and an immediate move to unifying Egypt’s exchange rate system, among others. (Momani pg. 15) However throughout the relationship, or at least until the late nineties, the Egyptian government consistently acted to side step, and in other cases outright ignored, IMF conditions. Instead of implementing in full the staff recommendations, the Egyptian government would do just enough to secure aid, or the release of IMF funds, and then refuse to implement further reform, often citing public discontent as the impetus for its decision.
However an indication on the amount of pressure the Executive Council (EC) was willing to place on Egypt for compliance came quickly. In 1988 when new rounds of talks were initiated, after the 1987 Stand By Agreement was cancelled by the EC and after Egypt drew half the $342 million from the IMF, yet failed to implement any of the reforms requested. This time there would be more at stake for the Egyptian government than IMF funds. Because of the deadlock in negotiations with the IMF, Egypt’s status with other international creditors was affected. The result was the suspension of World Bank and USAID loans for the building of new electricity plants, and a request by Egypt to the African Development Bank for US $270 million to fund another electricity plant was denied. In a report to Congress USAID stated that it was their policy to withhold funds from Egypt until it raised energy prices – the most intensely contested issue between IMF and Egyptian negotiators at the time. (Momani pg. 27)
Negotiations continued to stall over “the need for privatization” of government owned industries – in particular the banking industry - food subsidy, and energy subsidies. As the deadlock persisted the US government decided to withhold $230 million in additional aid until the Egyptian government implemented economic reforms under the guidance of the IMF. Then US Deputy Assistant Secretary of State, Edward Walker, in a presentation to congresses, explained the US government would “use [its] assistance program to creatively encourage both macroeconomic and sector reforms” (US Congress, 1989). This strategy was further strengthened by the passing of the US Brooke Agreement, which required all aid recipients who have accumulated outstanding debt to pay the minimum interest payment or face suspension of further US aid distributions. This amendment alone would have potentially cost Egypt US $2 billion per year (Momani, pg.29). Egypt’s debt issues compounded in a number of ways, including its inability to pay or get credit for its necessary wheat imports in October and November 1989, creating tensions among the populace creating fears of the possibility of another infamous bread riot like that of 1977 . These economic and welfare factors greatly increased the leverage of IMF demands over Egypt, and would become hallmarks of the IMF strategy for Egyptian compliance throughout their relationship.
With the onset of the Gulf War (1990) however Egypt’s importance as a United States regional ally represented an opportunity for the Egyptian government. By committing troops to the intervention against Saddam Hussein, Egypt was able to lend legitimacy to the US led action and convince some other essential Arab governments to join the coalition. Egypt’s position as the most substantial Arab military power in the region also guaranteed that no other regional actor would intervene on behalf of Iraq.
The Egyptian government understood this importance and took the opportunity to lobby the United States to lend support on its behalf in the stalled IMF negotiations. A US embassy report confirms this;

[T]he Egyptian’s observed that the Gulf crises has focused attention on Egypt’s stabilizing influence in the region. The time is right, therefore, for a meeting of the G5 or G7 nations to commit in advance to the resources needed to meet the finance gap…According to [a Egyptian government representative], IMF Managing Director Camdessus told them in their last meeting that he could not agree to a stand-by based on the Egyptian economic reform plan until the creditor nations would agree to meet the finance gap. (US Embassy 1990)

The same document also reported that the embassy did not believe Egyptian Government reforms themselves would ensure an IMF agreement. Therefore the embassy supported the notion, after the Egyptian government asked it to, that the US should help mediate an agreement.

The Egyptians…want us to urge the IMF to bend to their estimate of the possible and conclude an agreement rapidly. Both as a signal to the IMF and because they are desperately strapped for cash to meet debt and food purchase payments. (US Embassy 1990)

The Egyptian government stressed that economic losses related to the Gulf crisis would make it impossible for it to comply with the currently requested IMF stipulations. The embassy mirrored this view, and in acknowledgment of Egypt’s geo-political importance, and its government’s inviability if agreements with the IMF were not met, wholly supported all possible moves to secure Egypt with a new, more favorable, IMF agreement. Following this assessment, in October the Bush senior administration resolved Egypt of it’s military debt – a total amounting to US $6.998 Billion – and pursued other international lenders, specifically Paris Club members, to do the same.
The actions of the US government and its application of pressure on the IMF and other international lenders allowed for the new IMF-Egyptian agreement. The debt relief substantially improved Egypt’s economy, and - albeit continuing low foreign investment – created a positive current account and a surge of international capital. The above scenario however would not replay itself.
In 1993 Egypt would again send a letter of intent to the IMF in an attempt to secure yet another agreement. Egypt, however, had no intention of drawing on the funds provided for by the agreement, but rather was seeking one as a means to secure another $4 billion in Paris Club debt relief, which hinged on the satisfaction of such an agreement. The Egyptian government therefore was not looking for a particularly strong agreement, and in its letter addressed only nominal reform issues. The IMF staff understood the leverage it now possessed however, and pushed many contentious issues that were not addressed in the 1991 Stand-by Agreement, specifically stating; “prior to any successor agreement, sustained performance under the present arrangement, as well as a strong initial package including both financial policies and comprehensive structural actions, would be required.” (Momani pg. 52)
Under the threat of losing debt forgiveness the Egyptian government conceded and wrote a detailed letter of intent including 20 prior commitments – demanded by the IMF – that, as necessity, would be fulfilled before the commencement of any new agreement. The commitments included were an increase in electricity prices, elimination of a majority of import bans, and the creation of a Value Added Tax (VAT) system (Momani pg. 53). Egypt once again, for reasons outside its own desires or best interests, capitulated to a new IMF agreement to attain needed international aid.
This process was to become systematic of IMF-Egyptian relations throughout the 1990s. It was not through a genuine desire for economic reform that Egypt agreed to most IMF demands, but to attain positive IMF staff reviews - as a means to secure favorable credit status -, and secure outside strategic goals that were not interrelated, but hinged on the success of an IMF-Egyptian agreement. Consistently after accepting the terms of IMF agreements, the Egyptian government drug its feet on implementing the requested reforms, and in many instances outright ignored them (Momani pg. 55-56). Domestically Egypt was insistent in claiming that socio-economic factors would not allow it to implement many of the reforms - citing the historical occurrence of riots when essential food subsidies were removed, for example. There also was the constant debate about reform timing. The IMF staff doggedly insisted that reforms had to be sudden and implemented without hesitation – much like the “shock therapy” given to Eastern European countries – to avoid compounding problems by letting them play out into the future. While the Egyptian authorities consistently looked to slow the process of the reforms so as not to invoke the fury of the masses, or experience the horrific effects felt by other countries’ headless, immediate, attempt at liberalization. However by the late nineties, and into the present century, the Egyptian government has been in full compliance and now, on its own, is pursuing economic liberalization at a tact unprecedented since its years as a British protectorate. Economic reform of this magnitude however will have a profound effect on the socio-politics of a nation, and have profound change on a society. Egypt being no exception.

Socio-Political Change

Since the revolutionary coup of 1952 the Egyptian government has been a populist supported mechanism. However, a slow process that begun with the infitah, and matured under Mubarak in the last two decades, has taken place in Egypt. Through economic policy, and which social strata it favors, the essential network of support for the state apparatus naturally gravitates toward those who reap the benefits of government policy. There is abundant literature on whom a liberalized economy benefits, therefore I need not explain it at length it here. Suffice to say in a liberalized system capital, and the worldly benefits it reaps, gravitates from the majority populace (workers, blue/white collar employees) too a small minority (Capitalists, in rare circumstances upwardly mobile middle class entrepreneurs). The case is the same in Egypt, and when one throws in a previously state controlled economy, the creation of a political-economic elite with majority access to power and capital becomes a significant problem.
What happened, acutely in the last two decades was first, a shift in economic policy. Nasser claimed the creation of Arab Socialism, and the policies of a welfare state were hallmarks of his rule. Slowly however economic and domestic social policy changed. Guaranteed employment, access to education, free health care, controlled rent, subsidies, state controlled economic institutions, all began to give way. Privatization of state institutions meant banks, factories etc, moved ostensible from the social realm to the private. A semi-egalitarian ideology is replaced with the mantra of growth, and profit becomes the new denomination through which human progress is measured. As this transformation transpires, the state’s laws and enforcement benefit a different sub-sect of society. This group, which could have been alienated before, is then more receptive to government as its social power increases and government alienates the contrasting social-strata. The new patrioned class therefore acts as a counter weight, as opposition wanes from one group to the other.
This shift in Egyptian socio-politics has proven thus far to be detrimental to the majority of the Egyptian populace. Essential subsidies have been cut, poverty and unemployment are still rampant, and government corruption that caters to the new economic-power elite is rife. All these factors combined have not only negatively effected, but have also alienated the majority population of Egypt. As will be elaborated below this has created an unstable and long-term unsustainable economic and political situation in Egypt.

The Newly Disenfranchised

As assessed by Jon B. Alterman, Egypt is politically “moribund”. The government has moved to structure its power base around a corporatist-security-political elite that has abandoned any populist leanings. This has created a multitude of powerful new political realities. Most important to our assessment here being the shift to a non-populist power base, which has allowed the Egyptian government to implement economic reform, and one that specifically trends upward – meaning the benefits go toward those with economic-and government advantage, while the detriment falls on those disadvantaged in this field. The trend of “de-liberalizing” the socio-politics of the country means that the political legitimacy of Mubarak’s government is now principally dependent upon appeasing an interrelated economic-government beaurocratic elite.
The continued appeasement of these classes is also dependent on the goodwill of international political factors, in particular the IMF, USAID and Paris Club, and the placation of these institutions means continually financing foreign debt and keeping with
economic liberalization policies as prescribed by the IMF. As was shown in June 1994 , the ability of Egypt to attain debt relief from international lenders has rested squarely – after the 1991 negotiations - upon positive IMF reviews of Egypt’s economy and its policies. Without the debt relief by these entities the Egyptian government would find itself in a quandary over its external debt, see less international investment because of this, and would not be able to finance this debt while giving handouts to its new found political support base.
Financing its external debt first has served two purposes to this point. First, maintaining positive reviews by the IMF thus allowing continued debt relief and international assistance with its economy, and avoiding suspension of USAID under the US Brooke Agreement. While secondly, because the government has chosen to finance this debt principally through the selling of T-Bills, it has allowed the hardships of financing such a debt to fall upon those that do not make up Mubarak’s political support base. The policies used thus far however are unsustainable in the long run, both financially and socio-politically.
Typically, the selling of T-Bills can be an effective way of raising much needed government funds particularly in the case of an indebted “developing country,” helping the government attain foreign currency reserves that can be used to repay loans. The Egyptian government, however, has not had the available funds to finance this process and thus has resorted to procuring loans from the National Investment Bank (NIB) to raise the capital that is then sold. The problem lies in the interest rates that the loans are procured and the T-Bills sold for. To use US stock market terms, the Egyptian government is borrowing long and lending short. The government has been taking loans from the NIB at high interest rates relative to the high interest rates it is offering on T-Bills. The high interest rates on T-Bills are an incentive to attract investors, but the interest rate inevitably makes the use of T-Bills to finance debt a long-term problem since the interest rate makes them unprofitable for the government in the long term. Though, by selling T-Bills in the short-term, the government is able to raise instant capital to finance repayment of its external debt, it at the same time is incurring a public debt because of the interest and principle owed to NIB and T-Bill holders. This sort of monetary financing creates obvious sustainability problems, as the Egyptian government is essentially trading its foreign debt for a domestic debt. In Egypt this sort of debt raises significant problems because it does two things: First is redistributes capital from Egyptians to foreigners, and secondly from the poor to the rich.
Money is moved from Egyptians to foreigners primarily through the issuance of T-Bills. There have been multiple instances of large capital inflows; the example here will be from one such inflow in 1996-98. During this influx it is estimated that the inflows averaged $2 billion per year, or 4.5% of Egyptian GDP. The direct fiscal cost of the inflows, because of sterilization, is estimated at LE 0.1 billion, or 1.4% or GDP, for those two years. The direct cost based on the issuance of T-Bills, and the fact that almost all T-Bills issued were bought by international institutional investors, means that a significant amount of capital was taken from the Egyptian economy and redistributed to international markets, thus money was moved from Egyptians to foreigners. This subsequently constricts the capital market in Egypt, raising domestic prices on goods and restricting state monetary control. This accounts for the primary short-term problem in incurring public debt.
Karima Korayem shows poignantly the long-term problems – in relation to the Egyptian populace – of domestic debt being a consistent debt to NOIP and GASI (Korayem, 2000). Capital has been drawn by the National Investment Bank (NIB) , from NOIP and GASI funds, primarily through an implicit tax system. Throughout the 1990s the implicit tax rate imposed on these pensioners funds exceeded 100% the interest guaranteed to the funds by their NIB investments, meaning; NOIP and GASI actually owe, through the implicit tax, more than what its investments are earning each year. This obviously impairs the ability for these funds to provide for pensioners in old age, which is the purpose of such institutions. The monies taken, however, are rationalized by the government through NIB utilization of the capital. The funds drawn from the implicit tax accounts for roughly 58% of NIB resources, which are used to finance long-term investment projects. By priority of funds, these invest are: Housing and new urban communities, transport and communication, electricity and energy and education. With the investments in primary infrastructure one can construe that the benefits are general, however it is obvious that such programs benefit those with greater access to capital more than others, and in the case of transportation and communication, electricity and energy, and housing and urban development, they cater to the demand of the rich more than the broad public. The uneven appropriation of funds from poor to rich can be further magnified when one looks at the soft financing by the NIB. These projects include low-cost housing, cattle feeding, export projects, emergency housing, and industrial park development, and only the low-cost housing can be seen as directly benefiting the poor more signifigantly than other social strata. Compared with the amount of investment allocated to the former mentioned projects, the latter receive a scant LE350 Million, accounting on the average for only 4.4% of NIB resources. The percentage of investment in these projects has also shown a steady decline throughout the 90s and the early half of the twenty-first century.
The implicit tax levied against NOIP and GASI then has two major negative components. The first being the amount of capital NOIP and GASI owe over the interest received from the NIB has created a draining effect on both funds, inevitably then hurting its pensioners, i.e. the poor. The second being the monies siphoned from both institutions is re-allocated into long-term investment plans that heavily favor the rich over the poor. It can be said then that this monetary arrangement acts as a back door tax, one the explicitly moves capital from the poor and reallocates it to the rich.

The Structure of Debt and its Purposes

As was shown above, the use of T-Bills as a means of short financing of foreign debt was chosen by the government to placate international monetary institutions and guarantee continued, and essential, debt relief. This policy has accounted for the largest percentage of Egyptian public debt. While the debt owed because of the implicit tax levied against NOIP and GASI makes up the second part of public debt, it is obviously a means of financing development projects that have a disproportionate positive effect on the rich, and also serves to stimulate short term growth, helping Egypt keep a presentable façade of positive economic performance, that will in turn embolden international investment and the positive assessments from the IMF staff. Both policies help Egypt in procuring debt relief and positive economic reviews, and the latter works to keep support among Mubarak’s only political buttress. None of these then work to address the needs of the poor, which is the majority population of Egypt, and when coupled with the IMF imposed policies of essential subsidies removal, and the political alienation of any conceivable public ‘pressure valve,’ you have the makings of an unstable socio-economic state.
The external debt financing chosen by the Egyptian government is not a long-term sustainable policy. With negotiations continuing between the IMF and Egypt to this day, its is obvious that Egypt will continue to incur a foreign debt for years to come, However its policy of running a domestic debt to finance this debt will not be able to continue indefinitely. Current public debt financing accounts for over one quarter of government expenditure, thus negatively affecting all other forms of government’s expenditure as it grows, particularly infrastructure and essential food subsidies. Besides a reduction in the amount of capital available for public financing, public debt has the effect of slowing growth in a country and restricting the money supply causing lower investment and business confidence. These economic policies effects have thus far acted as a smoke screen to underlying issues of mismanagement and financial instability. Smokescreens, however, have the detrimental ability to go the way of the wind, and inevitable dissolve leaving their intended subject naked to the realities it wished to hide.

Socio-Politics

The second issue addressed thus far is more theoretical, but history here acts as our informed guide. Beginning in the late nineties the Egyptian government had forsaken (for the first time since Nasser) all attempts at populism, and rather found its support entrenched with a business-beurocratic elite. It can be argued that this was the inevitable outcome of years of painstaking economic liberalization policies. Since the first talks with the IMF, the Egyptian government argued consistently against all proposed liberalization policies on the principal of the will of the masses to mobilize against such actions. However, by 1997 the Egyptian government was pursuing full liberalization reform. Economic liberalization historically, and mathematically, benefits those with greater access to capital, specifically in the short term. It can be hypothesized then that the Egyptian governments political ability to pursue economic liberalization, therefore placating the aforementioned international monetary institutions, was based in the transformation of its support base from those who liberalization hurts, to those it benefits. However, as Alterman argues, this sort of political and economic alienation, with a clear lack of outlets for public discontent, leads to a very unstable autocratic government, which lacks the political will and ability to respond to the public’s demands when they become galvanized into action (Alterman 2000).
These two primary economic and socio-political factors stem from the twin root of international monetary and political policy. To save its government Mubarak had to make the overture to the IMF in the latter half of the 1980s. It was essential to secure future funds, and current debt relief, that without, it could not continue to support itself as a state. The need for continued support from these international institutions is what led the slow transformation from one political base to another. The demand of liberalization has been the primary catalyst in the economic and socio-political transformation that has occurred in the past two decades. However a move to liberalization is no assurance of “success.” As has been shown, the course Egypt has taken, and is currently navigating, is both economically and politically unstable, and have thus far only acted to support an inefficient state past its natural existence. Sooner than later the contradictions of its economic policies and the political realities of governorship will have to be rectified, in the halls of the IMF and the streets of Egypt.

This conclusion therefore begs the question; can the current regime alleviate itself from the interrelated economic and social paradoxes created by its continued relations with these international monetary institutions?
In short, no. The most sound economic and social action the government could take in the short term is to stop financing its foreign debt through t-bills, and instead implement a progressive tax that could cover the fiscal cost of continued financing. This however is incredibly unlikely, and in the governments current position the loss of its last bastion of support could destabilize the government enough to force it to significant reform and the loss of its current position of power. Any attempted solution to the current economic crisis would also have to include a halt to the corrupt inherent tax levied against NOIP and GASI funds, and the reintroduction of monetary controls on the Egyptian LE. Both are essential for creating support among the currently alienated classes of the society, and improving the general welfare of those in the Egyptian state. The cessation of the inherent tax would allow NOIP and GASI funds to accomplish their specified purpose, a failure to do so in the near future is going to present a significant crisis to the government as hundreds of thousands of workers find themselves without their promised pension. Re-introducing control over the value of the Egyptian LE would have significant short-term effects for the populace, in particular the poor. Because Egypt is principally an importer, specifically on food stuffs – in particular wheat used for making subsidized bread – the re-introduction of monetary controls would stabilize the essential consumption market in a nominal way, and would allow the Egyptian government to better implement and target subsidies to those in most need by creating a more predictable and controllable market. Monetary controls would also increase the ability of the general Egyptian populace to purchase essential goods, thus addressing some very prolific health issues such as malnutrition, and would also help in the financing of foreign debt by helping support the switch from foreign to domestic capital inflows.
These first steps however are nearly impossible for the Egyptian government to take because of ongoing IMF relations, and the government’s relation to the capitalist-beaurocratic elite that currently supports it. The government would have a difficult time implementing a progressive taxing system given the obvious negative reception it would have among its support base, non-the less its own most powerful officials. As mentioned before the loss of support among its last class of supporters could lead to a quickening demise of the regime. The halt to the misuse of NOIP and GASI funds is possible, however the effects it could have on the façade of growth and further appeasement of the middle and upper classes could be significant considering the funds provided for by the inherent tax accounts for more than half of available NIB funds for reinvestment as elaborated on above. The re-introduction of monetary controls would be the most difficult of the proposals. The IMF, USAID, Paris Club etc. have been vehemently opposed to any sort of monetary control since the beginning of the IMF-Egyptian relationship in 1987. A re-introduction of such controls would be seen as a direct assault on the internationalist’s hegemony, and would no doubt bring the incumbent wrath of such a perceived affront, which we can understand from above to be wholly un-weatherable for the Egyptian government.
Sadly the outcomes predicted above leave little hope for the improvement of the mass of Egyptian citizens lives under the current government. The promise of the only viable political opposition at this time however does not offer much more.
The Muslim Brotherhood (MB) currently enjoys the undoubted support from the majority of the Egyptian population. Multiple factors including increased conservatism and support for religious rule because of repatriated workers from the conservative gulf states and years of poor secular rule – respectively, and the fact that the only group thus far able to garner the twin pillars of personal and monetary support has been The Brothers, has led to this current reality. However the MB has two distinct disadvantages when it comes to a legitimate and lasting stake at power in the country.
To come to power The Brothers would have too galvanize its support base into collective action. Egypt is a police state, it has been under virtual martial law since the assassination of Sadat, and until the public is able to express a will that is collective and organized, the power of their independent actions means nothing against a state that has one of the most complex suppression apparatuses in the region. The MB is missing a key sector of the Egyptian society however. Traditionally industrialized workers have served as a backbone to any successful attempt at a non-coup style overthrow. However the MB have historically and consistently alienated themselves from organized workers movements, and has failed, outside of less than modest attempts, to organize workers in Brotherhood supported organizations. (Benin & Lockman) Support and cooperation from these groups is a necessity if The Brothers wish to put forward a viable opposition to the government.
The second obstacle is not one so easy to overcome, and an analogy between the Brothers and the current government can be discerned. As Diaa Rashwan bluntly puts it, “[The Brotherhood] doesn’t have any kind of reason to be against the actual economic structure in Egypt.” (Richter, 2006) In an article in Al-Watan Al-Araby, Mahmoud Sadiq surmises that the Brotherhood is the richest group in Egypt. Estimates of the Brotherhood’s fund range from US $150 million all the way to $3 Billion when including current holdings and investments. The Brotherhood accumulates revenues from three main sources; business activities undertaken by its members that produce returns for the organization, zakat (8% of yearly income) paid by all members, and extra donations by wealthy business patrons. The first and last of the three are of main concern here.
The industries the MB is most involved in include real estate, construction and building materials, textiles, and IT. These industries are mentioned above as receiving the greatest benefit from NIB patronage [recall the inherent tax], as well as the greatest share of the benefit from liberalization policies. To put it flatly, the most influential members of the society – based on economic contribution – and the majority investments of the organization in general, are entrenched among the some corporatist elite that currently supports government economic policy. This brings new problems to light about the ability for the current regime to implement meaningful reform as mentioned above, but also gives one direct insight into what the prospects of a MB controlled Egypt would manifest. Therefore even if the MB could garner enough support for a populist movement in Egypt, the long term effects on the well being of the average Egyptian citizen would likely not improve. The MB has not put forward any sort of comprehensive economic plan in its political campaigns, because it has no reason to do so given the support it currently receives from it.

Conclusion

The problems and paradox created by the current Egyptian-IMF relationship are ones not easily cured, and in a situation where the contemporary power and the only viable opposition force have not interest or ability to deal with these contradictions, the future assessment of the Egyptian state is grim. For Egypt to continually secure much needed debt relief, continued economic and military aid, and for both major groups in Egypt to keep support among their own influential elite, a continued relationship with the IMF, and a continuation of the current unsustainable economic practices is necessary. The problem of the domestic constituents is compounded by a single minded IMF staff whose economic analysis has consistently created such internal contradictions and led many countries into economic disaster. Sadly Egypt appears to be no different.
Because of Egypt’s strategic “regional importance” solely as a military power to the United States, the continuation of military and international aid and unsubstantiated support for blatant poor economic policy will continue. Regrettably the $1.3 Billion a year in US military aid is used in large part to reinforce the state military apparatus in Egypt. It is estimated that the US embassy currently keeps 35 US military advisors who train Egyptian forces in the use of weapons supplied by the United States, some of which include weapons whose only purpose can be popular suppression – ex. Police riot gear and tear gas, on staff (Independent Source). This sort of support will only prolong and worsen the possible outcomes of unavoidable eventual change. The way that this future change will happen, and its end composition, will depend greatly on the ensuing years and the type of policies that are carried out by the Egyptian government and its international backers. If measures are not taken, by both the Egyptian Government, and its interested international partners, to curb poor economic of socio-political policy the situation for a majority of Egyptians will drastically deteriorate. The viability of the Egyptian state is at stake, and the lives of millions of Egyptian with it.

1 This term will refer to the most influencial [in the case of Egypt] international institutions that effect the internal politics of the Egyptian state. Those include; IMF, USAID, World Bank, Paris Club. These four institutions, though independent, consistently share the same goals and use interlaced methods of political, economic, and at times militaristic, pressure to pursue their goals.
2 An example of such an action can be seen when in the summer of 1985 the Egyptian government changed its energy and water policy by increasing water tariff rates by 50%. This was done to secure a $500 million cash transfer from the US government. Afterward the government refused to implement further reform, in particular to subsidized gas, and cooking oils. (Momani pg.11)
3 The political controlling board of the IMF, separate from the ‘staff,’ which makes economic reviews and recommendations. The board is chaired by representatives of IMF member countries and has the final say in all matters of the IMF.
4 In 1977 then President Anwar Sadat attempted, under the ideology of the infitah, to increase the price of bread in Egypt. This sparked riots in Cairo unheard of, in size and intensity, since the revolutionary coup of Gamal Abdel Nasser. Since no other Egyptian politician has attempted to touch this sensitive subsidy.
5 The Egyptian government noted the losses to be approximately US $10 Billion. This included costs of military deployment to the gulf, losses in revenues related to tourism and the Suez Canal. In addition to the Egyptian authorities estimated another $10 Billion in assets and bank deposits left behind by Egyptian workers fleeing the situation. They also suggested that the government would require an additional $7,407 for each worker to create employment opportunities in country.
6 Mubarak has curbed public-populist movements most notably the Muslim Brotherhood, and has restricted independent organizations, particularly NGOs from operating. (Alterman, 2000)
7 Paris club withholds $4 billion debt relief because of poor IMF review, forcing Egypt to pay $350-400 million in Service charges annually (Momani, pg.56)
8 63% of domestic debt is tied to T-Bills, while 37% is owed to NIB (Korayem pg.29)
9 NOIP and GASI are government-operated pensioner’s funds used as a social security for low-income laborers in the country.
10 The National Investment Bank is a publicly (national) owned entity. It controls roughly 25% total bank deposits, and controls funds for the whole of the national security system (NOIP & GASI)
11 NOIP and GASI balances are counted in the realm of domestic debt because they are state owned. This is interesting in that the tax levied is government controlled, and amounts essentially to purposeful debt of both institutions.
12 Government Debt to the NIB quadrupled during the 1990’s, doubling its share of total government debt during the same period. This percentage has been increasing since that time. (Korayem pg. 29)

Bibliography

Abdel-Khalek, Gouda & Korayem, Karima. Fiscal Policy Measures in Egypt: Public
Debt and Food Subsidy. The American University in Cairo Press. Volume 23, Number 1, Spring 2000

Alterman, Jon B. Egypt Stable, but for how long?. The Washington Quarterly. Autumn
2000.

Beinin, Joel and Lockman, Zachary. Workers on the Nile: Communism, Islam, and the
Working Class, 1982-1954. AUC Press, (November 1998)

IMF. Staff Report for the 2006 Article IV Consultation, Arab Republic of Egypt. Prepared
by staff representatives of the 2006 consultation with the Arab Republic of Egypt.
June, 15 2006.

Korayem, Karima. Structural Adjustment, Stabilization Policies, and the Poor in Egypt.
The American University in Cairo Press.

Momani, Bessma. IMF-Egyptian Debt Negotiations, The American University in Cairo
Press, Cairo New York. Volume 26, Number 3, Fall 2003.

Richter, Frederick. “The Gift that Keeps on Giving.” Business Today, March, 2006

United States Congress. Congressional Budget Office (CBO). 1989. Subcommittee on
Europe and the Middle East. Hearings on Foreign Assistance Legislation for
Fiscal years 1990-91. 101st Congress, 1st session, Part 3. Washington: GPO.

US Embassy. 1990. Declassified Cable, May. From American Embassy Cairo to
Secretary of State Washington.

US Diplomacy and Iran

2006-12-28T19:04:00.000+03:00

This is a paper I wrote back in March on American goals and actions in Iran. It is analytical in nature, and therefore does not provide for policy proposal, but rather focuses of the 'hows and whys' of the current situation.

U.S. Diplomacy & Iran;
How we got where we are and where were headed

A Contemporary Analysis
∞ ¶ ∞
Adam W. Kohut
June 5th, 2006

In the National Security Strategy (NSS) released by the Bush administration in March 2006, Iran is cited as the greatest challenge to American foreign policy. Its nuclear technology aspirations, sponsorship of terrorism, threat to Israel, denial of its citizenries “aspirations for freedom,” and its efforts to “thwart Middle East peace,” are all cited as the contentions the Bush administrations wishes to settle. This document comes in the midst of what has been a reinvigorated campaign against the Iranian government and its aspirations, which began in earnest in the beginning of this year. What this paper seeks to achieve is to look at the issues the current American administration has decided focus on, and delineate the steps it has taken to confront the Iranian government thus far. I will couple this empirical study with an analysis, backed by outside sources, of the actions taken and attempt to discern, effectively, the aims and intentions of the policies being put forth, and finally where there consequences will lead negotiations and possible action in the future.
I will begin with a brief on the history of American involvement in Iran. I include this as a precursor because of the significant role the legacy of our historical interactions plays on current politics. I will then begin to examine, in earnest, the consistent volleys between the two nations beginning in January of 2006. References will be made to planning and steps taken prior to this period, but its only recent public knowledge, and the ability for the limited retrospect it provides, gives one a keen sense of where actions will be taken in the future, and it is for these reasons my focus will be from the period already offered, but will at times delve to past resources.

History of American involvement in Iran; WWII forward

Prior to the Second World War and the necessity for moving supplies through to the Soviet Union, there was no direct American involvement in Iran. This initial involvement was minimal, but the nationalization of the Anglo-Iranian oil company by the Iranian Majlis, under the leadership of Muhammad Mossadegh, on April 30th, 1951, began a dramatic shift in American interest in Iran. As negotiations between Iran and the British government, a 60% shareholder in Anglo-Iranian, became increasingly pragmatic the Truman administration began to attempt mediation between the two hostile parties. With the expulsion of the British Embassy in Tehran, after British plans for a coup were found out, they no longer had the capacity to internally direct opposition to Iranian nationalization of its oil resources. Thus began the overtures by British emissaries to their American counterparts for a CIA directed overthrow of Mossadegh and the constitutional government. However the American administration at the time was less than accommodating to the British on the issue. (Kinzer
It wasn’t until Eisenhower replaced Truman that the American attitude toward Iran made a significant shift. With Eisenhower came the Dulles brothers; John Foster Dulles and Allen Dulles, Secretary of State and Director of the CIA respectively. Both were in full promotion of direct American involvement in Iran as its independence generated fears of Soviet intervention in Washington. These fears were propounded by the Korean War, which marked the first major escalation of conflict between the Soviets and the Americans, as well as saw the first attempt by the U.S. of the policy of role back. The emboldment of American foreign policy by the conflict, pared with the Dulles brothers fervent communist paranoia led to an American backed coup orchestrated by CIA operative Kermit Roosevelt, under the code name operation Ajax. (Kinzer)
So in August 1953, after a failed first attempt, granted it was the fledgling CIA’s first, the American coup was successful in its objective. Mossadegh was captured and put on trial, the Shah flew into Tehran from his posh exile in France, and American involvement in Iran came to be firmly entrenched for over two decades. (Kinzer)
The following 25 years saw arguably the most oppressive Monarch of the past century rule Iran with an open US armory and an Iron fist. During the American and Iranian Monarch’s love fest United States arms sales to Iran totaled over $11.2 billion (FY 1950-1979). In the twelve years following the 53’ coup, the United States granted over $1.2 billion in aid to Iran, half of which was funneled to the military. In 1973, on his first official visit to Iran, Nixon concluded a deal with the Shah, which allowed him full access to procure any American military technology bar nuclear weapons. Between FY 1950-1977, Iran accounted for a full 25% of the $71 billion allocated through the Foreign Military Sales program, and was provided with over $20 billion worth of arms, training and upkeep through the US Military Assistance Program. (Library of Congress)
The extensive support from the US for the Shah translated to a relationship that saw Iran become the American watch dog in the Middle East so far as the US turned a blind eye to internal Iranian affairs and continued the exuberant amount of arms sales, much of which was used to oppress its own citizenry from balking under such harsh and impotent leadership, instead of warding off the Soviets.
Even with all the unbridled support and complacence in Iranian domestic actions American interests in Iran would be forever changed in 1979. A lesson the United States has never seemed to learn, and one they experienced throughout Latin America the preceding two decades, is that repression of dissent and popular voice through overt military action lends only to radicalize those in the population. The end result of this phenomenon is in almost all circumstances revolt, or revolution. In 1979 this theses was proved yet again, as the Shah’s influence on Iranian life crumbled, and like the ruins of Persepolis left only the smallest vestige of its past omnipotence.

The Revolution

The revolution in Iran, like all revolutions, is complex. Its support came from a great diaspora of political movements. For a fuller account Nikki R. Keddie’s “Modern Iran” and Roy Mottahedeh’s “The Mantle of the Prophet,” are prime, first stepping stones too a comprehensive understanding of the Iranian revolution. In short, the revolution in Iran took place because of the Shah’s inability to deal with an ever-increasing economic crisis and housing shortage, and his inability to effectively appease crucial factions of the Iranian populace. Including most notably the Bazaari middle class and powerful traditionalist Islamic clerics. (Keddie pg. 214-239) Opting for SAVAK repression, the Shah’s actions only worked to harden the resolve of those resisting his rule. No amount of domestic military support from the United States could quench the Iranian peoples thirst for change. Whereas the constitutional revolution that brought Mossadegh to power in 51’, with its populist anti-British rhetoric, was constitutional in nature, the 79’ revolution in Iran was far more reactionary (Eastern Cauldron) and, learning the lesson of the 53’ coup, vehemently anti-American. (Keddie pg. 238-239)

Stated goals of US foreign Policy

In laying out American foreign policy, in the National Security Strategy 2006, a broad set of US goals are listed, not the least of which pertains to nuclear proliferation. In the NSS 2006 nuclear proliferation is explicitly stated as posing the greatest threat to America’s national security. (NSS 2006 pg.19) The reasons behind this ranking can be found when one looks historically at what a nuclear weapons capability has provided to states opposing US actions; that is, the United States has never directly attacked any country possessing a nuclear weapons capability. This may not seem to say much to the unscrupulous observer of historical American foreign affairs, but when looking back one will find that the United States has consistently unilaterally, and under the cover of NATO, the UN and a plethora of doctrines, attacked and employed coercive uses of economic and military force against nations that have opposed its will for domination. As was the case in numerous countries including, but not limited too; Mexico, Spain, Bolivia, Salvador, Cuba, Korea, Japan (pre-WWII), The Philippines, Vietnam, Yugoslavia, Iraq, Russia (pre-Nuclear Russia), Lebanon, Hawaii, Haiti, Afghanistan, Greece, Turkey, Cambodia, and as stated above, Iran in 1953. The legacy of this imperialist adventurism has always been claimed in the name of freedom and defense. It was either to ‘liberate’ those oppressed, or to defend the ‘natural right’ of the American populace to free trade. (Lens, Bacevich, Horowitz)
The language of the NSS 2006 follows this historical line of reasoning, mirroring the line of the Truman Doctrine, it rationalizes closed markets as an assault to the American citizenries ‘natural’ rights, and further that ‘liberty’ (the right to buy, sell, trade, and own private property) is a fundamental basis to a ‘free society.’ The creation of which is essential to world peace because “free nations do not attack other free nations.”
This logic is found in the NSS 2006 beginning on page three. “The survival of liberty at home increasingly depends on the success of liberty abroad.” This connection made between ‘liberties advance’ abroad and the security of America’s homeland is the singularly most important aspect in understanding what is being called the ‘doctrine of preemption.’ The doctrine rationalizes that “[e]conomic freedom is a moral imperative. The liberties to create and build or to buy, sell, and own property is fundamental to human nature and foundational to a free society.” Freedom, Justice and Human Dignity are prerequisite to an effective Democracy (free government). “Free governments are accountable to their people, govern their territory effectively and pursue economic and political policies that benefit their citizens.” These same governments “do not oppress their people or attack other free governments.” (NSS 2006 pg.27)
The picture then begins to focus. Iran, in Washington’s eyes, denies its people their “fundamental human nature,” and by closing off large parts of its economy to private ownership (Iran nationally owns most of its major industries including; oil, aerospace, and the mining of natural resources,) denies the ‘fundamental’ right of the American populace to invest and take part in ownership of Iranian resources. Further, it is because Iran denies these rights that are fundamental to a free society, that a free society in Iran cannot take hold and therefore, the claims that Iran seeks to “thwart Middle East peace” are justified, seeing as non-free nations will attack others, or as is implied, be attacked by free nations to force them free.
I must diverge now from the philosophy of the NSS and focus on classic geopolitics and the relation it plays in American foreign policy, so that American interest may become crystal clear. As defined by Michael Klare in his essay “The New Geopolitics,” the phrase is reference to “the contention among great powers and aspiring great powers for control over territory, resources, and important geographical positions.” (Pox g.51) As he defines it, geopolitics is also constrained to a “self conscious set of beliefs on which elites and leaders of great powers act[sic].” (Pox, pg. 51) This sort of rationalization was seen, classically, during the period of European colonialization, where rival European powers contended for control of resources and militarily strategic points to access those resources. Klare contends that the “new central pivot” in the geopolitical game is south central Eurasia. The areas importance and influence of geopolitics is seen by its position as an historical cross roads between regions of the Eurasian continent and its contemporary importance as having the largest proved oil and natural gas reserves of any area in the world. Klare continues, and identifies the region as the only point currently in the world where major power interests collide. I do not agree on this point, given the strategic importance South East Asia is given in the NSC 2006 and guiding ideological documents like the Project for a New American Century’s (PNAC) Rebuilding Americas Defenses. However it is obviously the area of greatest importance at this particular place in time given the majority of conflicts and diplomatic pressures have been present there thus far.
In understanding how competing powers are conflicting in the region currently, one must look to what Iran’s greatest resources are; its energy resources. Iran has the second largest proven natural gas reserves, and its oil fields in the south are the fourth largest crude producers in the world. Cooperation on energy resource contracts and development between China, India and Russia has been greatly expanding in recent years. What began as a proposal by former Russian Prime Minister, Yevgeny Primakov, for the creation of a “strategic triangle,” has recently been revived. The three states share a strategic interest in, what is most alarming to American planners, “the push for a multi-polar world.” (Bajpaee pg. 5) This goes explicitly against the guiding ideological documents of the current American Administration. The “Wolfolwitz Doctrine” as well as the PNAC’s documents, both expressly states that the United States must stop, preemptively, the rise of any rival power. (Tyler)
The ‘strategic triangle,’ thus far, has been pursuing greater cooperation in energy exploitation through an Iran-Pakistan-India pipeline, the development of the Yahavaran oilfield in Iran (Its largest onshore), and multiple deals of trading percentage holdings in each other’s energy resource markets. (Bajpaee pg. 5-8) The cooperation between the three involves, significantly, Iran and the Caspian Sea region. (Which all three have historical political and cultural relationships) The United States has taken notice of these relations, and specifically in the case of the Iran-Pakistan-India gas pipeline, has voiced its opposition, and has further proposed its own trans-Afghan pipeline, which was made possible by the US invasion of Afghanistan in 2001.
When these political developments are taken with consideration of the ‘geopolitics’ spoken of by Klare, and further couple it with the already explained American philosophy behind preemption and defense, the current US interest in Iran is clear to see. Not only is Iran a threat to peace and American security because of its ‘tyrannical’ limits to human freedom, the increasing influence of the ‘strategic triangle’ posses the risk of the development of a multi-polar world. In Washington’s eyes it is a strategic and moral imperative that this not succeed. Iran’s acquisition of a nuclear weapons capability further compounds the problems posed to American interest globally, because of the deterrence capability it provides to the Iranian regime.

Why the impasse over nuclear proliferation?

The source of conflict between the United States and Iran over is nuclear program comes from the American claim that Iran is pursuing nuclear weapons. The United States believes that Iran’s hidden acquisition of centrifuges from a black market ring run by former Pakistani scientist Abdul Qadeer Khan, its “refusal to negotiate in good faith” (after two years of doing so) and come into compliance with a draft resolution passed in the U.N. Security Council calling on it to halt enrichment, and finally, Ahmandinejad's call for Israel to “be wiped off the face of the earth,” all as reasons that make Iran’s “true” intentions self evident. (NSS 2006 pg. 20) Iran contends, to the contrary, that its program is only for ‘peaceful’ purposes, and that only after two years of ‘good faith’ diplomacy, and stalled European negotiations, did its resume its enrichment of uranium, which is its right as a signatory of the NPT.
Those are the publicly stated contentions at hand however the elephant in the room is what already was mentioned above. The United States has never attacked another nuclear power. The most contemporary and telling example of this is the unfolding story of negotiations with the Peoples Democratic Republic of Korea (DPRK). American rhetoric under the Bush administration was confrontational to the DPRK until in mid 2003 Pyongyang announced it has converted spent nuclear fuel rods to weapons grade plutonium and subsequently in August 2003 officially declared itself a nuclear power.
The United States amidst all of this has only kept long standing economic sanctions against the DPRK, pursuing no further action except for participating in stagnant six party talks, that as of yet, have come to no avail. In September 2005 during the fourth round of said talks the US committed to non-aggression guarantees, which included the non-deployment and use of nuclear weapons.
These concessions and the lack of any increase of sanction against the DPRK after it had acquired nuclear weapons serves a glaring example to Iran and the rest of the world as to why, for security, they must procure them. The US knows the capability nuclear weapons provide and the danger they pose when in its adversary’s hands. Especially when it has massed troops, military instillations, and maybe most importantly allies near by. As was put by Michael Nacht, the former assistant director of the US Arms Control and Disarmament Agency in the Clinton Administration;
Since the Cold War, the top US military priority, as stated in congressional testimonies, has been to deploy the world’s most effective power projection forces. A power projection force operates in or near hostile territory…Any power projection force needs air bases and ports of debarkation and logistics centers for sustained operations…Their number is limited-a handful in Iraq, and not many more…These facilities are highly vulnerable to inaccurate nuclear missile attack …The nuclear threat to essential US force-projection assets largely counterbalances the advantage provided by US conventional forces. (Mian pg.4)

It cannot be underscored enough the leveling capability nuclear weapons play on the field of military conquests. It is because of this essential ‘deterrence’ capability, Iran’s ability to attain it, and its location in the heart of the “central pivot” of the region contended for by geopolitical actors, that the United States has rated nuclear proliferation and Iran, together, as it’s greatest global concerns. It is by understanding this relation to American strategic goals when engaging in the wiry game of global and domestic diplomacy that we can begin to asses the actions thus far being taken and where they lead the prospect of diplomacy and military action in the future.

The Means to the Ends (American Strategies for Iranian compliance)

For the two years leading up until Iran broke International Atomic Energy Agency (IAEA) seals at the nuclear research facility in Natanz, Iran, in a gesture of good faith, had voluntarily suspended uranium enrichment and allowed consistent survailence and nuclear inspection rights to the IAEA. During the two year hiatus in research the EU-3, consisting of France, Germany and the United Kingdom, were in negotiations with Tehran over a compensation package that would allow for full compliance with Article II of the Non-Proliferation Treaty, (NPT) which stipulates any “non-nuclear-weapon State Party to the Treaty undertakes…not to manufacture or otherwise acquire nuclear weapons”, (NPT pg. 2) while allowing for Tehran to develop the infrastructure for a civilian nuclear program.
Iran broke the IAEA seals on January 10th, 2006 after threatening to do so for some time because of the stagnant negotiations. While the two year halt on research was part of a strategy of confidence building by then Iranian President Mohammad Khatami, the newly elected Ahmandinejad and his government “eventually concluded that it would never achieve its goal by acceding to the West’s demands.” According to Javad Vaeidi, the Iranian Supreme Security Council’s deputy. (Slackman) It is from this point that Tehran has charted a new course in its diplomacy over nuclear technology. Tehran has asserted its right under Article IV of the NPT to develop a research and capacity for nuclear power needs, and because that right is protected by its status as a signatory of the NPT, it has seen no reason thus far to halt any nuclear research. Mr. Vaeidi went on to describe the new path of diplomacy Iran has pursued as “successful,” and saw no likely change in the Iranian stance in the future. (Slackman)

Since the shift in Iranian strategy there has been an exponential increase in American pressure on Iran and other member of the international community to halt the development. To this point, the United States has focused its diplomatic efforts in three defined ways. The first has been through economic sanction, both unilateral and attempted bi-laterally; the second, through the threat of force; the third, through “carrot and stick” negotiations involving the EU-3, Russia, China, and most recently the US itself. As I will show below, all three tracks thus far have been pursued with no considerable change in the Iranian or American stance.
Throughout the process of negotiations the United States has continued unilateral economic sanctions that have been in place for some time, and more recently has begun to pursue newer and more far-reaching attempts at economic sabotage. An article in the New York Times on May 22, 2006 illuminates the newest of such strategies. “Prodded by the United States with threats of fines and lost business, four of the biggest European banks have started curbing their activities in Iran.” The effort has been undertaken by the Treasury and State Department, which has already imposed a $100 million fine against banking giant UBS and a similar $80 million fine against ABN Amro, both for moving money to Iran, which was subject to US sanctions at the time. The four banks cited in the article include the two listed above as well as Credit Suisse banks of Switzerland and HSBC of London. Because these international banks operate and have branches within the United States they are subject to domestic U.S. policy, so that unless the banks are willing to incur the wrath of the U.S. Treasury Department, their international dealings will have to conform to U.S. policy. (Weisman)
The tactic has thus far been effective in that the sanctions apply primarily with the trade and transaction of U.S. dollars, and being that all oil is bought and sold on the international market with the dollar, and Iran’s oil revenues averages $300 Million a day, Iran’s increasing inability to convert its dollars through international banks is a major set back to its economy. This is only further compounded by the United States using its weight in the Organization for Economic Cooperation and Development (OECD) to get Iran’s rating as a business risk elevated in April of this year. (Weisman)
These efforts, when combined with the credible threat of the use of force against Iran, has caused Iran’s overall economic growth to slow to less than 5 percent, its stock market has dropped more than 20 percent in the past year, new investment and construction have declined, and Iranian’s themselves have been sending greater and greater amounts of capital abroad and converting their investments to gold. It is because of U.S. monopoly on the dollar and the eminence of New York as the global banking hub that has allowed the US to pursue economic sanctions to such a generally potent effect. However analyst such as Karim Sadjadpour, who works for the International Crisis Group, believe that short of a sweeping oil embargo and gasoline blockade, Iran imports 40% of its gasoline, Iran, based on it’s daily oil revenues, “can weather the storm.” (Weisman)
As Washington has looked beyond the scope of unilateral sanctions to the UN Security Council, its overtures have not been warmly met by China or Russia. Both countries carry a veto power in the Security Council, and as was mentioned earlier, based on both parties interest in the success of the “strategic triangle,” and the formers heavy dependence on Iranian oil and natural gas reserves, there is small chance that either will be willing to solicit economic sanctions against what has become a vital asset to the success of the threes goal of a multi-polar world. Without their support sanctions, let alone the go ahead for military action, are wholly improbable, and the overall prospect of unilateral economic sanctions from the United States changing the current course of the Iranian regime is even less likely.
Economic sanctions have been backed by what has become a consistent barrage of US threat and intimidation; funneled through both diplomatic, and covert channels. On April 9th, 2006 the Washington Post reported that the Bush administration was “studying options for military strikes against Iran.” In a press conference on April 18th, President Bush was asked whether US action could include the “possibility of a nuclear strike.” The president replied: “All options are on the table.” In a widely circulated article by Seymour Hersh published in The New Yorker, it is revealed that government planners have been “drawing up lists of targets, and [sending in] teams of American combat troops…under cover, to collect targeting data and establish contact with anti-government ethnic-minority groups.” Hersh continues to cite officials who have stated that the use of a “bunker busting tactical nuclear weapon” was actively being considered. (pg.3) Its use would be specifically for the two known underground nuclear research facilities at Natanz and Arrak. One official cited states that if the U.S. were to bomb Iran to stop its nuclear research, “you might as well improve your lie across the board,” implying that the Administration would look beyond nuclear research targets and expand into hitting other vital industrial, military and communications centers.
There is no public consensus on what the threats mean. Kori Schake, a former National Security Council staff member for the President, said; “any talk of a strike is the diplomatic gambit to keep pressure on others that if they don’t help solve the problem, we will have too.” While a former Pentagon policy official, Kurt Campbell believes “the Bush team is looking at the viability of air strikes simply because many think air strikes are the only real option ahead.” (Linzer) Either interpretation is viable, and evidence exists to support both, because in both instances the interpretations prove to be true.
Thus far the threat of American use of force is probably what has kept European pressure on Iran at the point it currently is. Germany and France both make Iran’s two top import partners, respectively. There are considerable amounts of trade money, as well as dependence on both economies for gulf based oil exports, to move either country not to act on Iran. As stated above and evidence from their opposition to the Iraq war indicate, they are not in the game of regional geopolitics that accounts for the reason of US interest in Iran and fear of its possible weapons program. Instability in the region and the subsequent oil market price hike (“Crude Oil Rise Amid Security Concerns”), gives good reason for the European states to be taking active interest in dissuading Iran through diplomatic means. American threats however are two fold and have served a secondary purpose to increasing European resolve.
“Nuclear diplomacy” as it has been called is not a new strategy to be employed by the United States. Whenever it has had a ‘nuclear monopoly,’ and even at times when it has not, past administrations and present have shown a willingness to employ the tactic of threatening the use of nuclear force to elicit its general demands from a State. Beyond the threat of nuclear weapons, the threat of force in general has been used as a diplomatic tool, especially so post WWII. (Horowitz) If one takes history as a lesson then the move by the Bush Administration, to threaten force and the use of nuclear weapons is classic in its consistent with power politics.
Further as was shown with the 2003 invasion of Iraq, the current American administration will ‘preventively’ attack another nation when it finds that nation to be a threat to U.S. security. It has made a sterling example of Saddam's regime, and to draw a parallel to 1945, when the United States dropped two atomic bombs on Japan to elicit an example from it, I do not believe is off base.
When taken in light of how the NSS 2006 defines what posses a threat to American security, Iran’s status defined as a “rouge state” gives credible evidence to both Schake’s and Campbell’s assumptions. The Bush administration views Iran and its possible proliferation of nuclear weapons as the greatest threat it currently faces. It is only obvious that military planners would be actively engaging strategies for a ‘preemptive’ attack on Iran, and that the administration, if it does not get its way, will use them.
The third and currently most active option being pursued by Washington is the “carrot and stick.” The term has come to be used by media and those involved in its planning, but original credit must go to Kenneth Pollack. Pollack, former NSC head of Persian gulf affairs, in a tome of foreign policy analysis entitled The Persian Puzzle, first spoke of using a “carrot and stick” approach in 2004. (Pollack pg. 405) What Pollack’s approach entailed was a multi-lateral agreement signed by the US, EU, Russians, Chinese, and Japanese, that had in it a defined structure of incentives-carrots- and disincentives-sticks- for movement by the Iranian regime in ‘positive and negative’ directions respectively. The rational behind such an approach is that Iran would know before hand what the outcome of its actions would be, therefore if Iran chose not to move in the direction outlined by the powers as positive preordained punitive actions would be immediately enacted by the whole range of powers in unison. This Pollack rationalizes, and is supported by Sadjapour, is the only effective way to employ sanctions against Iran. Where the power of such an agreement is truly found however, is how it defines the decision maker in negotiations. In the case of the ‘carrot and stick’ the ball would be in Iran’s court, given that the parameters and timeline of options is already set out and then presented to Iran in a package that it can either choose to accept or not. In such a case the powers can make conditions knowingly unacceptable to Iranian officials, but because of the framework Iran’s refusal to move in a positive direction can only be blamed, at least by the “international community,” on Iran. This provides a very lucrative political tool for justification to the global populaces by an orientalist tinted, heavily state influenced media lens. (McChesney) While this is the most promising of the options put forth by Pollack where the Bush administration failed, and what Pollack cited as its greatest challenge, was to muster enough international support for the idea before Iran became such a pressing issue for the United States.
Because Washington diverted its resources into other areas, putting all of its chips on the negotiations between the EU-3, Russia and Iran, until Iran resumed enrichment in March, it has lost valuable time in being able to put together a broad coalition of nations to address Iran with the uncompromising manner it wishes to. The apparent eagerness Washington feels it has to act on Iran now, has only made its situation more difficult. Recently however the US has made a dramatic and complex diplomatic move. On Sept 31, Secretary of State Condoleezza Rice said in a press conference that the US was willing to join the negotiations between Iran and European powers. Hailed as a bold gesture by main stream media, when put under scrutiny the offer takes on different light, (The AP)
As pretext to Washington joining any direct talks with Iran, it requires that Iran halt all uranium enrichments activities immediately, something that Iran has consistently before said it will not do. As Daryl Kimball, executive director of the Arms Control Association in Washington commented, “Rice’s reticence about offering the possibility of normalized relations, and the unwillingness to offer security guarantees if Iran comes into compliance [with U.S. demands of ending uranium enrichment], may make it very difficult for Iran to accept.” Kimball further notes that the US did not insist that North Korea first cease plutonium operations, and did hold out the enticement of eventual security guarantees when joining talks with other nations about the DPRK’s nuclear weapons program.
In response to the US overture foreign Minister Manouchehr Mottaki said, “[w]e won’t negotiate about the Iranian nation’s natural nuclear right, but we are prepared, within a defined, just framework and without any discrimination, to hold dialogue about common interests.” “We do not want trouble; we do not want confrontation. We just want our rights” Vaeidi added. (Slackman) By attaching the precondition, Washington’s overture becomes much less an extension of an olive branch, and far closer a small pox ridden blanket. The precondition itself implies that Iran is pursuing a nuclear weapons program, which it has denied from the onset. Also if the Iranian regime agreed to talks with such a precondition it would be saying in principle that it was willing to give up its right to nuclear technology. All of this just for the privilege of direct talks with Washington “is something Iran is unwilling to do,” according to Mottaki. (Slackman) Within this framework it is obvious to see that the gesture by Dr. Rice was little more than a political strengthening card.
Along with the US offer came a packaged plan agreed upon by the EU-3, Russia, China, and the US that offered an array of incentives for Iran to stop uranium enrichment. The incentives include, it is speculated, provision to provide Iran with a “light-water reactor, trade benefits and other economic incentives.” (More Hot Air over Iran) What it did not include however was any reference to a non-aggression guarantee by the United States, which has been required by the Iranian government for any movement. (Slackman) The package does offer vague language of possible punitive measures if Iran does not comply with the incentives, however it offers no specificity to what those possible measures may be. This is most likely the reason why Russia and China signed off on the agreement, speculates Ehsan Ahrari of the Asia Times.
What the result of the past negotiations amounts too then is the political benefits alluded to above when describing Pollack’s ‘carrot and stick’ proposal. In the case of the “bold” move by Washington to offer direct talks, even Dr. Rice suggested to reporters that the US offer was not designed for the Iranian regime, but was rather an overture designed at increasing “positive relations with the Iranian people.” (Peterson) It may have been more accurate however for Dr. Rice to have replaced Iranian people with American. The fact here is that no gesture was made, merely a political gambit by the administration to strengthen its hand when pressing for further punitive action when Iran would undoubtedly refuse to comply with the offer. This move was strategically made with the subsequent sending of the package of incentives to Iran. Because the package is vague in its punitive measures, again hence the signing by Russia and China, it also leaves open the scope and range of American options for future action.
Because of the ambiguity over punitive measures, the offer is not quite what Pollack was envisioning, but obviously was at such short notice, the only way for Washington to get the whole Security Council (plus Germany) to agree on any such measure. Though in the short term it leaves little chance of a united front to ‘punish’ Iran, the fact that it does note non-compliance may be punished, betters American efforts at pushing through sanctions in the Security Council in the future. The recent moves then, though flagrantly nothing more than a knowingly unacceptable ultimatum, were brilliant in their capability to strengthen Washington’s hand with its populace and in future negotiations with Security Council members. The road were these tactics take the impasse over Iran’s nuclear program however is a perilous one.

Where Does the Yellow Brick Road Go?

“This diplomatic effort must succeed if confrontation is to be avoided.”
-National Security Strategy 2006
In reference to ongoing negotiations with Iran

The “diplomatic effort,” as one can see, will not succeed. By structuring its demands through thinly veiled language of “carrots and sticks”, while applying consistent threats on the use of force, including nuclear weapons, continued attempts to destabilize the Iranian regime through covert action and sustained economic sanctions, the United States has done nothing more than given Iran an ultimatum; Comply or you will be replaced.
Iran is in a geopolitically vital region of the world; it has the second largest gas reserves, is the world’s fourth largest oil exporter, and controls the straight of Hormuz, the bottleneck of Middle East oil shipping. It is a vital part of the “strategic triangle’s” ever-increasing interest in energy resource development and control in the region, as well as the creation of a “multi-polar” world. It supports the Hezbollah movement in southern Lebanon, has threatened Israel, and most importantly, is on track to developing an independent nuclear program that could result in Iranian possession of a nuclear weapon capability, which as history has shown is the only effective means of dissuading American intervention.
It is Iran’s pragmatic stance to American interest and its vital role and position in the richest energy producing region in the world, that is of greatest concern to officials in Washington. The threat to US hegemony from the creation of a multi-polar world via an ever-competitive EU and China, and the current block out of American private interest’s ability to invest, are the base components for American interest in control. We are at a time that is seeing the fall of US dollar hegemony and everything that is based upon it. Increasingly competitive European markets have already overtaken the dollar in value of exchange, and the East Asian economies productive capacity far out paces that of the United States. If the US is to cap this advance, American domination of Iran is vital for its continuation as global hegemonic power. That goal is explicitly espoused in the National Security Strategy 2006; “We choose leadership…[w]e seek to shape the world, not merely be shaped by it…” It is clear then that the “negotiations” taking place, can be nothing but an ultimatum. Washington’s control of Iran is fundamental to its goals, and if Tehran is not willing to give in under threat and economic coercion, the only choice left in American official’s eyes is domination through force.

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The Development of Contemporary Egyptian Labor-Goverment Relations

2006-12-28T18:54:00.000+03:00

The Egyptian labor movement shared the experiences of many of its colonial dominated kin. The creation of a cohesive working class set the groundwork for the creation and politicolization of the ensuing labor movement. In Egypt however, the unique experience of the labor movement in a paternalistic nationalist leadership acted as a means for the co-option of labor power by the state apparatus in the post revolutionary period. This historical experience of labor during the first half of the 20th century will help to explain the current situation of labors complete disenfranchisement, and the macro-economic conditions currently acting in Egypt.
The instigation of organized labor has historically stemmed from the development of a singular, large employment industry, where a distinct “working” class can be economically and socially discerned from the owners of production. This development of the working class comes, as economic conditions make personally sustanitive farming unavailable to what was a majority rural population, thereafter causing an exodus to cities and other concentrated areas of industry for employment opportunities. At this point the peasant’s only means of employment comes through wage labor, and he is subsequently alienated from the material production of labor. This movement from the ownership of ones labor, to the selling of ones labor to another individual, gives rise to the distinct class division of proletariat and capitalist. The shift from a life where the authority of survival is ‘nature,’ to one where the control of ones material well being lies in the hands of a tangible and discernable person(s), is one of the principle factors that gives rise to a working class consciousness. This consciousness defines workers as sharing like livelihoods distinct from that of the capitalist. This in turn leads to the discovery of workers collective power as a means of effectively improving ones singular livelihood. This short, general description of the development of a working class and the beginnings of organized labor action, was mirrored by the development of class and collective action in Egypt at the start of the 20th century, and would continue to characterizes its existence through to the military nationalism of the Nasser regime.
In the nineteenth century the Egyptian peasant’s ability to viably continue their existence as such became increasingly unavailable. Through heavy taxation, foreclosure due to non-payment of debt, and the Muslim law of inheritance - coupled with rapid population growth - many Egyptian peasants were left with landholdings inadequate for their personal means. This had the effect of pushing many peasants to find agricultural oriented work in seasonal and unskilled labor jobs. Due to Egypt’s export oriented economy - based on its foreign dominance under British tutelage - much of this work was concentrated in the transportation and packaging industries, and subsequently these industries were the first to experience labor unrest.
This sort of unskilled labor was dependent upon seasonal needs, and often fluctuated daily. Employers would hire a labor contractor that would daily find the needed number of employees. The contractor would be in charge of finding laborers, supervising the work, and would be given the workers pay to distribute, taking his fee from that pay. He would often employ workers at a set rate, and many times would also act as a local moneylender, charging high interest and deducting what he was owed from the workers salary. This organization of daily employment and means of payment made income insecurity and constant unemployment a prolific problem for the masses of the transitional Egyptian peasantry. Because of this sort of flexible daily employment, and the numerous amounts of persons looking for work, a constant glut to the available working pool was generated and further depressed wages and promoted job insecurity. These conditions are what led to the first act of organized labor protest in modern Egypt.
In April 1882 the coal heavers of Port Said went on strike. This first strike was not a product of organized union work, in fact non-such existed at the time in Egypt, nor was it an internal guild conflict as Benin and Lockman argue (pg. 30). The exact origins remain unknown due to a lack of credible sources, it does, however, appear to be a worker and labor contractor created movement, as the strikers dismissed an offer by the government to lessen the percentage cut of the contractors in order to increase their pay. However it formed, the collective action, and subsequent threats of action induced the company owners to grant the wage increase, from one franc per piece to two. Future action by the coal heavers however focused greater attention on the presence of the contractors, and when they again went on strike in April 1907 a principle demand was for their abolition. This trend will lead one to postulate that the collective action taken by workers was principally organized by them.
Though the coal heavers would eventually disappear once oil took over as the principal fuel for shipping, this early example shows the beginnings of class struggle. As a yet to be formed working class - given the ties most wage laborers at the time still had with their rural villages - engaged in the struggle for more adequate compensation for their labor, the ‘us and them’ distinction between employees and employers had begun to form and with it the class consciousness that would define the development and trade unionism and workers movements through the first half of the 20th century.

Because of the mainly seasonal employment of wage laborers, their still strong ties to peasant land, and prevalence of foreign-born manufacture workers (there were 147,000 foreign workers in Egypt by 1907), class cohesion was slow to form in Egypt. As some large-scale employers began to develop however, labor activism became an ever more prevalent force. This early concentrated activism was centered mostly in the cigarette rolling industries and the Cairo Tramway Company’s (CTC) workers. Both these industries experienced labor unrest early in the 20th century, the cigarette workers led mostly by ethnically Greek laborers who had previous experience with labor activism, and indigenous Egyptian workers for the CTC. In both instances the demands of the striking workers became more mature and reflected a growing awareness of the circumstances that surrounded and affected the workers condition.
For example, in October of 1908 a constituency of Cairo tramwaymen had begun meeting and formulated a list of demands that were submitted to the Belgian-owned company, threatening to strike if their demands were not met. Beyond simply asking for an increase in their wage the tramwaymen demanded; the eight hour day, choice of months vacation of months pay per year, the prohibition of inspectors physically or verbally striking and humiliating workers, the reinstatement of workers unjustly fired, the establishment of a committee, composed equally of workers and company representatives to investigate alleged infractions of work rules, and decide on penalties, no dismissal without good cause (and a months severance pay when justified), adequate uniforms at company expense, and the firing of several disliked company employees. These demands showed a greater understanding of the conditions surrounding capitalist employment, and can be seen as the vanguard of workers demands in future labor movements of Egypt.
The tramwaymen not only looked for an increase in the proportional payment for the selling of their labor, but a higher quality of life through a shorter work day and respect from managers, as well as a reduction in the power of management through the establishment of the proposed committee and justified/compensated dismissal. Workers in these industries had begun to realize not only the importance of organized collective action, but were showing an expressed interest in the management of the company. By demanding shared power between management and workers, it is apparent that the consciousness of divided classes with distinct interests was beginning to be formed, and the understanding of the means through which one gained or lost power were becoming apparent.
In the case of the cigarette rollers (WN 49-57) and the Cairo tramwaymen the formalization of labor organization into unions followed the workers first collective action. On March 8, 1909 the workers of the CTC founded its first union and set the stage for widespread labor struggles throughout Egypt until Abd al-Nasir and the Free Officers came to power.

Nationalism and the Egyptian Labor movement

Labor unions were slow to flourish in Egypt. Outside of the cigarette rollers, Cairo tramwaymen, and the MTWU (Manual Trades Workers Union), which only had 1043 members from a diaspora of trades by 1921 (WN pg.69 Table 2), unions were almost non-existent. It wasn’t until the First World War and its aftermath that large-scale industry was sufficiently able to expand in Egypt, and subsequently allow for the greater development of Unionization through the expansion of the working class.
During the war Britain’s grip around Egypt tightened, and had the effect of suffocating, for the time, its nationalist and workers movements. However because of decreased competition from already industrialized European manufacturers, and the increased demand for industrial production that stemmed from the war, Egyptian industry greatly expanded in the years during and preceding the First World War. Most significantly Egyptian industrialists – usually foreign capital or muattamsier (foreign born, “Egyptionized” capitalists) owned - were able to grow by expanding into the now open domestic consumption market that, before the war, had been largely satisfied by imports from Europe. This expansion of large-scale industry was a prime factor in the development of labor activism. As was seen before, in a labor market dominated by demand for unskilled day laborers, worker organization and collective action is exceedingly difficult. Commonly laborers do not work together for extended periods of time, and the endemic job insecurity and resulting glut in the available-unemployed work force, gives the employer the ability to easily find replacement labor in case of worker unrest. Once Egyptian industry was able to mature and start hiring skilled work forces in concentrated industrial locals, organization, a consciousness of class identity, and collective action become a possibility for labor.
The formation of the industrialized working class is what enabled labor organization in Egypt. Politically however, it is the economic circumstances resulting from capital allocation trends, during and after the First World War, which most dramatically affected the course of Egyptian history. The merger of the Egyptian working class and the Nationalist movement came about because of several factors. Food shortages and rising inflation, wrecked havoc upon the Egyptian economy, and most poignantly on the working poor, and when coupled with the injustice of British conscription of hundreds of thousands of Egyptians to serve as laborers for the Allied forces in the Middle East, the rising tide of resentment to British domination (i.e. Nationalism) became inextricably intertwined with the socio-economic factors so harshly effecting workers that were a result of Britain’s involvement in the war. Because of the way these forces played out, we will see that the success of the workers movement became to be understood as one in the same with Nationalist interest.

Workers and the Wafd

During the war and immediately after restrictions on the amount of land planted for cotton were lifted by the British. Though this had a positive effect on large landowners, who benefited from cottons increased market value, and in some cases offered greater employment for the laboring class, the loss of land dedicated to agricultural foodstuffs, combined with a fall of imports from Europe and the demand levied by Allied troops in the region, created a massive food shortage. This was further compounded by a steady rise in inflation (WN pg. 86-87 Table 3). These combined factors culminated in the social transformation of 1919.
In 1918, as the war came to an end, a group of large landowners with nationalist tendencies joined together to form the Wafd. It’s leader, Sa’d Zaghlul Pasha, put forward the demand for full Egyptian independence, and began forming a delegation that would travel to the Peace Conference being held in Europe to press this demand. The full independence of Egypt was the expressed end of the nationalist sentiment there, and though the Wafd was a principally bourgeois political party, and its aim was the transfer of power from a British dominated elite to an indigenous Egyptian elite, it was the only political party on the scene during this period that proposed a fulfillment of the nationalist sentiment. The Wafd in fact were quite conservative on labor issues, and had showed no support for any militant action, mass agitation, and much less, a social revolution.
For workers in this case the drive for nationalism, and subsequent support for the Wafd, was because of its historical experience under a British controlled economy. British controlled police had up to that point been the principal means through which strikes were broken; the labor contracting system had been established by British owned enterprises, and the lack any legislation for workers rights had existed under a British dominated government. For the workers of Egypt the fulfillment of the nationalist goal was a means to remove one major obstacle on the way to egalitarian rights. Though the ends of both social strata were different, the means they would be attained by coincided. So under the burgeoning bourgeois leadership of the Wafd, and with the popular support of workers the first nationalist upsurge in Egypt began.
In August 1919 the Cairo tramway workers went on strike, apparently because the CTC was planning on mass firings. This seemingly independent act had the effect of bursting the damn upon labor unrest that had existed since the war. Within days a mass of workers where on strike throughout the entirety of Egypt. All tramways systems in Egypt’s three major cities were on strike, railway men were on strike, bakers, journalist, tailors, carpenters, electricians, bank employees, waiters, kitchen workers, cigarette rollers, sugar mill workers, and more. This wave of labor activism was accompanied by a massive increase in the formation of unions in many of these industries, particularly among white-collar workers. The spread of unrest and unionization however was not independent. British intelligence from the time indicated a group of Italian radicals, who - with support from the Wafd - were actively attempting to generalize the strike and encourage the formation of unions. Though this doesn’t show complete supervision by the Wafd in labor militancy, it begins to exemplify the cohesion that was slowly developing between the two classes. Particularly on the side of the Wafd who were now beginning to support labor unrest as they saw the benefits to their own political agenda form. In the four years preceding the August strike wave labor unrest continued as inflation sustained its rise (WN pg. 86-87 Table 3), and soon one could not tell a difference between nationalist and labor activism. Some high members of the Wafd were connected to terrorist organizations that were in turn connected to unions; many of the top positions in unions became to be held by Wafd members – the two movements had forged into one.
In the aftermath of 1919 the Wafd was elected to power in January of 1924. Soon after its installment the Wafd moved to isolate and dismantle forces, particularly those within the urban working class, which could pose a threat to its power. It first moved to crush communist elements within the labor movement as well as the CGT, and also took control over the Cairo Tramway Worker’s Union. After this the Wafd looked to consolidate power over the unions already within its sphere of influence and created the General Federation of Labor Unions in the Nile Valley. This paternalism, however, was not meant to embolden workers, but rather to co-opt the organizational structures of the unions as a means to suppress and control militant labor activism. The members of the Wafd government were looking to attract investors and foreign capital, and the preoccupation of negotiating with the British, meant that little attention was paid to the continuing demands and unrest emanating from the disenfranchised workers. It is because of the Wafd’s conservative disposition and class basis that the promises vocalized to labor during its rise to power did not materialize.
The Wafd did not stay in power long. By the end of 1924 failure to negotiate full independence with the British left the Wafd with no clear intentions. Working with the British, King Fu’ad was able, under threat of the British armed forces, to cause the resignation of Zaghloul and the dismantling of the Wafd government. With its fall also came the fall of the GFLU. Because of the top down structure of union organization sought by the Wafd the unions could not survive. Stripped of a sympathetic government, the organizational leaders of their movements and now faced with a hostile and oppressive regime, labor activism again quickly faded.
There thus began a cycle in Egyptian socio-politics that would act to form labor consciousness, and affect the way and means it would organize. Because of workers continued popular support for the Wafd, the reactionary regime that King Fu’ad and the British implemented came down equally as hard, if not more so, on labor. The Wafd however would survive, sustain the links to its popular base, and through organizing boycotts, protests and other collective action would eventually force the British and Fu’ad to recognize that any bargain made to secure Egypt’s independence (even if it were merely nominal), would only be popularly recognized if done so by the Wafd. Inevitably free elections would be held in accordance with the 1923 constitution, and the Wafd would return to power and the whole cycle would start again.
It is through this recurrent sequence of events that labor began to see its interest interlocked with nationalist interests. This reality of labor politics in Egypt was one of the greatest supports and reasons for the success of the Free Officers, RCC and subsequently Nasser’s reign of power.
Throughout the time period between the Wafd’s first tenure of power and the military coup of July 23, 1952, the labor movement was in constant flux. Over this expanse, though the labor movement consistently identified with nationalist goals for reasons described above, the continued failure of the Wafd to substantiate any gains for the labor movements while in power slowly led to a weakening of its popular base among workers. The inability of the Wafd to substantiate its claims of supporting workers came to be seen more because of its background as a landowner-bourgeoise dominated movement. So by the time that the RCC released its six-point plan, which included; the abolition of the remnants of feudalism, the promotion of social justice, and full Egyptian independence, the labor movement came with nearly unanimous support. The decades of parliamentary democracy had failed to produce any substantive gains for labor, had not got Egypt full independence, and had not rid the country of the popularly disliked monarchy. The success of the military coup in accomplishing at least this last goal gave it immediate substantive credibility.
After the RCC’s initial rise to power, unions (such as the transport workers) called off planned and/or threatened strikes and vocally expressed hope in the new regime. However, groups such as the Founding Committee for a General Federation of Trade Unions (FCGFTU), though expressing hope in new regime, also called for the restoration of democracy, lifting of martial law, and the restoration of democratic liberties. This exemplifies the trend for labor’s independence that had begun to develop during the fluctuating period of Wafd control. The RCC however, soon demonstrated its feelings on independent labor activism.
A strike at Bayda Dyers Company took place on August 12th, as workers began a sit in at the mill, and some fires were set to auxiliary buildings. On the 13th Army troops arrived and were greeted by multiple protests. Shots were allegedly fired and the resulting aftermath left two soldiers on policemen, and four workers killed, with many others wounded. The military authorities quickly arrested 545 workers charging twenty-nine with various offenses. Two prominent labor organizers in the region were sentenced to death and many of the others charged served substantial jail time. This response to labor activism set the precedent for how the military regime of the RCC would deal with labor unrest that spilled over to means outside of government sanctioned control.
Even with the blunt repression used by the RCC, labor organizations were quick not to condemn its actions. The DMNL and FCGFETU issued statements condemning the violence and linked it to pro-imperialist interest. When the sentences were announced both mentioned organizations loaded speakers (provided by the military) onto trucks and drove through working class areas urging people for calm. The support from these labor organizations came with the hope that in the future labor could work through the established government to press its concerns. This however would prove unrealistic.
To assert its control over the labor movement, the RCC had to effectively purge the movement of its independent elements. Politically this meant shoring up support among the popular majority of workers, so that other elements could be eradicated. This came on December 8th, 1952, with the inaction of three separate pieces of labor legislation.
The first of which was the Law of Individual Contracts. The LIC allowed for free medical, transportation to factories, increased severance, longer annual vacations, and the right to appeal dismissal. Arbitration and conciliation in Labor Disputes required mandatory mediation on all labor disputes, and the Law of Trade Unions allowed agricultural workers to join trade unions, which had to this point not been allowed. Though the legislation seemed a concrete victory for labor, and it did in fact win the RCC broad support, it also implemented severe restrictions on mass organization. The laws dissolved the development of independent labor federations, established separate blue and white collar unions for employees within the same industry – further fractioning labor organization- outlawed federations of labor, and made union membership compulsory for any workplace where there was a two thirds majority already joined – allowing owners to set up their own unions and then require all workers to join once they were able to induce two thirds to do so.
The new labor laws, along with earlier land reform did win the RCC broad popular support from workers and peasants. Soon there after all political parties were dissolved, newspapers closed and 101 political figures arrested. The only party not affected by this broad crackdown however was the Muslim Brotherhood, who up until that point supported the military regime and was rewarded by not being considered a political entity. Soon however, political crises ensued.
Growing popular support for the re-institution of parliamentary democracy boiled over. During a memorial held by the Muslim Brothers on January 12th 1954, many of the speakers denounced Abd al-Nasir as a pro-American dictator. Soon after the RCC declared the Muslim Brothers a political organization, which meant their dissolution according to earlier laws enacted. Nasir then attempted to seize power by assuming the position of premiership and the presidency, relieving Muhammad Najib from the latter. Mass protest broke out and Nasir was forced to reinstate Najib, who subsequently relinquished press censorship. Then on March 25th the RCC declared it would formally allow the creation of political parties, and promised to disband itself by July 24th. Immediately the Army protested, demanding the RCC retain power. The Muslim Brothers also withdrew support for the opposition because of the resurgent popularity of the Wafd – which came about once press censorship was lifted – and meant that in the instance of a free election the Wafd would be returned to power.
During the crisis however the concrete measures taken by the RCC to establish support among the working classes proved vital. Though the far left and proponents of an independent trade unionism supported the opposition, a key constituency of workers – most notably the Cairo Transport Workers- supported the RCC because of the gains provided by its labor legislation. The CTW held strikes and rallies in support of the RCC, which effectively had the result of curbing popular demand for its dissolution. To say the least the RCC and Abd al-Nasir weathered the storm and came out with far greater power, and a consolidation of government that was enough to secure its form, and domination of Egyptian politics. Because of the laws enacted by the RCC, and subsequent legislation by Abd al-Nasser an independent workers movement is to this point of no consequence in Egyptian politics.
The co-option of the labor movement into a paternalist relationship, with the state as its head, early on by the Wafd proved to be the foundation for a habitual pattern of nationalist parties and the leaders of labor movements. Because of the earlier experiences of the rise and fall of labor’s power, with that of the Nationalist Wafd party, labor was inclined to initially support the nationalist RCC in its campaign to consolidate power, even when that meant initially hurting itself. This coupled with the concrete concessions made to workers early in December 8th 1952, proved enough to galvanize worker support for the military dictatorship, allowing it to weather its greatest initial challenge. In its aftermath Abd al-Nasir’s control of Egyptian politics became solidified enough that subsequent labor legislation – if there was any – was met with no resistance.
This pattern of State Paternalism persisted past Nasir’s reign and to the current day, and is what has aided in the current situation of the Egyptian working class. Sadat’s declaration of the Infitah, and the subsequent liberal policies pursued by his predecessors have found no mass opposition from those whom it adversely effects most, as the forms of organization which give rise to labor independence and collective bargaining power were stripped forever stripped in March 1954.
This understanding of the historical experience of Egyptian labor aids one, in an attempt to understand the State’s relationship to economy, and the current organization of socio-economic classes in Egypt. This is integral in understanding the effects and relationships between macro-economic Egyptian policy and the pressures currently exerted on it by international institutions such as the WTO and World Bank.

Class realization in a new society

2006-12-28T18:53:00.000+03:00

It is an interesting thing when one comes into an understanding of his ‘class’ in a society. I have done it before, its slow process was delayed and drawn out through an overall awakining to the conciousness of my self, that lasted some three to four years. To realize your existence in a society, the roots of which form upon the finite, and socially obstructed human mind, is to question the entire moral fabric of oneself. To realize the understanding that presents itself upon the material necessities of status is to see your skin is merely an accessory to your personified being, that un-tangible, marketable anatomy.
What I experienced now is class allowed through the aetherial blanket brought by military, economic and racist ascendancy. I am publicy scorned, resented, yet still respected. People want to know me because of what my skin and clothing represent. Mostly they want to know me for the insignia of my passport. I cannot sit idily – alone, without the random stranger to be keened in interest of myself. Some for whom I am, their acknowledgement based on a material related recognition, but more for the status afforded by my kin. What is seen in me is a door. One through which a person may enter upon a society separated and dominant too their own. I offer the material promise of wealth, and the theoretical dominance of race. The latter having been bred through, first, colonial dominance, and presently, the international “aid” of the same racist and oriental minded institutions which promise the wealth. The vicious inter-related system of internationalism
I have over twenty numbers written in varing degrees of English, two in Arabic. These are not people I know outside of the random conversation we may have had. A botched attempt at buying the paper, at one point, a lone, coffee at the ahwa, an old man handing me a pomeegranite, the myriad of circumstantial situations rival that of Odysseus and his Aegean crew.
I will not call these numbers. The interests of myself are not there. If I am to be used to what am I doing myself? However, some who I have become to know, I have opened in much the way these look to open me. I, conversely, have willingly opened to them.

It is at once a cohesive, degrading, racists, classcist, mysoginoist, and impeding force of human organization.

What the Hubub of Ramadan is really about...from a westerner

2006-12-28T18:49:00.000+03:00

What the hubbub of Ramadan is truly about…
As I stood in the road today, once again attempting to flag down a ride home, a white-ish, somewhat old Land Rover approached from the direction of my gaze. Nothing stuck out about the vehical in the Iftar rush of drivers home, but as it approached me, it slowed down and the woman in the passenger seat extender her hand. What she extended in her hand left me at first confused, and then flattered. She had handed, roughly, a five-pound plastic sack of freshly butchered lamb. I was taken aback, but responded with a traditional hand over my heart and warm shokran. Then as the couple had appeared, they drove off down the road, leaving me standing with a translucent bag of raw meat.
This sort of behavior is typical of Ramadan in Islamic areas. To give food to those less fortunate, apparently I looked the part, extra money to charity, or even a Ramadan lamp is the cultural moor. It is apparent when one walks the street of Cairo, as the sun begins its final decent to the desert in the west, everywhere one looks there are tables being set, laden with food, almost burdened, with food and with drink. Standing as oases in the wasteland of asphalt for those of the community, or one who just passes by, to come and eat and join in community. It is truly a touching matter to bear witness, and has no comparison in our cultures of the west.
With this customary charity and piousness through charity, comes also the daylight fasting through out the month. From when the sun rises until one can see the first two stars in the twilight sky, there is no food, no water or otherwise, and no smoking. When this routine fast is broken, that is Iftar. Now I’m not sure which of the three parts of the fast weigh heaviest on the Caraneese’ mind, but the unison of the orchestra of lighters may give one a clue.
I was invited to Iftar at Muhanad’s (yes his name is spelt that way) house. His mother had cooked up some amazing food, and I got to spend time with Muhanad, his family, and an assorted collection of foreigners. (Sudan, Brit, American etc…) Also there are Ramadan lanterns. These gaudy gold plastic things are everywhere. Apparently the story behind them is that way back when women did not go out at night, especially not alone. However most activity takes place at night during Ramadan and it becomes essential. So some king somewhere decreed that a boy be assigned with a lantern to walk in front of groups of women at night during Ramadan as a means to tell everyone that they were approaching and to give them some security. Since then the tradition has taken off and now, most houses, and at the least every small neighborhood community has a Ramadan lantern of some sort. Whether it be small, or six feet tall like some that I have seen.
Early in my stay here I happened to wander down a street and come across a score of people attempting to hang the community lantern over a street cross-section. It was rather amusing to see kids running around, men yelling- though not angrily- attempting to direct the people standing on their balconies to hoist this monstrosity into the air and then get it some what centered.
This whole celebration, and the cultural moores that surround it are really something beautiful. It is a time of increased piety, prayer, community awareness, and above all care for those who are less fortunate. It is a means to set an example for one month of the year, for what the rest of the year should look like. Whether it does or does not one will just have to wait and see.
~Adam