MASS REBELLION by JON ROTHSCHILD Not long ago an Egyptian weekly reported that a wealthy merchant, accompanied by three members of his family, hod spent 950 Egyptian pounds in a single evening amusing himself at one of Cairo's leading nightclubs. Not ungenerously, he left a 50 pound tip for the headwaiter and other servants. The weekly noted that to make 1,000 pounds eighty-three workers paid at the minimum monthly wage of 12 Egyptian pounds would have to work for a month. It was not specified which of the nightclubs was involved. But many of them, like the Auberge des Pyramides, the Ramses, el-Liel, and the Arizona, are, as the International Herald Tribune put it, "temporarily out of business. A mob of more than 1,000 peasants descended on them Wednesday (January 19), stripped them of their food and whiskey, and put them to the torch." The nightelubs, symbols of the enormity of social inequality in Egypt, were special targets of the thousands of workers, peasants, and students who took to the streets of Egypt's major cities January 18 and 19, hours after the government had announced an end to subsidies on a series of products of basic necessity. But they were by no means the only targets. In Alexandria dock workers sacked the home of Vice President Husny Mubarak. In Aswan, 600 miles south of Cairo, demonstrators burned down the ceremonial arches that had been erected to welcome Yugoslav President Tito, who was expected on a state visit which never took place. The headquarters of the Arab Socialist Union in Cario were destroyed. It was not the first time Egypt had been shaken by popular explosion in recent years, but nearly all observers agreed that something was different this time. "The violent outbursts of popular discontent due to the decline of buying power, for example on January 1, 1975, or during Ramadan 1976, did not really take a political Tum. " Wrote J.P. Peroncel-Hugoz in Le Monde. "But this is not the cose with the present troubles, in the
EGYPT AGAINST SADATISM course of which the crowds have attacked both the "dandyism" of the president and his policy of economic opening 'carried out on the backs of the poor. We are hungry, shouted demonstrators under the windows of the foreign banks that once again have their representatives in Egypt. The popular seizure of the provincial cities also lent the situation the allure of a general insurrection." United Press International correspondent Ray Mosely also spoke of a "virtual insurrection. The events were triggered on January 17, when the government, af the behest of the International Monetary Fund, decreed the suspension of subsidies designed to hold down the prices of food and other basic products. The proctical effect was to raise prices. Bottled propane gas, widely used for both cooking and heating, was to go up 46%, gasoline 31%, cigarettes 12%, flour 63%, rice 16%, meat 26%. The first reactions broke out in Alexandria on January 18. Later the same day a large crowd massed in Cairo's Liberation Square, Chanting "With Itfe and blood we shall bring down prices," they tried to march on the People's Assembly building. The police attacked, the demonstrators defended themselves, and the battle was on. By the end of the day strikes and demonstrations had broken out in Helwan, in Aswan and other cities in Upper Egypt, and throughout the Nile delta, in Mansurah, Zagazig, Faqus, and other towns. In the late afternoon police began firing on protesters, The universities were ordered closed and the students sent on "vacations. " A thirteen-hour curfew was clamped on Cairo, Alexandria, and Suez, and police were ordered to shoot violators on sight. But the measures of intimidation did not work. By the aftemoon of January 19 Liberation Square in Cairo was packed with thousands of youth. The crowds refused to disperse when the curfew went into effect and the cry went up, "We are dying of hunger anway, so kill us with your bullets Sadat." And so he did. For the fist
EGYPT time in twenty-five years, the army was massively used against civilians. Cairo was virtually occupied by troops and the fighting went on into the night. Officials put the number killed at about seventy-five and said there were some 800 wounded. Unofficial and undoubtedly more realistic reports set the number of casualties at about three times that. There were at least 2,000 arrests. But the government was forced to back down. The price subsidies were ordered restored late January 19. Grinding poverty The government's decision to suspend the price subsidies seemed almost tailor-made to trigger a social explosion. As was shown last year in Poland, a provocative and sudden blow at the standard of living of the majority of a population can readily ignite pent-up social discontent and provide the masses with a focus for their rage. In Egypt, though, an additional factor was operative. The price increases, had they gone into effect, would have represented not merely a decline in the standard of living of the masses, but would have brought the workers, peasants, and the majority of urban dwellers to the very brink of starvation. It was no exaggeration when several international bourgeois newspapers referred to the price subsidies as the thing that "allowed Egypt's people to keep eating." The average per capita income in the country is approximately $5 a week. The minimum monthly wage EE12 (about S16). A simple comparison of this figure with the curient prices for goods and services of basic necessity draws a picture of the living conditions of the average Egyptian. A pair of shoes costs EE5. Meat is EE2 a kilo. Monthly rents for apartments in popular neighborhoods run at about EE15 and finding one often takes as long as five years. For the city of Cairo as a whole, there are an average of 2.5 people for each room. During the past fifteen years the population of the city has risen from 4 million to 7.5 million (more than 11 million in the greater Cairo area, but there has been virtually no Increase in available services, even of the most elementary variety. City buses designed to carry 80 passengers are often loaded with at least 200. It is estimated that the price increases consequent to the lifting of the subsidies would have added some EE3 to the monthly food bill of an average Cairo family. Such items as meat and leather shoes are already out of the range of the Egyptian workers. The end of the subsidies would have raised staple foods to the same category Prices are already rising at an alarming rate due to inflation. The official inflation rate is pegged to an index based on the 1965-66 "household budget, " described by the Financial Times as "a fairly menial basket of mainly price-controlled commodities. on this basis the three years prior to the end of 1975 showed a 30% increase in the consumer price index. In fact, however, the real inflation rate for a working clas family in Cairo or Alexandria is estimated to have been 25% a year during that period, The current rate is on the order of 40-50% a year.
The situation is little better even for the middle class. The average starting salary for a university graduate is about EE25-30 a month. The economy is unable to generate jobs fast enough to absorb the 30,000-40, 000 yearly university groduates. Hence, "most of them wind up in stultifying jobs in govemment ministries - some ministries have four employees for every job - anc they have nothing to do but sit at desks all day and complain about the cost of supporting a family on their miserable salaries. *(International Herald Tribune, January 24, 1977) Such a goverment employee "would have to mortgage his earnings for 10 years to make a down payment on a less than average apartment at current prices. " (Financial Times, June 28, 1976.) The bulk of this "down payment" consists of "key money" to the landlord - that is, a bribe. Furnishing the apartment would then cost between S2, 500 and $5, 000. The result is that even employed university groduates generally continue living with their parents. All this, of course, defines the situation of employed workers and government employees. The regime does not publish unemployment statistics, but unofficial estimates run to 3.5 million out of a total population of 40 million (more than half of whom are less than 20 years old.) Af least 1 million and perhaps as many as 3 million Egyptian workers have left the country in search of jobs. Thousands of others live in sprawling shanty towns around the fringes of the big cities. One of the most notorious, constructed among graves of an old cemetary in Cairo, is called the "city of the dead." If conditions in the cities are appalling, those in the countryside are perhaps even worse. Life expectancy is still less than 40. The illiteracy rate is 70%, higher
than it was ten years ago. An estimated 60-70% of the tural population suffers from bilharzia, a worm that is picked up from stagnant water and burrows into the veins. It results in anemia and makes people especially susceptible to various fatal diseases, one of the main reasons for the low life expectancy. The past three years have seen repeated outbreaks of popular anger over this general social situation. In September 1974 there was a strike wave in Helwan, an industrialized area south of Cairo. On January 1, 1975, thousands of workers, some of them participants in the Helwan strikes, battled police trying to prevent them from marching on the People's Assembly. In March 1975 a strike wave swept the textile industry in Mahalla el-Kubra in the industrial belt north of Cairo. August 1976 saw riots in some of Cairo's slums. In Damietta last summer a labor dispute erupted into assaults on govemment buildings and another strike wave. In September 1976, days after Sodat was "reelected" president, bus drivers went on strike in Cairo. In the countryside there have been increasing instances of peasant resistance to landlords and to overall social decay. These periodic explosions, while triggered by economic and social issues, have also represented responses, albeit undirected ones, to the politics of the Sadat regime. This was especially true this time. For side by side with the Egypt of the urban slums and impoverished countryside, there is another Egypt, that of the black marketeer, smuggler, banker, speculator, and bureaucrat, the Egypt that has now produced, according to official figures, 500 millionaires, the Egypt that has been created by the rule and orientation of the Sadat regime.
We are dying of hunger anyway. so kill us with yourbullets Sadot Sadat's "infitah" Since the beginning of 1974 Egyptian economic policy has been guided by the infitah, or "opening, " proclaimed by Sadat just after the October war of 1973. Fundamentally, infitah represented a new stage in the "de-Nasserization" of Egypt, a process actually initiated by Sadat in the spring of 1971, barely six months after the death of his predecessor. In early May of that year the first overt step was taken with the purge of the "left" Nasserite tendency led by Ali Sabry, one of the original members of Nasser's Free Officers organization. In the summer of 1972 Soviet military experts were expelled from Egypt in the opening move of a major political reorientation toward U.S. imperialism. During early 1973 Sodat began elaborating economic measures aimed at bolstering the private sector of the economy and took the first tentative steps toward undoing some of the nationalizations that had been carried out under Nasser. The aim of the Sodat policy - which was an economic and political unity - was to break out of the impasse to which the country had been led by the failure of Nasserism. Economically, Nasser's project of building an independent Egypt free of imperialist control hod failed. While the state sector of the economy was in crisis, the private sector was unable to take up the slack as a result of the fetters placed on it by Nasser's concessions to the mass movement and his commitment to the primacy of the state sector. Nasser's political and military alliance with Moscow had proven completely ineffective in liberating the Egyptian territory occupied by the Israeli army since the 1967 war. The economic and political impasse was matched by mounting social discontent, as Nasserism began to lose its ideological hold over the mass movement.
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EGYPT Sadat's response was to change direction, to shift to U.S. imperialism as the major ally with which to recover the lands occupied by Israel and to begin to open the Egyptian economy to western imperialist penetration, partly in order to cement the new political alliance and partly to lay the basis for an economic recovery based on the expansion of the private sector. It was necessary, however, to tread carefully. The social gains the masses had made under Nasser were real, and resistance to their eradication could be anticipated. At the same time, U.S. Imperialism remained unimpressed with Cairo's political turn in foreign policy and exerted no significant pressure on the Israelis to make concessions to Cario. More than a year of more or less openly pro-imperialist foreign policy - from July 1972 to autumn 1973 — produced no results. Concurrently, the economy, drifting in a twilight zone of partial de-Nasserization on the one hand and continuing restrictions on the private sector on the other, was veering toward catastrophe. The country, Sodat was later to say, stood on the brink of bankruptcy, without a "single piastre" of hard currency. The payments deficit on current account rose to EE261.3 million during 1973, an increase of more than 25% over 1972. Debt servicing and meeting credit obligations to suppliers accounted for 30% of foreign exchange earnings. The average annual growth rate of the gross national product was no higher than 3%, barely greater than the rate of population increase.
THRAN NAAFCO NEW YORK
Signboards in the Port Said free zone:
very few firms have set up shop The launching of the October war in 1973 represented a watershed in the turn away From Nasserism. Politically it was designed to force the hand of U.S. Imperialism and get the diplomatic situation off deod center. Economically it resulted in a massive infusion of aid from the Arab oil-producing countries (S730 million), whose revenues had themselves been increased manifold by the soaring of oil prices consequent to the war. Basking in the glow of the political success achieved in the war, Sadat moved quickly to capitalize on his surge of popularity and took major new steps in economic policy. It was then that the infitah was proclaimed. With it a series of measures were faken to lay the basis 6 for an expected boom to be fueled by expansion of the private sector:
*In February 1974 three decrees were issued creating various bodies to channel investment, guarantee private investment, and prevent nationalizations;
* "Free zones" were established along the Suez Canal where in all companies would be exempt from faxes and duties;
*Corporations newly investing in Egypt were granted five-to-eight year exemptions from taxes throughout the country and investment banks were exempted from currency controls.
*In June 1974 an investment law opened industry, metallurgy, banking, and insurance (all previously nationalized) to foreign ivestment. In addition, Egyption citizens were granted permission to become representatives of foreign firms. In July 1974 the government promulgated an economic crossing" plan (named after the crossing of the Suez Canal by Egyptian troops), which was in turn designed to lay the basis for a five-year development plan to run through 1980. This plan was intended to complete the overhauling of the Egyptian economy and make Egypt self-sufficient in all economic areas except capital requirements, which would be made up by foreign investment and grants and loans from the oil-producing Arab countries. The "economic crossing" plan was launched with great fanfare and was followed during 1775 by a further series of measures of "liberalization. " These have been summarized as follows: "On 28 July 1975 a new law abolished the public institutions which served as the apparatus of co-ordination and control in the context of the Five Year Plan. They are to be replaced by supreme councils for each sector, with no say in planning and no budgetary power, their role will be purely consultative. At the same time, the administrative councils of the public sector companies are being transformed by the inclusion of experts from the private sector. Autonomy is being granted to the different companies in the public sector, which will work out their projects, plans, and budgets without reference to any central, policy-orienting body. The Finance Minister, Ahmed Abu Ismail, spelf it out: The government is set on the open door policy. One of the first priorities has been to dissolve the public institutions and give individual economic units complete freedom to reform their administration and remove all obstacles and hindrances to the realization of this objective. Any unit failing to achieve these ends will be regarded as a burden and liquidated. * (Marie-Christine Aulas in New Left Review, No. 98, July-August 1976.) This project was later extended by permitting the sale of shares in public companies to individuals. The government explained that the intent of this "reform" was to give the workers a taste for the benefits of private property, but on a wage of £E12 a month not much is left over with which to buy stock portfolios. The 1974 and 1975 measures of "liberalization" were trumpeted in government-financed advertising campaigns designed to attract foreign capital, campaigns which
continue to this day. A sample: "Recognising the benefits that foreign investment can bring to the country, the Arab Republic of Egypt, the most populous country of the Arab World, is now welcoming foreign capital in a wide range of fields. Particularly sought are projects that bring an ability to ear foreign exchange by generating exports or encouraging tourism, which alleviate the need to import basic materials, or which provide technical expertise needed by the country. Foreign investment is allowed in a range of industrial, mining, energy, tourism, land reclamation, animal husbandry, and banking activities, and, for Arab investors, in housing construction and rehabilitation." This multipage government announcement, published in the November 1976 issue of the magazine African Development, among other places, waxes enthusiastic about the gains to be reaped by foreign capital: The new investment laws provide "the investor" with "Important incentives in several areas: tax exemptions, freedom from exchange control regulations under certain conditions, exemption from certain laws and regulations on worker participation and protection against unlawful nationalisation or expropriation of property, "The latter point is frankly singled out for special attention: "Recognising that Egypt's past record makes investors wary, the new foreign ins ment law provides guarantees against unlawful nationalisation or expropriation of investments. " Moreover, "Egypt has a surplus of employable labour. In these inflationary times, Egypt retains its significant wage-cost advantage over many other devloping countries. " To sum up: *With favourable prospects for political stability, with a renewed faith in a significant role for the private sector, and with plans for rapid economic growth, Egypt with its new incentives should be an appealing place for foreign investment.? Most of these appeals were (and are) centered on a grandiose project for the development of the Suez Canal area (site of the "free zones") and on construction of four entirely new cities in a ring about fifty kilometers from Cairo: the "Tenth of Ramadan" New Industrial City along the Cairo-Ismailia road; Sadat City to the north; King Khalid City to the south; and a fourth city on the Cairo-Suez rood. The second major aspect of the construction plans - administered, incidentally, by Osman Ahmed Osman, minister of reconstruction, owner of one of the largest contracting companies in the Arab world, and recently brother-inlaw of Anwar Sadat - is based on the enlargement of the Suez Canal to accommodate new giant oil tankers, the construction of three tunnels under the canal linking the Sinai to the east bank of the Nile, and the reconstruction of the cities of Port Said, Ismailia, and Suez, all destroyed during the 1967 Israeli war of aggression and evacuated until the signing of the second Sinal disengagement accord in September 1975. Such is the economic project of infitah. The old Nasserist dream of a modern anti-imperialist Egypt was replaced by the new, allegedly more "realistic" dream of a modern capitalist Egypt undergoing rapid industrial development based on an economic and political alliance with imperialist capital and a newly invigorated domestic bourgeoisie. The failure of Sadatism The failure of infitah, equally as patent as the failure of Nasserism, set the stage for the measures that touched off the January upheaval. There are five essential factors behind the economic crisis with which infitch has been unable to deal: the mounting balance of payments deficit, the rising trode deficit; the lack of investment capital and supplies, with a consequent crisis of industry, the decrepit state of the Egyptian infrastructure; and the stagnation of agriculture. Overall statistics for 1976 are not yet available (and, judging by the usual competence of the government bureaucrecy, they will not be published for some time). On the basis of information running through the end of 1975 and partial information for 1976, however, the following general picture of these five factors may be drawn: 1. Balance of payments deficit
*The payments deficit on current account for 1975 rose to nearly four times its 1973 level (and the 1973 level was itself considered catastrophic), while indebtedness more than doubled. "The difference in the situation, wrote Richard Johns in the June 28, 1976, Financial Times, was the availability of substantial aid from surplus Arab countries and, to a lesser extent, the U.S. However, after donating the best part of S3bn (i.e., $3,000 million) until the end of 1975 and lending more than S1bn. on concessionary terms, the oil producers have made if clear that there are limits to the amount of money which they are prepared unconditionally to pour into what has come to look more and more like an insatiable sink, " The major sources of the ever-increasing deficit are military spending and loans, debt servicing on previous loans, both military and civilian, and the subsidies for basic products, estimated at EE1,000 million for 1976. (The military debt is supposed to be secret, but virtually all estimates place it at something like S7, 000 million.) The only bright spot in the 1975 balance of payments picture was the positive performance in services, a result of the combination of tourism and remittances by Egyptians working outside the country. The major source to which the Egyptian government has turned in its efforts to keep afloat is the Gulf Development Fund, the contributors to which are Saudi Arabia, Kuwait, the United Arab Emirates, and Qatar, In late 1975 Sodat requested between $3, 000 million and $4,000 million in development aid for the fiscal years 1976 and 1977, but the request was subsequently raised to $10,000 million to $12,000 million for the years of the 1976-80 development plan. In the heat of the 1975 euphoria over infitah the government approved a series of projects before having amassed the funds with which to implement them. The result was that short-term loans (with interest rates of up to 22%) had to be taken. The euphoria, if not the propaganda, having cooled, a new policy was set: Find the money first, then approve the
7
EGYPT project. Government estimates for the 1976-80 plan call for $20, 000 million, of which $8, 000 million is slatid to be raised from foreign governments and international imperialist financial institutions. The gulf countries were asked to make up the rest. In the end, the Gulf Development Fund agreed to come up with only $2,000 million; moreover, an agreement signed in late 1976 failed even to cover the expected balance of payments deficit for 1976, EE506 million. In short, there is no prospect for resolution of the balance of payments crisis. The Financial Times commented: "During the 1976-80 period there should be substantially increased investment with plenty of project aid in the pipeline (although precious little foreign investment in sight). Egypt will profit by greater earnings from the Suez Canal, receipts from tourism, and remittances from nationals working abroad. But discipline and austerity, involving fairly drastic cuts in consumption, will have to be the order of the day for af least another Five years if the ground is to be laid for a lasting recovery and soundly-based growth in the future. " (June 28, 1976, emphasis odded.) 2. The trade deficit
The leading journal of British finance capital offered similar advice as regards the trade gap: "Egypt is currently experiencing its most severe trade deficit ever, and one which shows every prospect of further deterioration unless strong curbs on consumption are successfully applied. " Total exports for 1975 were about EE550 million, while imports exceeded EEl, 500 million, for a deficit of EE950 million. Primary exports declined almost EE100 million in 1975 compared with 1974, The cost of intermediary commodity imports doubled over the same period, reaching EE619 million in 1975. Industrial imports rose from EE213 million in 1974 to EE286.4 million in 1975, while industrial exports rose from EE226.1 million to EE230.8 million, transforming a surplus into a deficit. This situation is expected to worsen for 1976, since export levels should be about the same as for 1975 while imports are expected to increase by EE353 million. 3. Lack of investment and underutilization
Underutilization has been a chronic structural problem of the Egyptian economy. The low point came in 1973, when unused industrial capacity reached 35% overal! and as much as 60%% in some cases. Since the expenditure of EE 230 million allocated under the 1974-75 transitional plan, the situation has improved somewhat, but it remains unfavorable. The industrial sector accounted for only 20% of GNP in 1975, below government targets. Shortages of supplies resulting either from currency shortages or perturbations of the world market have inhibited production even in some "mode!" factories, The Helwan iron and steel works, built by the Soviet Union, produced only half its quota in 1975. Partly because of the industrial crisis, Egyptian capitalists prefer to invest in real estate and construction. As a result, in spite of the measures taken to stimulate the private sector, as of 1975 private industrial production continued to make up only one-fourth of total value, as has been the case for years. 8
4. Infrastructure
The Egyptian infrastructure is notoriously rickety and represents one of the major factors keeping foreign investment to a minimum despite the government's strenuous efforts to aftract it. The city of Cairo itself provides the most striking examples. Multinational corporations which have established offices there have had to wait months before getting telephones installed, and then only after sheiling out thousands of dollars in bribes to government officials. Moreover, installa-
tion of telephone service is only the first problem. There is no guarantee that an installed telephone will function. Reports in various newspapers toward the end of 1976 indicated that many corporations that had moved their offices from Beirut to Cairo because of the Lebanese civil war were longing to return, for telephone service in Beirut at the height of the war was superior to telephone service in Cairo at peace. The lack of an infrastructure has also been a major impediment to implementation of the regime's much trumpeted Suez Canal development projects. Corporations that quickly applied for space in the "free zone" of Suez City were dismayed to learn that there was no telex service between Suez and Cairo, let alone between Suez and the rest of the world. The result is reflected in a comparison of the number of projects approved and the number of companies that actually paid rent in the sectors of cold storage, general warehousing, and industrial projects in the free zones: 232 projects had been approved by late 1976, but only 55 of them had actually been begun. 5. Agriculture
A total of 57% of the Egyptian population lives off agriculture, in which 47% of the work force is employed. If accounts for 31% of the GNP and about 50% of export earnings (20% of total export earnings are generated by sales of cotton). In 1975 the agricultural balance moved into a deficif for the first time, total exports standing at EE275.1 million and imports exceeding EE440 million. Rice, the country's second biggest agricultural export earner, brought in 40% less in 1975 than in 1974, largely because of lower exportable surpluses caused by increased domestic consumption. (Is it a coincidence that the rice subsidy was one of those lifted on January 172) Thus, agriculture, a mainstay of the economy, has become an economic burden instood of an exchange camer. Production is increasing at about 2% a year, less than the rate of population In sum, the policy of infitah has failed to solve anv of the basic problems of the Egyptian economy, mosi which have actually worsened dramatically during the past several years. This is, after all, not surprising. "For a long time, " Ahmed el-Ghandour, deputy minister of the economy, told Andrew Lycett of African Development, "the Egyptian economy has not been integrated into the Western developed economy -This has had bad effects on the performance of our economy. It has been deprived of three crucial things - of the use of Western technology on a large scale, of foreign capital to add to our national savings, and of the opportunity to become efficient and mobilize our labour resources. All our fiscal and monetary policies should now be directed towards ends that serve the integration of the Egyptian with the international economy. " Which means integration with the crisis of the intemational capitalist economy. All Egypt's structural economic problems are exacerbated by this general capitalist crisis, which leads to one basic fact: To achieve even an easing of its short-term economic problems, the Egyptian rulers must intensify their aftacks on consumption and on the social and economic positions of the workers, peasants, and urban petty bourgeoisie. Given the already disastrous condition of these layers, such a policy would call forth resistance in any event. But the intensity of the resistance is bolstered by the fact, clearly observable to the masses, that while the infitah has failed to resolve the economic crisis, it has paved the way for the enrichment of the bourgeoisie and the bourgeoisification of a thin layer of the upper petty bourgeoisie. The process is most evident in the case of the former, who directly benefit from the "liberalization. " The latter, however, are also taking advantage of the maneuvering room opened up by the gradual liquidation of Nasserist structures, In many cases, primitive accumulation takes the form of capitalizing on speculation and graft, phenomena which existed abundantly under Nasser but which had no easy outlet through which to be transformed into capital accumulation. The top-ranking bureaucrat who yesterday piled up thousands of pounds worth of bribes is now able to use this bribe money to buy shares of denationalized companies. When those shares become significant enough to generate an income, he ceases to be a bureaucrat and becomes a speculator, smuggler, or capitalist. In a number of cases, elements of the upper petty bourgeoisie have been able to enrich themselves by offering services to needy officials of multinational corporations. A not uncommon instance was reported in the western press several months ago. A high-ranking government bureaucrat moved his family out of their furnished apartment in a middle-class district in Cairo. The rent was S45 a month. After installing his family in a cheap dormitory, the bureaucrat sublet the apartment to the vice-president of an American corporation who had been unable to find suitable housing. The cost to the American executive was $1, 000 a month, paid for by his company naturally. After collecting the thousand dollars rent for several months, the bureaucrat made a trip to Lebanon, where he engaged in some lucrative transactions, doubling his money, which was then reinvested to make a second trip. By that time he had accumulated enough to plunge into the Cairo real estate boom, quit his government job, and move his family back into an apartment in a better neighborhood. It is this sort of process — conducted on a vastly broader scale - that has produced Egypt's 500 millionaires. It is an illustration of a cardinal lesson of Marxist theory: So long as the state remains bourgeois, nationalizations, no matter how apparently sweeping, represent, in the long run, merely state contributions to the development of particular sectors and to the stimulation of the creation of wealth that may later be resold at the stroke of a pen to private owners. Under a bourgeois state, even nationalized means of production and distribution are ultimately instruments for the enrichment of a bourgeois class. Nasserism, with its combination of nationalist demagogy and genuine concessions to the masses, effectively masked this basic truth for many years. Sadat's infitah has dropped the veils. The continuing impoverishment of the masses is now openly
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EGYPT combined with the enrichment of the few - and this is in turn combined with an openly pro-imperialist foreign policy. This linkage of combinations has given the mass movement a new combativity and heightened explosive character. The goverment's political response On January 22 the curfew was lifted in Cairo, although paratroopers continued to patrol the central squares. But having been forced to concede on the issue of the price increases, Sadat still faced both the economic squeeze that had given rise to the explosion in the First place and the political problem of how to respond to the moss upsurge. In the economic realm, he issued a desperate plea to the United States and the oil-producing Arab countries. Beginning on January 21 el-Ahram began a thinly veiled atfack on the gulf countries, suggesting that they were much freer with advice than cash. A pageone headline in the January 21 el-Ahram over an article quoting press reaction to the upsurge in various Arab newspapers read, "Egypt Has Hod Enough of Moral
" The January 24 el-Ahram contained a lengthy report of Sadat's decisions after consultation with various government leoders. He promised "to halt the economic project relating to price increases in order not to provide opportunities for saboteurs" and to "find new sources and means of supply through a comprehensive plan of economic reform. * No specific measures were mentioned, save that there would be no price increases and that the military budget would not be reduced. In essence, the message was a threat to international imperialism and the oil-producing countries whose advice had brought the regime to a state of acute crisis. It is impossible, Sodat said in effect, to order price increases; at the same time, the country stands in need of $2, 500 million immediately. The message seems to have been heeded. Sheikh Thani, minister of finance of Qatar, one of the major contributions to the Gulf Development Fund, arrived in Cairo on January 24 to discuss terms. On February 1 reports from Cairo indicated that the IMF had reached an ogreement to loan Egypt S140 million, with an additional $450 million over the next three years. In exchange, Sadat reportedly promised to carry out "economic stabilization, "although no specific measures were cited. It was considered doubtful that Sadat would be able to meet the IMF's requirements, but it would be significant If the loan went through anyway. "It will mean, " commented the February 7 News-
"that Egypt's Western creditors are willing to sacrifice economic principles and sound money practices in order to maintain the political stability of the Egyptian regime." In other words, a temporary measure has been arrived at whereby the economic crisis will be allowed to deepen while attacks on the standard of living of the masses will be introduced more gradually and less provocatively. But maintaining the political stability of the Egyptian regime will take more than money. This was evident in the manner in which the regime moved to repressive 10 measures. The government immediately launched a campaign denouncing "communist saboteurs" as responsible for the popular explosion. Particularly singled out were four organizations, members of which were arrested in raids on January 19 and 20: the Egyptian Communist party, which is underground; the Egyptian Communist Workers party; the Revolutionary Current; and the January 8 Movement. The January 21 el-Ahram purported to present proof that the Egyptian Communist Workers party was the central force behind the entire affair. It published photostats of leaflets said to have been confiscated in raids on the apartments of two students, Yahya Mahbrouk Shoubashi and Mo'az Rmeih, two alleged members of the organization. El-Ahram charged that this group, a centrist split from the CP, had spawned a plot to "bum Cairo. " The published leaflets, however, had nothing to do with terrorism, but were instead denunciations of the policy of the Egyptian state, particularly of its alliance with imperialism and its policies within the Arab world; this included denunciations of the role of the Syrian dominated "Arab dissuasion force" in Lebanon, The leaflets were apparently distributed during the demonstrations of January 18 and 19. The Egyptian Communist Workers party, as well as the Revolutionary Current, another left split from the CP, are representative of a phenomenon that has been developing slowly but steadily mainly in the Egyptian student movement during the past several years: The genesis of leftist groups which, although politically confused and often attracted to varieties of Maoism or centrism, have rejected Nasserism while simultaneously opposing the rightward evolution of the Egyptian ruling class. The sweeping arrests in university and intellectual milieus carried out January 18-22 were clearly aimed at crushing these organizations, all of which seem to have been relatively well prepared to intervene in the popular mobilizations. But the far left was not the government's sole target. Also attacked were the members of the Progressive Unionist Rally, the legal leftist party headed by Khalid Mohieddine. The PUR is a product of the Tomat hote political liberalization which has accompanied the infitah. Lost year Sadat authorized the formation of three "tribunes" within the Arab Socialist Union, the sole legal political party since the Nasser era. Members of the three tribunes - "left, right, and center" -as well as independents, were allowed to contest the seats in the People's Assembly during elections held last October, After the elections, Sadat declared that the three "tribunes" were henceforth "independent parties" and that Egypt had embarked on the path of retum to multiparty democracy. Sadat's democratic claims were undoubtedly false. But it would nonetheless be a mistake to regard the new "multipartyism" as a pure and simple demagogic maneuver. The elections were surely rigged - not least in that the press, which remains under the control of the ASU, unanimously supported Sodat's "center tribune, " which proceeded to win the lion's share of the seats in the Assembly. But according to all reports, the elections did open up a genuine political debate in which the opposition was allowed, for the first time in
more than twenty years, to hold open and legal mass meetings during a tumultuous campaign. Some opposition candidates, as well as some "independents, "were elected to the Assembly. In reality, the political operation that gave rise to the three parties is but a reflection of the economic policy of the infitah. There is no reason to doubt that Sadat's overall program genuinely aims at the construction of a moder bourgeois Egypt. The attraction of foreign capital and the stimulation of domestic private capital require the dissolution, even if gradually, of the Nasserist bureaucracy. This in furn requires the establishment of alternative structures of political domination - on the one hand organizations through which the developing bourgeoisie can express itself and on the other hand "leftist" formations that can channel and control the mass movement and at the same time serve as safety valves for opposition to government policy. The extremely delicate process of transition has placed the regime in a quandry. On the one side, the legal left must be sufficiently threatened so that it refuses to link up with the mass movement in any active way. On the other hand, suppressing the legal left outright would deprive the regime of an ally it will increasingly need in the future. Hence, on the one hand Sadat accused the PUR of sharing responsibility for the riots along with the "communist saboteurs. " According to PUR sources, 108 of its members were arrested in the days immediately following the demonstations. Among these were a considerable number of leoders, including, for example, Muhammed Mustafa Bakri, the PUR's major trade-union figure. On the other hand, the PUR was allowed to openly answer the government's attacks - provided that the answers also contained suitable denunciations of the "violent demonstrators. " Thus, Khalid Mohieddine, in a statement published in the government-controlled press, said: "The masses perhaps expressed a sentiment identical to that of our party, but it was not our party that incited them to do so. If the same slogans were raised throughout the country it was because the problem, which is political, is the same everywhere. " Further, he acknowledged that "some members" of the PUR had participated in the demonstrations, although he denounced the violence of From the government side, Sadat stressed that there was no question of returning to Nasserite single-partyism. An eight-column headline printed in red on the front page of the January 24 el-Ahram quoted Sadat: "We Will Not Renounce Liberty; No Return to a Single Outlook. " The campaign for the extension of Sadat's version of "democracy" proceeded simultaneously with the denunciation of the "communist saboteurs. " The report that contained Sadat's pledge not to raise prices likewise contained professions of faith in democratic evolution reminiscent in tone to those of Suárez in Spain: "The new democratic experiment must not be altered by events fomented by bad elements seeking to retum the country to a state of single outlook. "El-Ahram commented: "The president invited the parties to remain vigilant and to be prepared to root out the few elements who do not believe in this just democratization and in peace, in order that they not fall into mistakes that would lead them to repeat the errors of the parties before the revolution" (that is, before 1952). And el-Ahram concluded its report of Sadat's decisions this way: "Finally, for the good and safeguarding of democracy, and placing all faith in freedom of opinion, this opinion and this liberty must be exercised through the channels of legality." The government's political strategy, then, is twofold: harsh repression and witch-hunting of the far-left elements who could potentially express the determination of the masses to fight the bourgeoisie actively; a combined toctic of selective repression and integration of the legal left, which is to serve as channel and safety valve in the future. The application of this strategy will not be easy, for the tightrope that must be walked is thin. The correspondent of the Guardian, David Hirst, made this observation: . . . there is no doubt that a great political awakening is rapidly gaining momentum in Egypt and that Sadat must either permit it to go forward or revert to repression of a scale and severity that he cannot possibly sustain for long. Hand in hand with the demand for a better life - or rather for the basic necessities of existence - goes the demand for democracy and self-expression. It is the absence of true democracy which has caused people to take to the streets in the past two days - they have no other way of expressing their pent-up emotions. " This great political awakening, he odded, is stirring in some dangerous places: "The trade-union movement, for example, is still officially under the control of leaders who depend more on their loyalty to the system than on the support of the workers. But their position is being undermined by radicals from within. At a trade union conference early this month (January) the radicals secured a condemnation of the 'infitah of exploiters and smugglers' and the endorsement of a demand to raise the minimum wage from twelve to twenty pounds a month. The prospect, then, is one of permanent economic crisis and political upheaval. If Nasserism strikingly confirmed the inability of the most radical bourgeois nationalism to resolve the tasks that are historically those of the bourgeois-democratic revolution, Sadatism, a logical outgrowth of the failure of Nasserism and in that sense simultaneously its extension and negation, confirms the inability of the bourgeoisie of the semi-colonial countries to carry out those same tasks through the deliberate stimulation of "classical" capitalism. Sodat's break with Nasserist economic and social policy is as irreversible as his turn toward imperialism in the realm of foreign policy. He has no alternative but to press ahead, and the only result will be further discrediting of his overall project. A new period is thus opening in the history of Egypt, home of more than half the entire Arab working class, a period that will pose new problems and present new opportunities to the workers movement, as the center of gravity of the Arab revolution shifts back to its logical heartland, Egypt. February 3, 1977
11
Shirley Williams, minister of education in the Callaghan cabinet, is one of the major representatives of the Labour right in Britain. On January 21 she delivered a speech entirely devoted to an attack on Trotskyism, a front poge as well as close to a full page inside. Obviously, this is no accident. Shirley Williams's speech, like the press campaign of the bourgeoisie, is part of systematic preparation for a witch-hunt ogainst the entire far left within the Labour party. This campaign is itself the extension of a similar campaign launched a few years ago against the most combative layer of rank-and-file militants in the unions. Socialism or democracy? In her speech, Williams tried to bring together the major arguments with which to justify in the eyes of the average British worker a declaration of incompatibility between membership in the Labour party and the revolutionary socialist convictions of the majority of the far-left militants of this party. She thus deliberately abandoned the field of organizational and odministrative quibbling ("entryism," "party within the party, " "outside manipulation, *and even the claim, as ridiculous as it is odious, that the Trotskyists are "Financed from abroad"), which has been the preferred terrain of most of the bureaucrats of the Labour executive. She at least has the merit of placing herself on the field of ideas, of the problems of principle, tactics, and strategy of the socialist movement. This enables us to better grasp the ideological coherence and incoherence of Social Democracy today. Williams's main argument for the expulsion of the Trotskyists from the Labour party is the alleged contempt for democracy of Marxists in general and Trotskyists in particular. This is also the argument that was joyfully taken up by the bourgeois press to support the campaign for the witch-hunt within the Labour party. It is thus that she prepares the way for state repression against a wing of the workers movement - all the better to 12