The Egyptian Middle Class Is Disgruntled. Again.

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Guy Laron is a lecturer in the Department of International Relations, the Hebrew University of Jerusalem. Attribution to the History News Service and the author is required for reprinting and redistribution of this article.

During the current popular uprising in Egypt, foreign correspondents in Cairo have often remarked on the large numbers of highly educated young men and women who are thoroughly frustrated by the gap between the education they have attained and the jobs they have found.

In one New York Times story, a protester in his thirties told a correspondent that he had studied geology, but after graduating the only job that he could get was delivering newspapers.  Other young men said that their meager salaries made it impossible for them to get married.  Many others complained of low pay and underemployment.  While the protesters in Liberation Square clamor for more democracy, the chief cause of the demonstrations may be the economic plight of the Egyptian middle class.

The roots of that economic plight reach back to the 1940s.  Ironically, Egypt's educated elites have been trapped for sixty years by an economic development strategy that they themselves forced upon the Egyptian government.

To understand how this happened, we need go back to the July 1952 coup that brought the current military regime to power.  In the seven years preceding the coup, a host of violent demonstrations rocked this ancient nation.  The protesters were eerily similar in their social profile to those who are demonstrating now.  But here is one important difference:  In the late 1940s many university graduates could find no jobs at all.

Then, as now, their ability to shape public opinion was greater than their numbers—no more than a few hundred thousands—because they resided in the big cities and their education conferred on them an elevated social status. These educated young men—known at the time as the effendia—had straightforward economic demands.  They wanted the government to adopt state planning and a centralized economy in order to accelerate Egypt's industrialization.  Of course, state planning would be a direct boon for the effendia because it would require a large bureaucracy and create many new jobs for university graduates.

Those who were running things at that time were the big landowners, known as the Pashas, and they were loath to agree to these demands.  State intervention would require increased taxation, and the richest people—the Pashas—would pay the most.  Then in 1952 a young military officer named Gamal Abd al-Nasser led a bloodless coup.  He soon enacted an ambitious land reform program, pulling the rug from under the Pashas' feet.

But Nasser also ignored effendia aspirations.  He preferred to open up Egypt's economy to foreign investment, balance the budget, and cut down the size of the governmental bureaucracy.  Catcalls during Nasser's public appearances, raucous student demonstrations against the regime, and unrest within the army ensued.

After tumultuous effendia demonstrations in 1954, Nasser changed course.  He introduced central planning and allowed the number of state employees to balloon.  In the next few years Nasser nationalized all major branches of the economy.  A classic monopolistic economy emerged in which the large companies, protected by tariff walls, enjoyed a captive market.

In some ways the effendia won.  The development strategy they had forced on Nasser continued under his successors largely unchanged, and it has ensured jobs for most of them.  But for the effendia job security came with a heavy price:  stifled growth up until the end of the 1990s and very low salaries.  This is the reason why some white-collar workers today do not have the means to get married and others cannot find jobs that suit their skills.  The economy is simply not as diversified as their skills are, and what gets rewarded most of the time are connections not qualifications.

The only reform that Egyptian President Hosni Mubarak introduced was the privatization of some of the state monopolies, which meant mainly delivering them to his son's rich friends.  Proceeds from recent gains in growth, therefore, went into the pockets of well-connected businessmen who led ostentatious lifestyles.  This growing inequality has dashed the hopes of white-collar workers.  In the past year, rising food and fuel prices were the final straw.

The question now is whether the current wave of protest will help usher in a government that will open up the economy and encourage real competition among firms.  An equally important question is whether the educated, white-collar workers now protesting against the status quo would be willing to endure the economic dislocation that would ensue.

This piece was distributed for non-exclusive use by the History News Service, an informal syndicate of professional historians who seek to improve the public's understanding of current events by setting these events in their historical contexts. The article may be republished as long as both the author and the History News Service are clearly credited.

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Arnold Shcherban - 2/15/2011

perpetrated by the majority of Western historians and political observers (added currently by many Eastern European and Israeli ones) would have been laughable and totally failed attempt, if it has not had such terrible consequences for the nations through the practical, often violent and covert foreign policy implementations of the theoretical myths and severe a-historical distortions created by those "pundits" and "experts", by the Western and Israeli power elites through their governments.

Just a cursory glance at some of Mr. Laron's statements gives one a good illiustration to the content of the previous sentence.

<...go back to the July 1952 coup that brought the current military regime to power.>
For overwhelming majority of Egyptians
the events of 1952 undoubtedly constituted a Revolution then, and still do it now. Not coincidentally,
when Abdel Nasser, that revolution's leader and national hero died tens of millions Egyptians literally cried in despair and grief.
No other Egyptian political or military leader in modern history has been loved by so many and hated by so few Egyptians.
But Western and Israeli reactionary ideologues and national imperial leaders know better and refuse to acknowledge that, calling obvious Revolution a coup.
The explanation is simple and has been clear to majority of the world
for decades: 'cause that "coup" did not bring the right (pun is intended) local folks to power, to the great disappointment and anger of all imperialists and exploitators of Middle East natural and human resources.
On the same reason, further bewildered by the latest development of popular uprising against dear friend of Israel and the US dictator Mubarak, Mr. Laron and others in his camp of theoretical terrorists make now ridiculous, but sinister attempt
to conflate the national revolution of 1952 and its real accomplishments with anti-national, military regime
of latest Egyptian ruler.
However, polar difference between Western and Israeli ideological, economic, and political relations with Abdel Nasser's and Mubarak's governments, by itself, serves as the best proof of principal differences of those two.
Just a few from the author's obvious ideological camp had gained a courage
to openly named Mubarak a dictator and only now.
The rest of them shy away from that factually correct and deserved characterization of the latest Egyptian ruler, in their own words, on
just one exclusive reason: he maintained good relations and peace with Israel. It's like saying that the Soviet regime was not totalitarian just because for 40 years (since the end of WWII) it maintained good relations and peace with Finland (democratic capitalist country.)
Apparently the whole purpose of Egyptian government and society to exist is to maintain good relations and peace with with Israel (not that the peace by itself is a bad thing.)

Fahrettin Tahir - 2/15/2011

So all the wars Egypt fought played no role in keeping the country poor?

Let us look for one moslem country which did get rich with socialism, or a market economy ..

So much for ideology.

Perhaps investing the oil revenue in Arab countries instead of in the USA would do the trick?