By Yanis Iqbal – Apr 16, 2021
Egypt is one among the five countries in the Middle East and North Africa (MENA) region most affected by hunger during the COVID-19 pandemic. Widespread hunger in Egypt follows an international pattern. The World Food Program (WFP), the branch of the United Nations responsible for delivering food assistance, expects to need to serve 138 million people in 2021 – the most ever in its 60-year history.
The inability of the majority of countries in the world to effectively counteract hunger is a result of decades of neoliberal policies. These policies have either instituted import dependency or unleashed a process of export-oriented agro-industrialization, thus creating a highly unstable and deficient food regime. Egypt is not immune to these economic factors. Present-day hunger in the country is structurally situated in a pro-bourgeoisie paradigm intended to enrich the few at the expense of others.
Economic liberalization
The historical context for food insecurity in Egypt is provided by former President Anwar Sadat’s policy of Economic liberalization, faithfully continued by Hosni Mubarak till 2011 and by Abdel Fattah Al-Sisi until today. In 1960, Egypt had a self-sufficiency ratio (domestic production in relation to consumption) for wheat of around 70 percent. By 1980, the self-sufficiency ratio had fallen to 23 percent as imports rose to massive levels. Food aid and grain imports performed two important functions for imperialist powers. First, they tightly integrated Egypt into the world market and hence exposed it to fluctuating global prices. Secondly, they paved the way for growing levels of indebtedness as access to foreign currency became a key determinant of whether a country could meet its food needs.
In Egypt, these developments were an important part of Sadat’s decisive turn toward the United States through the 1970s. The 1973 war was estimated to have cost around $40 billion, and the general fiscal squeeze caused by rising food and energy imports led Sadat to seek loans from US and European lenders as well as regional zones of surplus capital such as the Gulf Arab states. The latter played a decisive role in bringing Egypt into the orbit of the American empire, with Saudi Arabia, Kuwait, the UAE and Qatar forming the Gulf Organization for the Development of Egypt (GODE) in 1976 to provide aid to Egypt.
The condition for Gulf financial aid was the elimination of Soviet influence in Egypt (the Soviet-Egyptian Friendship Treaty was canceled in March 1976) and the implementation of a series of economic reforms prescribed by the US Treasury, international Monetary Fund (IMF) and World Bank, which included an end to subsidies and a deregulation of the Egyptian pound (which would raise the cost of imports). As the Egyptian government moved to amend laws to allow repatriation of profits and free flows of capital and attempted to lift subsidies, funds arrived from GODE.
Impoverishment
With the arrival of neoliberalism in Cairo, the masses became increasingly poor and were unable to buy food in adequate quantities. This was the natural outcome of an unending spate of privatization. In 2000s, Egypt gained the dubious distinction of being the leader of privatization in the Arab world. The country’s privatization program was launched as part of a Structural Adjustment Program (SAP) agreed between the Egyptian government and the World Bank and IMF in 1991. The major focus of this SAP was Law 203 of 1991, which designated 314 public sector enterprises for sale.
By 2008, Egypt had recorded the largest number of firms privatized out of any country in the region and the highest total value of privatization ($15.7 billion since 1988). Unlike other states, in which just one or two deals made up the majority of privatization receipts, Egypt’s sell-off was wide-ranging – it covered flour mills,
steel factories, real estate firms, banks, hotels and telecommunications companies.
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To prepare state-owned companies for privatization, the Egyptian government terminated subsidies and ended their direct control by government ministries. In many cases, loans from international institutions were used to assist in the restructuring and upgrading of facilities prior to sale, burdening the state with debt while investors received newly-retooled and modernized factories. The end result of privatization was a severe deterioration in labour rights and wages, facilitated by the growth in informal work conditions and the increasing exploitation of women in “micro” or small enterprises where minimum wage, social security and other legal rights were not in effect.
Informal workers make up over 63 percent of Egypt’s estimated 30 million employed population, according to the International Labor Organization (ILO). Egyptian officials say the sector generates nearly 40-50 percent of the country’s economic output. Informalization of the labour market has systematically immiserated workers. The poverty rate rose from 25.2 percent in 2010/2011 to 26.3 percent in 2012/2013 and 27.8 percent in 2015, then jumped to 32.5 percent in 2017/2018, which means that 32.5 million Egyptians are poor according to the “national poverty line” of EGP736 per person per month (about $60 CDN).
The World Bank pegs the poverty rate even higher, at 60 percent of the entire population. Inequality across regions is sharp; poverty levels in Egypt’s poorest villages are as high as 81.7 percent. The number of people living below the Severe Poverty Line of EGP491 (about $40 CDN) also rose – to 5.3 percent in 2015 and 6.2
percent in 2017/2018 – meaning 6.2 million Egyptians are extremely poor.
Agro-export industrialization
During the COVID-19 pandemic, Egypt’s agricultural exports increased significantly. The country became one of the largest exporters in the world of oranges, strawberries and onions. Most of the Gulf countries lifted trade restrictions related to their import of Egyptian products. Egypt’s exports increased not due to a boom in production but because these countries were preparing for an impending crisis. This has greatly affected Egyptians’ access to goods since productivity did not increase but exports did.
The heavy focus on export crops rather than local staples is not new. Since the 2000s, production of rice, maize and wheat has been pretty much stagnant. As a result, Egyptians are dependent on expensive food imports. In 2016/17, Egypt imported 12 million tons of wheat, over a million tons more than the average for the preceding 5 years. This coincided with 42 percent annual food price inflation, the highest for 30 years. The Egyptian Food Bank, a large charity that feeds the poor, increased its “handouts” by 20 percent and extended its reach to “middle class” families, showing the pervasiveness of food insecurity.
In the current conjuncture, Egypt needs to move beyond the neoliberal model of agriculture which only succeeds in increasing hunger. Liberalization, immiseration and agro-export industrialization all serve to buttress the power of imperialism and facilitate the concentration of wealth in the hands of the few. While there was hope after the 2011 uprising that farmers would enjoy new freedoms and opportunities, it was not forthcoming. On the contrary, farmers have been harassed and seen their crops being damaged, and there has been considerable police intimidation if farmers have had the courage to challenge aggression from agribusiness firms. Small farmers have been bogged down in costly legal proceedings where big landowners have reclaimed land that they had lost during Gamal Abdel Nasser’s agrarian reforms in the 1950s. In addition, small farmers have had to bear the burden of increased rents and expensive farming inputs. An alternative model needs to be urgently established to replace Egypt’s current agricultural architecture which will end up in a seemingly endless “hunger pandemic.”
Featured image: File Photo
Yanis Iqbal
Yanis Iqbal is an independent researcher and freelance writer based in Aligarh, India and can be contacted at yanisiqbal@gmail.com. His articles have been published in the USA, UK, Canada, Australia, New Zealand, Germany, India, Bangladesh, Vietnam, Turkey and several countries of Latin America.
