Monday, February 28, 2011

Economic Purview of the New Egypt

Egypt After the January 25th Revolution: Speculum Doc. 1821
Politics and Economy in an Uncertain Field Feb.12, 2011

1. The eighteen days of continual protest involving about 1 million Egyptians, proved successful when President Hosni Mubarak resigned, on February 10th.
His successor, Ahmed Shafiq, resigned on March 2. Now the arena becomes quiet with suspense. Who's sleeping with whom intellectually is already coming to light. Anyone hoping to put together a political party has less than 6 months to do so.

2. The Egyptians all want freedom, and believe they got it with the resignation of a few officials. Democrats in Cairo are jockeying for power. Strange bedfellows, like the Muslim Brotherhood sleeping with M. al Baradei, indicates not some middle ground worked out in discussions, but a glossing over of core ideological divergences.

3. All through history it seems that the politics of symbolic appeal (or 'identity') trump the actual needs and aspirations of a populace. A group or nation might quickly blame and even attack another, often a neighbor, often the precise one who could offer the most help. In modern times, with its acceleration, one look at almost any nation and see therein a clash of ideas and men: not just the left/right divide but deeper - the emotional mind that responds to symbols, as opposed to the simple awareness of what folks need.

4. The Egyptians have matured, opened, many educated in the West. They've had a long time to observe the Muslim Brotherhood, and the Army's corporate pretensions, the bankruptcy of the socialists, and the Washington Consensus. Now they deserve to just focus on reality – objective needs, and the inner synergies. We will look at some of those. We'll assume that those masterful political abilities behind the revolution, now carry over into the post-revolutionary period.

5. So we will follow their own bid to be competent rather than dreamy. Will factions now integrate with other factions? Should they form a a single national party, to be a tent for many other smaller groups. And will they focus on the environmental and economic realities, seeking possible prescriptions?

6.The IMF and West, following the Washington consensus, must link up with NGOs, government and Islamic networks to deploy needed food, clean water and give Egypt's poor a chance to see a doctor.

7. Before 1952, Egypt was a feudal state. Six per cent of the people owned 68% of the fertile land. Debt bondage made slaves of many families, whole towns. The British shared rule with the last Mameluke king, Farouk. And some Egyptians look back at the last royal age of Fuad and Farouk, as a golden age of democracy.

8. The main party was the old Wafd, the party of aristocrats, of English educated government employees and students of the fine literature. The Wafd were charming old democrats, and the Egyptians loved them. The Free Officers, taking charge on July 23, 1952, were a quick sharp contrast.

9. The Euro-American texts say Gamal Abdul Nasser banned all political parties in order to turn Egypt into a military state, but he moved on the Wafd. Those gentlemen were such a corrupt bunch, just puppets to the wealthy, who usually were not Egyptians.

10. Nasser had no intention to move against them. He made sure General Naguib (Naqib) was prime minister then president. Naguib was an avuncular war hero who was tied in with Wafd leadership. Even Nasser was fooled for two years.

11. Nasser had his early experience in the army while serving with the British in Khartoum, Sudan. He knew all about the Mahdi and the mass slaughter at Omdurman. Nasser was not one of the Free Officers who worked clandestinely for the German Nazis during WWII. The army he would come to lead had definite scruples, a kind of discipline, a stiff upper lip. But it had no real equipment.

12. The English kept 80,000 soldiers camped in the desert along the Suez Canal. The canal was vital because it cut a month off the sailing time of many ships. Britain was still getting most of its oil from Iran. The Muslim Brotherhood and other fedayeen mounted night raids on British positions. Nasser put a stop to that in 1953. He would negotiate the departure of the British.

13. Today we would recommend land reform, since the gap between the rich and poor was way too wide and because feudalism is not compatible with democratic theory and practice. But back then, in America, land reform was seen as communism pure and simple. That was a stupid error. A clutch of unseen wars have broken out because obvious land reform was not carried through (e.g. India, Nicaragua, Algeria, Pakistan, Afghanistan, Turkmenistan.)

14. Nasser's land reform strategy was rather ingenious. He limited farms to 200 hectares, 300 for a family. The government would pay the landlords a fair price, while asking them to establish construction businesses, in and around the cities. It was a desperate bid to build enough houses for Egypt's swelling population. Nasser could see the plight of his people accurately.

15. Egyptians can be pro and anti army. Back in 1952, it was the only instrument available. After peace with Israel was signed, the army 're-deployed' to the Mediterranean and Red Sea coasts, as they say. In other words, the army is fully invested in the tourist industry, sharing the same kind of resorts as the tourist stay in. The army has much experience building luxury villas and lush apartment complexes, resorts, special hospitals, and so the army can certainly help auto-construction projects. They have much experience cornering markets, so they should be straight players at last.

16. It is too late for re-tooling heavy industry, and I hope no American suggests that the standard IMF / Washington 'Consensus' should be applied to Egypt again. Any 'cure' that starves a fourth of the population, fails to build more homes, creates far too few jobs, and makes just a few wealthy – obviously such a remedy is not appropriate. Though I am not a Muslim, I know Arabic and studied its laws and can suggest this: that a few Islamic economic laws and institutions need be recognized, used by the new government, to bring services and economic exchanges down to the street level, to build new 'smart towns,' and to incubate and sponsor capitalist plots. In a real Islamic society, even the poorest person will usually own shares in property or some joint venture.

17. Consumerism is no longer seen as a viable engine-of-economy in nations as poor as Egypt, Algeria, Yemen, Sudan, rural Tunisia and Mauritania. Egypt's economy should not be 'primed' and 'revved up' on or by the consumption of luxury imports. Import substitution is a way to national wealth. The oil has been pumped out almost, but NG should be coming on line in 2014, which, together with revenues from the Suez canal ($11 b), and tourism ($9 b.), provide 90% of the requisite funds for new economic projects. I am talking capitalism, many thousands of small businesses.

18.The army infrastructure and assets must be harnessed for development. And those in the army might relish the idea of actually doing things for the people. I'm speaking about the army assisting in auto-construction projects – new smart towns. That's an art that's almost forgotten. Of course, the Arabs were past masters at setting up cities in just a few months, Fustat being a prime example. (Note: The area of the Ishma'ili Maydan was originally the no man's zone between the Arab armies in Fustat and the Byzantine rulers of the Copt, Jewish and 'pagan' population settled along the Nile.

19. Cairo has no more space for more cars and trucks. Some 40% of its population suffers from a respiratory ailment. The poison is the equivalent of smoking two packs of cigarettes a day. A sudden high dose of CO, say from a traffic jam, will dumb down people without anybody noticing. These factors, together with the looming shortfalls of refined petroleum products, require that Egypt evolve into a 'smart' country. The recent breakthrough in solar cells has increased their efficiency and lowered their cost. (Of course Egypt should have its own solar cell companies. Almost all Middle Eastern, North African and Southwest Asian regions receive at least 320 days of direct sun light, so a great comparative advantage will eventually accrue to most villages, towns, cities. Many if not most families already use solar energy to heat water, on their roofs. They often set up satellite dishes next to them.

20. Investors have fled, taking much money. In Tunisia the family and friends of Zine Ben Ali have taken between $4 and $16 billion. In Egypt an estimated ten billion was extracted, legally. Illegal transfers could exceed $12 billion. Whatever the figure, it is several times larger than the $1.3 billion given to Egypt (to the army, only some $200 million being directed towards economic development in 2010.

21. It is as if we betrayed our own principles, preferring a corrupt elite few running an economy of military privilege. Where is our free market commitment? Our democracy? We were spooked by the Ikhwan, so they won that round. But now this round?

22. It is possible to mobilize capital and NGOs and small construction firms and hundreds of other companies related to construction, to create affordable housing. Cairo reminds me Kabul in this:. There's no way to meet housing imperatives without using auto-construction methods.

23. Auto-construction is almost lost as a collective skill, except amongst indigenous folk. There are serious and clear reasons to think carefully about establishing, from scratch, new towns. One starts small. They are much cheaper to build because they build with materials found at the site and because most labor will free. There all sorts of reasons – over twenty – why 'smart' towns are requisite. And there are some 21 dimensions, requirements, all necessary. These rural hubs are the only way to 'gently' reverse the trend of urbanization. Note: Morocco during the 1950s built a whole suburb of Casablanca, using the medina as a format. French architects helped them design other new towns and traditional structures. Si it has been done.

24. Of course many nations have created villages, even towns, from scratch. The Soviets paired these towns to one or two big industries, or they were set up as gulags. There is a third kind of Soviet new town, the sheraga, which was paired to the development of a technology, incubating its applications for later manufacture.

25. In 19989-90, while doing my dissertation at NYU, I worked with Prof. Charles Issawi on putting together the 'Islamic Smart Town.' It combined the oldest Muslim legislation re the built environment, with a step-by-step process, to create from mud brick or stone or mud itself, a little village, auto-constructed by the residents, assisted by the government, chiefly the army. This will soon become a town, and maybe even a small city a century later. For it would designed so well that it could feed and fuel itself, and thereby survive when other towns perish.

26. Western economists and financial authorities, including all bankers, would quickly tell you that creating a town from scratch requires way too much money up front. We cannot imagine founding a town from scratch. We don't let ourselves dream about that.

27. But of course it is, with a little help, not expensive to auto-construct a town: the labor and the building materials are almost free. The new Islamic smart town will attract many specialists, most as volunteers. For many are the experiments, many the cross-connections. The smart town becomes a hotbed of capitalist plots, a model farm, a platform for many small businesses, and schools. It will take advantage of the many new inventions available and appropriate, such as hand-cranked wireless computers, LEDs, cheaper and more efficient solar cells, special compounds that can be used to seal mud and mud-brick structures. The possibilities are amazing in their details.

28. Just as Nasser was able to re-arrange the plumbing in the Egyptian economy, turning many rich farmers into urban capitalists, the new democratic leaders must soon plan to construct some 2 million houses and flats around Cairo alone. For many poorer citizens, the need for food and clean water and medical care is more immediate. Humanitarian assistance first, then development.

29. Since all sectors and sections of the Egyptian society should have a place at the proverbial table, and then share rule, we figure that the Muslim organs can be of great assistance in bring social services to the street.. Of course the outsider will react to the phrase 'the Muslim Brotherhood' like a reflex, when in fact there are some 200 large Muslim groups in Cairo. Most have nothing to do with the MB. Many are Sufi schools, others literary associations. Some of the best are Muslims 'heresies,' sects following, for example, Nifari, that great 11th C. Egyptian mystic who, like Muhammed, spoke through a medium. His Mawaqif is a better, higher read than some other popular scripture. My point is that the Muslims really can help in the social service sector. But they need be vetted for top jobs. (Note: we have a short list of questions which will tell if a person really understands Islam).

30. If the US is going to give the army some billions, the army should be up and ready to do whatever it could to ease Egypt's very painful cramps, collective dyspepsia, and bad air. Of course the armed forces are active in all kinds of industries. Some 300 of these industries have been sold off to private investors. But just because Mr. Mubarak was slowly complying with IMF austerity measures, that does not mean that the army should just keep divesting itself, as Americans prefer. There are a some industries and services and agencies that need be supported, expanded, re-deployed, and followed up, adding growth factors (cash and skilled personnel).

31. The new government will be unable for years to gather together the financial and material and labor resources to construct low-income housing. The financial system worldwide is in disarray, a dearth of trust match with a lack of imagination.

32.The private construction companies have often been brought in to housing projects related to a government low-income housing scheme; but incredibly, some three quarters of these projects ended up as luxury housing units. Builders and speculators make more that way. Just another way to rip off the state (and the people).

33. But enough of this. None of the Arab nations can afford big companies that betray their own poor. Over the past decade, we've seen the middle class dry up
like a waterhole during drought. Prices for food are soaring. One Egyptian said he was happy that food prices fell back to where they were before the revolution. But those prices are double what they were just three years ago.

34. High prices for food were caused directly by the terrible heat wave in Central Russia in the summer of 2010. But austerity measures prompted by the IMF also raised the price. Obviously failure to bring food prices down will trigger new waves of unrest. Children are sent out to beg in any case.

35. Just as the January 25th Revolution at the Ishma'ili Maydan (Tahrir Sq.), appeared to rise spontaneously, so too the food (and water) distribution networks can and should begin to ramify and work their way down to the poor Egyptian. What I am saying is that there does not exist the time to spend years discussing elements and ideas. Cairo's population needs help now, especially just after the revolution. Businesses may bounce back fast enough, but prices remain high.

36. Here experts might not want to tinker with Egypt's bizarre economy. Adapting comparative advantages, certain army and Muslim humanitarian and service organs can re-configure their operations, aiming at delivering food, water and eventually, new housing to the poorer half. Over half of adult Cairenes live on less than $2 a day.

37. The delicate political situation also depends of grass-roots organization. The revolution may not have had a leader, but it needs elect or select representatives. Some of the reps need be technocrats, scientists, others representing the best of the Muslims. Some from the army, some from the professions. Some Muslims. Some Coptic Christians. Some from the city, some from the country.

38. Since there is no leader, the various reps can gather around a table and work out appointments and policies and actions and initiatives, rather than trust a heavy hierarchy, where a few determine the leader's policies behind the scenes, while the hierarchy perpetuates the errors.

39. It may be too much to ask that the new political affiliations, proto-parties, become so locally oriented, so close to their constituents, that they can also use these new cross-contacts to organize to deliver food and water and build more houses and flats.

40. At the moment, writing on February 11th, just a day after Mubarak resigned, the emphasis is still on symbols – the symbol of freedom, of the state, of human rights. Israel and America remain enemies, Israel for enforcing a comprehensive blockade against Gaza, America for being so entranced by its war on terror, that it ignored the weight, the urgency, of then people's needs.

41. Egyptians prefer to model their new government on North American democracy; they've had bad experiences with parliamentary forms of governance. Egypt needs a strong executive, and a bicameral parliament, but free of grandstanding and ideological critiques or posturing.

42. Egypt should be ruled by a thousand committees, each independent in the sense that it will not operate along narrow ideas, neither corrupted by the wealthy and the powerful, or absorbed into stupid Western economic plans featuring heavy industry, more infrastructure for autos and trucks, and a entire division of greed-besotted investment bankers, plus several for creed-besotted muftis.

43. Neither the West (carbon-heavy consumer capitalism) or the East (state-heavy socialism) will do. Each approach would lead to disaster. There cannot be real capitalism till there is real socialism, because such a large percentage of people are marginalized, made destitute or very poor. There cannot be real socialism with real capitalism because socialism needs lots of money for its programs. The state can either expropriate land and money, or make businesses just flower, so taxes soar and fill government coffers.

44.Is there a middle way? Yes. It does relate to Islam, but not the religion so much as the original practices of Muhammed at Medina. But only a few people understand these early laws and practices. Paradoxically, many nations loudly calling themselves Muslim do not have economies or laws or societies based on Islam.

45.For example, in Islamic law, private ownership is usually a shared claim. A family house belongs to women and children and old people, divvied up in shares according to mathematical proportions. But of course in all 'Muslim' societies, men own the homes and most of all else. This is not Islam.

46.For example, the law of auqaf or waqf (sing), though curtailed or banned in many countries, can permit a society to establish all kinds of social service institutions, with no state funds. But they need to be administered. He again the clergy can help, but they need to be vetted.

47. Islamic commerce is worthy of study in the West, because, in the West, the very poor are excluded from the market, while in Islam, definite laws permit the smallest vendor the same access to the market space as big corporations.

48. Readers of the Speculum Publications are well familiar with Muhammed's practices at Medina, how they differ from those of the religion. I can only assume the reader has studied Muhammed's Constitution of Medina. It is not a statement of religious dogma, but a practical way of bridging differences, ethnic and sectarian and economic.

49. Muhammed had no need or idea of a clerical hierarchy. He had no clergy. Fortunately, Egypt follows the Maliki legal tradition which is unique amongst the eight Muslim schools, for limiting clerical powers. For example, a family or individual who stakes out a piece of 'dead land,' and who is entitled in five years to a deed for that plot, must get final approval from the imam, to actually own the land. Only the Maliki school holds that the approval of any cleric is not required. The other schools developed under imperial pressures, while Malik ibn 'Anas, working in Medina with the descendents of the prophet and his companions, grew up with less imperial and/ordynastic pressures. (Malik was, like Abu Haifa Numa and ibn Shafi'i, and many other jurists were imprisoned by the emir or publicly flogged, Malik included.)

50. Far from being autocratic, Islamic law (fiqh and shari'a) grew up in opposition to self-selected authority. It has a real democratic streak. Muhammed said: “The government must consult with the people at every step.” This close-in cooperation is required for food and water distribution, security, the construction of housing, and for new town creation.

51. All through history we see the politics of symbolic appeal trumping the real needs of the people. Even the Israeli 'problem,' as disgraceful and as inhuman as is the Israeli grip on the Palestine, cannot be allowed to take up, consume, much-needed space and rationality.

52. Abandon the right and the wrong of it all. Just concentrate on the actual needs of people: the elderly, the sick, the single mother, the orphan, the student, the university student, the family's pressing needs for more space; and jobs. How to create jobs?

53. I recall Mikha'il Gorbachev saying “The greatest thing for our civilization to accomplish, is the creation of millions of jobs. And whoever figures out how to do that, deserves ten Nobel prizes.” (taken from a lecture given in 1988.)

54. The truth is neither the left or the right have the answers. The American Republicans insist that government has no role, that jobs will be created by the private sector. But businesses have been under-hiring for some years, because they figure they can double their profits by making each of their employees do three or four jobs. That's why productivity is so high in the US. (low wages is another).

55. The socialists of course think government should create jobs. In fact, not long ago, the Egyptian government hired every college graduate. Many of those jobs were needed, useful. Some were interesting. While these gov. jobs did not pay enough to really live on, they did offer the educated some sense that their degree meant something, that they meant something, that they had a relation with their government. For so many a job is a chance to get back to where they once were.

56. That nifty little policy, of the government hiring all the educated young adults, didn't cost all that much money, roughly $3 billion annually, in today's terms. But the IMF and World Bank and US economists pushed hard to shut down this kind of 'false' 'non-free-market' national employment scheme, which they called 'artificial manipulation' or 'distortion of the market.'

57. That phrase would make one laugh if it were not so tragic. All those businesses run by Mubarak's cronies and by the army, they were not only 'artificial,' they were illegal. Remember, any profiting from privilege, from special connections to or with any government department, by the family and friends of the officials, are illegal, all of them. And each of Egypt's three law codes (Islamic, Euro-influenced civil law, and international law) say this.

Let me close this economic section with some brief notes on the changing global energy situation.

58. Most analysts now admit that many of the estimates of oil given by Arab nations, the declared reserves in the ground, were way overblown. Egypt has already pumped out its oil, and is now looking to NG. Consumption by rising nations, India, China, Brazil, Russia, is rising and will keep rising till their autocratic regimes put their foot down. Curiously, the PRC declared driving illegal within town limits (unless you have special permission or the right license plate), on February 11th, 2011. (Note: China outlawed any mention of the word 'Egypt' in the press or on the air, after the Jan. 25th mass disobedience.)

59. Regrettably, people in Asia and Africa get to see photos and see private cars, and snazzy electronic equipment, and want to possess them. They see themselves as soaring over the land on sleek thoughways, or owning their home, or tuning in to the net. We in advanced countries need oil because we are built upon it, while the Egyptian or Chinese parvenu has no need, nor experience with, private automobiles.

60. The point is that the rising oil consumption means higher prices all around. There is not enough recoverable petroleum to fuel growth as the West knows and defines it – ie., petroleum-powered. Even in crowded Cairo, people dream and scheme to get their private cars. For that means they don't have to humiliate themselves by riding on the public buses or mix with others while taking a subway..

61, There is already an oil war going on. Sudan is on the verge of one. Oil has been found in Abiye, but the little town is right on the border between Northern and Southern Sudan. Nigeria of course has its little war. Iran, too. Pipelines are blown up by nomads. Last year the Saudis rolled back a large al Qaida cell planning to hit and set on fire the Ras Tanura refineries and tankers in the off-loading piers. Now revolution in the Arab is causing oil prices to rise.

62. It is no longer alarmist to say that, in ten years, gasoline and diesel and jet fuel will be too expensive for ordinary people to burn. So there goes the car, the heat for the house, all those plastic gadgets, and also, one might add, the grid. The electrical grid is dependent on petrol fuel and petro-materials and may not be able to be maintained everywhere, at all times. So new towns are those generating their own power and growing their own food.

63.Worldwide all these large cities will break into suburbs which then break into independent towns, municipalities. But these suburbs, sprawling as they do, were meant only as bedroom communities for the city. They were not organized to be independent municipalities. They lack the communal life and are unable to provide their food and fuel and clinics, or the money to build new housing.

64.When gasoline becomes too expensive, the links between communities will snap. Even buses can't carry all, and in some weeks, there just is not enough refined petroleum for any buses at all. People will no longer move around. Some trains and boats will bring in emergency food and firewood, some coal, and maybe a few manufactures. But people will be largely on their own.

65.Unlike America, Egypt is a very old civilization, so coming together into communities is not a big challenge. In just a few years, Cairo with all of its neighborhoods and sprawling suburbs, will break apart – the transport links will break or become intermittent. Then the River Nile will re-assume its place as the highway linking Upper and Lower Misr (Arabic for Egypt).

66. What seemed alarmist last year, seems common sense this year. Planning for the future must begin. It will be a very different future, one where heavy industry and big companies bow out. Energy needed for smelting, production, transport is just not there. So all those suburbs must be able to grow or raise or trade for, their own food and fuel. They must develop municipal centers open to all Egyptians regardless of faith or class. If they were smart, they'd bring in a little Islamic civilization, by setting up inns for travelers, soup kitchens, clinics, mental health sanctuaries, hospices for the dying, schools, and tijaret (trade) houses.

67.No doubt these master planners would use the law of 'ihya, or land-revivification, to set up beautiful new housing complexes built by residents, volunteers, the army and international low-tech specialists.
I see no way any of these North Africa and West Asia nations can meet their housing requirements except through massive auto-construction programs. Sounds weird to you, probably, to design and build a new city from scratch. You probably never let your imagination wander that way. Well, then good news is that is it possible to create a new town, a smart town, able to feed and fuel itself, while being connected to the world wirelessly.

68. The Group of Wise Men in Cairo have just a few weeks to put in place representatives from all of Egypt's factions. They must be the right people. The 'table' should seat some 24. Those factions include Egyptians educated in overseas, various Muslim groups including an al Aksa professor, lower-middle class street vendors, big capitalists and investors, secular moderns, women, and illiterate families who immigrated in from the countryside. Army and police officers, scientists and technocrats need be represented. Throw in a few poets, an economic historian, and there you have it. But will the youth settle on being excluded?

By John Paul Maynard, legal anthropologist Feb. 12 2011

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