Egypt: Economic and social crisis deepens/FRFI 234 Aug/Sep 2013

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Fight Racism! Fight Imperialism! 234 August/September 2013

The mass mobilisations of millions of people on the streets of Turkey, Brazil and Egypt in recent months result from the crisis gripping international capitalism. In Egypt, the people’s demands for ‘Bread, freedom, social justice and human dignity’ cannot be met by the capitalist Egyptian state. The Egyptian ruling class tried to buy itself time by removing the government of President Morsi on 3 July. However, the problems underlying Egyptian society and the entrenched interests of its ruling class threaten to propel the masses back onto the streets and this time the conflict could prove decisive for the future of Egypt and the entire Middle East. TREVOR RAYNE reports.

It is estimated that by 30 June up to 17 million of Egypt’s 84 million people were demonstrating, calling for the removal of President Mohamed Morsi and his Freedom and Justice Party (FJP) government – linked to the Muslim Brotherhood. Morsi had been sworn in as President before the Supreme Constitutional Court exactly one year previously. The Supreme Council of the Armed Forces (SCAF) seized Morsi on 3 July, replaced him with an interim president, Adli Mansour, head of the Supreme Constitutional Court, suspended the constitution and dismissed the government. The Financial Times said that ‘Egypt’s military took the side of the people’ (5 July 2013). In fact, Egypt’s military commanders had never ceded real power and acted to preserve their own economic interests and Egypt’s strategic role for imperialism.

President Mubarak was overthrown in February 2011, with the military overseeing his removal, but despite the election of Morsi as President, the SCAF never yielded control of the vital security and intelligence services, the police or the civil service and would not allow any civilian regulation of its budget. The Supreme Constitutional Court remained in the hands of judges appointed in the Mubarak era. The SCAF retained power over the Interior Ministry, the Defence Ministry and the important Suez Canal Authority.

Ever since the Camp David Accord between Egypt and Israel, brokered by the US in 1978, Egypt has been a key regional ally of US and European imperialism. Since 1987 Egypt has received $1.3bn a year in military aid from the US, about a fifth of the Egyptian military budget; only Israel receives more. Neither the US government nor the United Nations called the removal of Morsi’s government a coup because if the US designates it as such then US aid must be discontinued. Instead, the US Under Secretary of State William Burns visited Cairo to tell the generals, ‘We will not try to impose our model on Egypt … We don’t take the side of particular personalities or particular parties.’ The US ruling class knows where power in Egypt really resides and it is determined to keep it on side and in power. Egypt’s military is not only funded by the US; its officers train in the US.  

Former British Labour Prime Minister Tony Blair, now Special Envoy for the Middle East Quartet (the Quartet being the UN, the US, the European Union and Russia), writing in The Observer (7 July 2013), supported the coup: the Egyptian military was ‘confronted with a simple choice: intervention or chaos.’ Blair was explicit in assessing its international significance: ‘Disengagement is not an option … At its crudest we can’t afford for Egypt to collapse. So we should engage with the de facto power and help the new government make the changes necessary, especially for the economy … Our interests demand that we are engaged … But it is our job [to sort out the Middle East].’ And there we have it: a century of claiming that the Middle East belongs to European and US imperialism and that the Egyptian army is the best guarantor of ensuring that the people do not claim back what is rightfully theirs.

Economic and social crisis

When the masses exploded on to the streets to force the removal of former President Mubarak in 2011, FRFI pointed to the underlying social crisis that compelled the people to revolt. 80% of Egypt’s people lived on less than $3,000 a year; 44% lived on or below the poverty level of $2 a day. ‘There has been zero per capita income growth since the mid-1980s. 37% of the population are under 15 years of age and 60% are younger than 25. A quarter of young men and 60% of young women are unemployed. Over the past decade the Egyptian pound has lost half its value against the US dollar, driving up food prices. Riots erupted in 2008 in response to 20% food price rises’ (FRFI 219 February/March 2011). Since then conditions have deteriorated. Since January 2013 the Egyptian pound has fallen 10% against the US dollar. Income from tourism has not revived and foreign investment has not been forthcoming. Egypt’s central bank announced that foreign currency and gold reserves had dropped to $14.9bn at the end of June, down from $16bn a month before and $36bn in January 2011. Egypt is increasingly unable to pay its bills and import goods. Unemployment for people under 24 is now over 40%.

Tamarod (meaning ‘mutiny’ or ‘rebellion’) was formed on 28 April 2013 by five activists from the anti-Mubarak revolt. They aimed to collect 15 million signatures on a petition by 30 June calling for Morsi to step down from the presidency before 2 July or a civil disobedience campaign would be launched. The dominant media groups, many with ties to former President Mubarak’s government, intensified an anti-Morsi and anti-Muslim Brotherhood campaign. Fuel shortages resulted in petrol queues and power cuts. The fuel shortages may have been partly due to the government owing $8bn to oil companies, but as soon as Morsi was removed, oil shipments from Saudi Arabia, the United Arab Emirates and Kuwait resumed, suggesting that the fuel shortage was engineered.

When the millions of people poured on to the streets on 30 June, Defence Minister General Abdel Fattah Al Sisi used the scale of the protests to issue Morsi with an ultimatum: reach a compromise with the protesters or the military will intervene. Morsi rejected the ultimatum in a speech delivered on 1 July. Then 16 people were killed and hundreds wounded at a pro-Morsi rally in Giza, close to Cairo. The SCAF struck two days later.

Massacre and repression

Morsi has been detained by the military since 3 July and denied visitors. Some 300 arrest warrants against FJP and Muslim Brotherhood members have been issued; many have been detained. Muslim Brotherhood and FJP assets and buildings have been seized and bank accounts frozen. Pro-Morsi media outlets have been closed down. A state of emergency was declared in the Suez region and southern Egypt. Morsi is to be charged with collaborating with Hamas. Some forces described as ‘liberal and secular’ want to ban religious-based political parties.

Muslim Brotherhood and FJP supporters reacted angrily to Morsi’s arrest and the dissolution of the government, mounting large demonstrations calling for Morsi’s release and restoration as President. On 19 July 2013 The Guardian published a detailed account of a massacre perpetrated by the armed forces in the early hours of 8 July. Many thousands of pro-Morsi protesters assembled close to the Republican Guard compound where Morsi is believed to be held. The army claims that 15 armed motorcyclists fired on them. The report gives no evidence for this. Eye witnesses recount an unprovoked attack with soldiers firing live ammunition from ground level and rooftops at the protestors. At least 51 people were killed and 435 injured. As we go to press, on 27 July over 120 people have been reported killed, many by soldiers firing live ammunition.

This killing of civilians was planned and is a warning to all those who would challenge the military’s power in Egypt. The guns that were turned on the Muslim Brotherhood on 8 and 27 July can be fired at workers and socialists – if it comes to it.

Factions of the ruling class  

Morsi was elected President on 24 June 2012 with 51.73% of the vote against Mubarak’s last Prime Minister Shafiq, who got 48.27%. The Muslim Brotherhood has the support of about a third of Egypt’s population and is the largest political organisation in Egypt. It is well established among the poor in rural areas and has built support among the urban poor through the organisation of charities, mutual aid societies and social services. Support also comes from the urban middle classes (lawyers, doctors, engineers) and small-scale industrialists, but the Muslim Brotherhood’s leadership is overtly capitalist with millionaire businessmen. Thus the Muslim Brotherhood represents a faction of the Egyptian capitalist class; it has repeatedly tried to defeat strikes, for example by teachers and doctors. Morsi’s government did nothing to repeal the labour and tax laws that favour the rich and nothing to bring to justice those who perpetrated the violence against the demonstrators in 2011.

‘The Egyptian army controls up to a third of the economy. It produces chemicals, fertilisers, gases, household appliances, hotels, chicken farms, car repairs, optical equipment, child care facilities, water and fuel tanks, as well as explosives, tank shells and small arms. It is part of the Egyptian bourgeoisie,’ (FRFI 224 December 2011/January 2012). The SCAF resented any attempt by the Morsi government to lessen its monopolistic position in the economy, but viewed the massive protests against the government as potentially threatening the entire capitalist class in Egypt. The alliance between these factions was sacrificed for the benefit of the military leadership.

Egypt’s armed forces contain about 500,000 full-time soldiers and 500,000 reservists. Given the scale of popular mobilisation on the streets, the ruling class and the imperialists must calculate how reliable they would be in a clash that required severe repression. Egypt’s military commanders are capitalists, owners of major industries. Below them are junior officers who have relatively privileged lifestyles, higher than average incomes and relatively secure jobs. The majority of the army are drawn from the urban and rural poor and many will be from families who support the Muslim Brotherhood. Any serious socialist challenge to state power must link up the urban masses and youth protests with the rural poor to stand a chance of disabling the army.

Regional manoeuvres

One of the first acts of the military on 3 July was to close down the Gaza border crossing. It has, with US help, destroyed more tunnels between Sinai and Gaza and threatened Palestinians who travel to Cairo by airline that they will be turned back and not allowed to proceed to Palestine. Turkey and Tunisia, with religious-based political parties in government, condemned the coup, as did Qatar which had pledged $8bn to Egypt and which supports the Muslim Brotherhood.

Saudi Arabia and the UAE were the first to congratulate the military leaders and pledged $12bn to Egypt. Saudi Arabia has some $630bn in cash reserves and will try to use these to direct Egypt’s foreign policy stance. Saudi’s ruling monarchy views the Muslim Brotherhood as a threat to its power. Saudi Arabia funds the Salafist Nour Party in Egypt, which originally allied with the Muslim Brotherhood and FJP government but switched sides to support the opposition. Iran condemned the military takeover – it had established relations with Morsi’s government. However, Syria welcomed the coup after the Muslim Brotherhood had called for the overthrow of the Syrian state and closed down Syria’s embassy.

Alongside the military command there are plenty of cats’ paws willing to represent the interests of imperialism and its allies in Egypt. Critical to any radical and progressive movement must be support for Palestine and opposition to the war against Syria and the imperialist and Zionist threat to Iran.

The interim government has started to rewrite the constitution and parliamentary elections are proposed for before February 2014. None of this will alleviate the suffering of the Egyptian masses. Any progress in Egypt, any attempt to overcome poverty and oppression, must confront the power of the armed forces and the imperialists behind them. The youth, the new trade unions, the women fighting brutalisation and suppression will be vanguards in this struggle.