By Golia, Maria
The Middle East , No. 377
THE JANUARY DECISION to redraw 34 articles of law are intended to "rid Egypt of its socialist principles" and "create a more favourable atmosphere for foreign investment", according to President Hosni Mubarak. Egypt is in the midst of major constitutional reform, but not everyone welcomes the moves for the country, which is still shrugging off the 40-year-old legacy of Gamal Abdel Nasser.
The ruling National Democratic Party (NDP) credits itself with initiating Egypt's transition to an open market in the mid-1990s, and the constitutional revisions are meant to reflect an existing economic reality. But critics believe that the proposed amendments will favour business tycoons--including members of the ruling party elite--at the expense of social justice.
When Egypt's economic reform programme was first launched, enthusiasm ran high. The London Financial Times dubbed Egypt 'the tiger on the Nile' in reference to Asian countries that had successfully taken the global market plunge. The private sector was empowered, bureaucracy trimmed, and foreign investments increased. More multi-national corporations set up shop at a decent profit, while big domestic businesses expanded and diversified. Egypt's large workforce, its trade agreement access to European, Arab and African markets, along with its apparent willingness to liberalise were seen as signs that prosperity was around the corner.
Reversing a half century of socialist policies, however, especially the state's highly centralised economic control, has proved no easy task. Nasser's nationalisation policies have had far-reaching effects; including a brain drain from which the country is still recovering, due to the fact that dispossessed factory owners, managers and other professionals saw fit to leave the country. Likewise, under state control, Egyptian industry has suffered through a lack of proper management and the absence of competition.
Another Nasser era tenet--that of guaranteeing jobs for high-school and college graduates--bloated Egypt's bureaucracy while still falling dramatically short of supplying sufficient employment. By 1981, job applicants had already outnumbered government positions by five to one.
Empowering the private sector, which today accounts for around 70% of Egypt's GDP, was less a matter of forward-thinking economics than an act of survival on behalf of a government in need of creating jobs and generating finance. But while amending the constitution suggests that Egypt has outgrown its socialist past, the changes may be largely rhetorical. The real issue is one of power, and the NDP's reluctance towards letting go is perhaps most apparent in its treatment of workers. Trade unions have long been co-opted by the state, effectively denying proper workers' representation in negotiations regarding their welfare. Strikes, while technically legal, are in fact prohibited not only by Egypt's Emergency Law, but by an authoritarian government that may use force to disperse them.
The parliamentary debates surrounding the current constitutional revisions have steered mostly clear of labour-related issues. A handful of independent members of parliament have nevertheless argued that Egypt's bid for a competitive open market will falter in the absence of workers' rights, especially the right to strike. In the words of one MP, "You can't do it halfway--but you can't do it all of a sudden either". This ambivalence may be costly, since workers' productivity under current conditions is far from optimal. Moreover, economic reform has yet to deliver on its promise of a higher standard of living for average citizens.
Fifteen years after the reform began, inflation and unemployment remain high, and salaries cannot compete with the rising cost of living. In the last several years the cost of basic commodities and services has increased by an estimated 160%. A kilo of meat sells for LE35, but factory workers earn only around LE400 ($88) per month). …