History, subordination weigh heavily on unfinished Arab Spring

As exhilarating as it was for the people in Tahrir Square to have forced out Hosni Mubarak, that was the easy part. Dismantling a dictatorial system is much more difficult than seeing off a particular dictator.

This is the reality that Egyptians, and participants in other countries comprising the Arab Spring, continue to face. The dictator does not sit suspended above all of society, but rather rules with the support of a social base. Not rarely the dictator, when in the global South, is supported (and even reliant on) an imperial power with its own agenda. The United States government, whether the occupant of the White House is a Republican or a Democrat, has kept dictators in power throughout the world — the U.S. has militarily intervened in Latin America or the Caribbean 96 times, including 48 times during the 20th century. That total doesn’t include coups fomented by the U.S., such as Guatemala in 1954 and Chile in 1973.

Tahrir Square photo by Jonathan Rashad

Tahrir Square photo by Jonathan Rashad

The leading powers of capitalism were quite comfortable with the pre-Arab Spring status quo and, most notably in the case of the U.S. government, did little to discourage the idea that they’d prefer to keep things as they had been. But this is not to suggest that internal factors should be ignored. The same judges appointed by former President Mubarak preside; the Army continues to impose its will in the judicial and economic spheres; and the Muslim Brotherhood seems comfortable stepping into the shoes of the former régime. The economy continues to not function but the priority among Egypt’s elites is to jockey for power.

The military was the crucial social force on which the dictatorship of Anwar Sadat and Hosni Mubarak rested and, having accumulated significant economic interests to go along with their powers of coercion, is not inclined to loosen its grip. This source of power survived the removal of President Mubarak intact — augmented by the continuance on the bench of the Mubarak-era judges, the pillars of the dictator’s system remain in place. And although the Muslim Brotherhood would likely prefer the power of the military and the judiciary trimmed, it nonetheless appears content to simply place itself at the apex of this system and govern, to the ability it is able, with its own heavy hand.

The imperial powers, needless to say, are not eager for too much democracy in the Arab world, lest their ability to keep their grip on the region’s oil supplies loosen. But the greed of Western oil majors sometimes can backfire. A June 2 article in The New York Times reported that China is reaping the benefits of increased Iraqi oil production, buying half of Iraq’s oil and seeking more. The U.S. failed to gain complete control of Iraq’s oil as it had intended, and the measure of relative independence shown by the Iraqi government resulted in Baghdad setting tougher contract terms than Western oil companies would prefer.

The result, according to the Times, is that Chinese companies have accepted the lower profits resulting from the stricter Iraqi terms, content to secure needed supplies rather than maximize profits. Of course, although oil was a factor in the invasions of Iraq by the Bush I and Bush II/Cheney administrations, bringing Iraq (and, ultimately, the rest of the region) firmly into the U.S. orbit and forcing them open to unfettered penetration by multi-national corporations was a paramount goal. Naturally, this was to have been on a subordinate basis. There is a long history here, starting with the British crushing of Egypt’s attempt to industrialize in the 19th century.

First by military means, then by financial means

Although still formally a part of the Ottoman Empire, Egypt gained considerable autonomy after an Ottoman military commander, Muhammad Ali Pasha, became the ruler of Egypt following the departure of French forces under Napoleon Bonaparte. The new Egyptian leader, after securing power through a massacre of a rival group, embarked on a policy of industrialization and commodity agriculture to facilitate his a goal of Egyptian independence.

Cultivated lands were expanded and crops were grown specifically for export, most importantly cotton. The new strain of cotton he ordered planted was to be the cash crop used to finance Egypt’s economic rise. Lowell Lewis, an agricultural scientist, summarized this process:

“Since British textile manufacturers were willing to pay good money for such cotton, Ali ordered the majority of Egyptian peasants to cultivate cotton at the exclusion of all other crops. At harvest time, Ali bought the entire crop himself, which he then sold at a mark-up to textile manufacturers. In this way, he turned the whole of Egypt’s cotton production into his personal monopoly.”

Had Muhammad Ali been content to be a supplier of a raw material (in this case, cotton), he likely would not have incurred the wrath of the British. But he also was committed to industrial development. Factories in several industries were set up, including textile, and foreign trade monopolies were established. To stop the flood of British textiles imported into Egypt, embargoes were put in place. Britain did not want this competition, ultimately crushing the rise of Egypt through a mix of military and financial means.

Egypt’s ambitious ruler, despite being a viceroy for a province of the Ottoman Empire, built a large army that was used in a series of invasions, expanding his areas of control from Sudan to Syria. Britain had adopted a policy of propping up the Ottoman Empire; a weak but intact empire would suit Britain’s strategic and commercial interests. When Muhammad Ali’s army approached Istanbul, the Ottoman capital, several European powers came to the aid of the Ottomans, handing Egypt’s ruler a decisive defeat. In 1841, he was forced to sign a treaty specifying that Egypt would adhere to “free trade” policies, ending his monopolies and allowing Egypt to be flooded with cheap British imports, decimating Egyptian industry.

Egypt’s peasants had borne much hardship under the pre-1841 policies; they would now suffer more under heavy burdens of debt and taxation, while elite landowners who came to own most of Egypt’s farmlands were taxed at a small fraction of the peasants’ rate. Muhammad Ali had handed much of the elites’ land to them, and his successors continued to oversee a consolidation of land.

That was one component of the 19th century version of neoliberalism, although the term had not yet been coined. Another component was the debt that ensnared Egypt. Muhammad Ali’s grandson, Ismail, sought to modernize Egypt along European lines during his reign in the 1860s and 1870s. But the country went deep into debt to finance this program. Egypt could not even pay the interest, let alone the principal. Rather than risk a repudiation of the debt, the German and French governments forced Ismail to appoint British and French commissioners to oversee Egyptian finances to guarantee that the debt was paid.

As an example, in 1873, the Egyptian government accepted a loan with a face value of £32 million but received only £9 million because of conditions placed on the loan by the lenders — yet had to repay the full face value. Reduced to an exporter of raw materials as the British had intended, and thus overly dependent on volatile cotton prices, by 1877 more than 60 percent of all Egyptian revenue went to service the national debt. Within another five years, Britain’s direct occupation of Egypt had begun.

The players change, but the game does not

Following World War I, Britain maintained tight control of Egypt’s cotton exports, which accounted for 90 percent of Egypt’s exports. Even after Egypt gained independence after World War II, imperialist intrigue did not end. The British and French governments, in collusion with Israel, invaded Egypt in an attempt to seize the Suez Canal and overthrow Egyptian leader Gamal Abdel Nasser. A series of diplomatic maneuvers had led President Nasser to nationalize the Egyptian company that operated the canal, with payments to shareholders at full market prices.

Following British and French withdrawal in the face of international opposition to the invasion, including by U.S. President Dwight Eisenhower, President Nasser proceeded to nationalize British and French assets. He also embarked on plans to industrialize the country and redistributed land. But a decisive loss in the 1967 war with Israel, by then strongly backed by the U.S., undermined the president and weakened the economy. Anwar Sadat became president in 1970, and was rewarded for his re-aligning the country toward the U.S. from the Soviet Union with heavy aid.

Since then, Egypt has been dependent on U.S. aid and, in turn, the country was ruled almost continuously under emergency laws until the fall of Hosni Mubarak. The U.S. provided $1.47 billion in foreign aid to Egypt in 2011, $1.3 billion of which was military assistance. U.S. military-assistance programs have the goal of inducing recipients to align their policies with U.S. wishes, and much of it is specifically earmarked for the recipient to buy arms from U.S. companies. Thus recipient militaries are able to buy materiel that wouldn’t otherwise be able to, and U.S. arms manufacturers’ profits are subsidized.

The size of the military’s share of Egypt’s economy remains a subject of considerable controversy but, whatever the figure, is substantial. The last years of the Mubarak era saw a decisive turn to neoliberal prescriptions; although the military might have seen privatization schemes as a threat to its commercial interests, the post-Mubarak military command, which appears to possess decisive political power even after the ascension of Mohamed Morsi to the presidency, reached a tentative agreement (not yet ratified) with the International Monetary Fund, attached to the usual austerity conditions.

The Egyptian military has expanded into shipbuilding, railroad cars, real estate development, heavy equipment leasing and military materiel. It also is a part owner of companies in a variety of other industries, including computers and oil and gas pipelines.

The military and the Muslim Brotherhood are rivals for power, but whatever the differences between them, they have mutual interests in maintaining the status quo. The judiciary is another pillar of the old régime, and has flexed its muscles by issuing a series of rulings undermining the establishment of new institutions.

A United Nations report issued last month reports that more than 40 percent of Egypt’s population lives below the country’s poverty line of $2 per day, while two percent of the country’s population controls 98 percent of the economy; poverty, inflation and unemployment are steadily rising. A law passed by the military bans strikes, sit-ins and protests, and fewer Egyptians have access to health care because it is increasingly privatized. Meanwhile, Egypt’s Muslin Brotherhood-appointed prime minister announced this week that “there are no differences” between he and the International Monetary Fund concerning austerity measures the IMF is demanding in return for providing a loan.

Egypt’s generals want U.S. money and the Brotherhood promotes Turkey’s neoliberal Justice and Development Party as model. The military, the Brotherhood and the remnants of the Mubarak régime are the only institutions remaining, and the U.S. government can’t be displeased about that. It destroyed all Left entities that posed any threat, refusing to tolerate even nationalistic leaders whose “socialism” was limited to rhetoric, such as Gamal Abdel Nasser. Doing so was in the tradition of the previous leading capitalist power, Britain.

The inability of the Arab Spring, thus far, to bring about any meaningful reform, let alone revolutionary change, is inseparable from the region’s history and continued subordinate status in the world capitalist system.