Mubarak's Egypt

Nasser and on the other Sadat’s legacy, marked by limited economic and political liberalisation. In spite of the radical shifting away from a socialist, tightly state controlled economic system towards limited and tolerated liberalism and the transition from single party rule to controlled pluralism, essentially the Egyptian regime remained authoritarian political; based on institutional and social power balance and the ultimate authority of the office of the president at its very core.

It is, above all, the institution of the presidency that safeguards the essential supremacy of the Egyptian state. The President was able to pit the various sections of the ‘state-managers’ one against the other. He was also able to mobilise the bourgeoisie against the ‘state-managers’, to make use of the threat of the mass movement of terrorism or of an Islamic Revolution against the bourgeois mass, to threaten the organised political opposition with the military and to keep the military at bay by making use of the hopes the opposition has invested in him. Mubarak, who neither enjoys the enthusiastic support of the popular masses nor of the bourgeoisie, has been reduced in his radius of action to a juggling act whose space is continuously narrowing and which expresses itself above all as a strategy of doing as little as possible and maintaining the status quo.

Mubarak has based his legitimacy on legality and rationality. Stability and the maintenance of the system have become the central matters of concern in his policies, which have been characterised by pragmatism and technocracy. Mubarak has tried to stay aloof from active real politics. To sack the government in response to the ongoing demonstrations can be seen under this light. Mubarak has left governing to technocrats, often experts, and has operated like a coordinating manager and tried to position himself as father of the nation.

The inviolability of the president – the president and his family were protected by taboo, any one who went too far risked imprisonment or to lose their publishing license – has kept him out from day-to-day politics and conferred on him the aura of a super-figure, aloof from politics and all its negative implications. Whereas politicians and ministers have represented the political class, involved in petty politics, the president has represented the regime and the state. The fact that the president, and with him the regime he represents, has been kept out of any discussion, and has not been publicly questioned, has contributed to the regime’s consolidation and its de-politicisation. The state has not interfered in social issues, but only defended governing against broad popular participation.
 
Economic conditions

Mubarak has always made a connection between economic development, one of his major concerns, and democracy. He has not initiated any new economic development strategy, and therefore has relied in his economic policies mainly on the strategies and advice given by the IMF and the World Bank.

He has tried to rationalise the exploding state sector, reduce subsidies, raise agricultural prices, attract foreign investors and other measures aimed at reducing expenses. However, infitah (economic liberalisation) policies had triggered off a growth and consumption boom and, as long as this boom continued, the political costs of more significant reforms seemed to be too high so little was accomplished.

In spite of infitah, Egypt had remained dependent on rent revenues. Egypt’s economy was not nurtured by private economic activities, but Egypt depended on its own oil production, transfers from Egyptian workers in the oil-rich Arab countries, Suez Canal fees and external aid, mainly from the US. Too few of these revenues were invested in infrastructure, agriculture or the modernisation of the industry, too many went into services, were spent on armament, or were dissipated on import driven consumption.

Egypt suits Alan Richards’ and John Waterbury’s definition of a rentier economy: where the state undertakes all the resource mobilisation and infrastructure development functions, but captures the surplus of its own activities, a substantial portion of private-sector profits and external rents (such as remittances of Egyptians living abroad) in order to finance its own expansion. The goal is for the state to dominate all aspects of resource allocation and to seize, once and for all, the commanding heights of the economy.

The control and distribution of economic resources has given the regime the opportunity to control most of Egypt’s public and private economic activity. The regime could build up a veritable clientelistic network through the allocation of economic means and licences. Since the economic system has made up an essential part of the regime’s authority and power, Mubarak’s radius of action concerning reforms in the economic field has been rather limited.

The transition from states to markets in the developing world has not been a smooth process and neo-liberal policies have intensified already existing inequalities and divisions. The economic reforms as proposed by the IMF would have further negatively affected the rather poor mass of Egyptian society.

The Egyptian regime did not dare to make a radical break with populist policies. The food riots in 1977 had shown the regime’s dependence on populist policies, which tempered the disenchantment and anger of the masses, who were living on the verge of poverty. On the other hand, Mubarak’s regime also depended on the support of the enlarged and rich bourgeoisie, which has been used to a life of consumption. Any measures trimming the living standard of the bourgeoisie would have weakened their support for Mubarak.

Instead of necessary adjustment programs, the government chose a softer version; subsidies were covertly cut, and the state gradually retired more and more from public services.

This policy avoided sudden deep cuts, but it worsened the quality of public services and affected mainly those social groups which were dependent on the state’s welfare services. One of the comprehensible consequences of the regime’s policies was the decreasing quality of the Egyptian education system. Unable to cope with a steadily growing young population, the state left public education to its own devices. While those who can afford it have sent their children to private schools (often foreign schools), the middle and lower classes have been dependent on the weak public school system.

Often insufficiently trained teachers have to deal with mounting numbers of pupils. The poor wages of the teachers and the situation in overcrowded school classes have led to a certain kind of privatisation of public education. Most of the pupils have been obliged to attend the private classes of their teachers, held in the early morning before school or late at night after the school day. For most young Egyptians, attendance at one of these paid private courses has been indispensable for completing school education. As a consequence of the state’s slow and covert withdrawal from public services, private and mainly Islamic civil associations emerged to fill the vacuum.

The gap between rich and poor further widened with reform policies. While wealthy Egyptians are not shying away from showing their affluence, which is displayed through fancy cars, luxury villas and lavish Golf resorts with watered green lawns at the edge of the desert, the majority of Cairo’s population lives in informally and badly constructed buildings and more than half a million people even live in the so called City of the Dead, an old Cairo cemetery.

However, in spite of severe social problems and an empty treasury, Egypt’s tight alliance with the US helped the regime to manage the situation and to maintain social peace. Washington has invested much in Egypt and has also gained much from Sadat’s policies, which put an end to the threat of an Egyptian-Israeli war. After the Camp David Peace Treaty Egypt has become one of America’s most important allies. Egypt has an important place in the Pax Americana. Therefore Washington has had too deep an interest in Egypt’s stability to alienate the regime or to let it go under. Though the US has tried to move the regime to advance economic liberalisation, yearly US aid of over 1.5 billion Dollars has cushioned the regime against hard and unpopular choices. The ongoing revolt in Egypt’s streets and people’s demands for freedom and democracy confronts the Obama Administration with a dilemma: stick with Mubarak an authoritarian ruler for the sake of stability or support people’s demands and risk uncertainty and instability.

The regime’s power basis

The dominant party in Mubarak’s Egypt has been the NDP (National Democratic Party), the successor of the National Socialist Rally, established under Sadat as a force in the centre of the spectrum.

Although the multi-party system has been dominated by the government party, the party’s rootedness in society has remained rather weak. The NDP does not support any particular political ideology or policy, nor does it show a public presence in people’s minds or lives. Public presence through political activities has been confined to the periods of electoral campaigns. More than a political party in its classical term, the NDP is a conglomeration of individuals with different political tendencies, mainly composed of former bureaucrats and representatives of the economic elite. Instead of a common ideology, the party is welded together through the “presidential majority”.

In spite of formal transition to a multi-party system, the function of the legislature has remained extremely weak in Mubarak’s Egypt. Supreme power has lain in the hands of the president and the governing party has been a rather passive instrument, legitimating executive and presidential policies. The majority of the bills have been introduced to the parliament by the executive (government) and only a minority of bills which were passed by parliament, were based on parliamentary initiative. This practice has limited the functions of the National Assembly to that of a notary with the task of giving its blessing to the government’s policies. Irregularities, election fraud and the obstruction of political rivals  have guaranteed elections results in favour of the regime.

Participation in economic and political power on the side of the regime has been the major motivation for joining the government party. In terms of ideology, views and ideas, there has hardly been coherence among the actors. Even the county’s cabinet is believed to be split into various fractions defending controversial state policies.

In recent times, the number of NDP deputies with a business background has mounted. Liberalisation has made the formulation and implementation of economic policies no more an exclusive preserve of the state bureaucracy, but a product of continuous negotiations with various factions. The Mubarak regime has sought the cooperation and accommodation of some business groups. The regime has applied the tactics of power balancing. Whereas some entrepreneurs, who are supportive to the government, are favoured and can profit from the distribution of economic resources, others are left outside of the patronage network.

The growing entanglement of business elites with the regime has reflected their mutual dependence. Economic liberalisation has led to the correlation of the interests of the regime and those of the country’s businessmen. In this context, the increasing numbers of businessmen in the ranks of the government party reflects, on the one hand, the growing influence of businessmen in Mubarak’s system, but, on the other hand, it also demonstrates that the business elites could not develop an independent interest group, but were still highly dependent on proximity to the regime, which allocates economic rights and resources.

The access of businessmen to the National Assembly, for instance, has served the regime by satisfying the economic elite’s growing demand for political participation.

Although one can find a semblance of a bourgeois state in Egypt, in reality, the bourgeoisie does not hold power, because it does not have any coherent strategy, or organization, and also seems incapable of forming coalitions with other groups. Being dependent on the state, which has been in control of the distribution of economic power and resources, the bourgeoisie, cannot risk biting the hand that feeds it.

The dominance of the NDP does not express the dominance of a particular political tendency within the bourgeoisie, but rather the supremacy of the state over the whole of the bourgeoisie. Nazih Ayubi speaks, in the context of a de facto one party domination in a formally permitted multi-party system and of a stagnant economy, of ‘Mexicanization.’

The ruling coalition of politicians and bureaucrats-cum-businessmen and the military seemed stable, but with changing proportions. They can claim the main part of the country’s resources. The regime allowed the professional syndicates and the local elites increasing freedom and decision making scope, in return for their allegiance to the central government.

Egypt’s integration into regional and global financial markets seems to have even reinforced the powers of the state bureaucracy. In order to keep the army at bay - the regime’s most important pillar, besides the economic elites - Mubarak has permitted the army a rather large scope of action in independent economic engagement. The army has a share in various companies.

The profiteers of the prevailing double system, which combines economic liberalism with a high degree of state control, have been approximately thirty economic magnates, whose economic empires are continuously growing. They have profited from the liberties of the new economy and good connections to high functionaries in the public sector. The entanglement of the army, the high bureaucracy and a little clique of businessmen in economic activities has supported the flourishing of nepotism and corruption. No wonder that the army has no interest in uncontrolled regime change and social revolution. Regime change is neither in the interest of the country’s military or economic elites, nor in that of its international partners and allies. Too uncertain would its outcome be, too many unknowns prevail.