Economic and social reasons for the Egypt's January 25 Revolution

Taha Abdel Alim
Saturday 31 Jan 2015

The Egyptian revolution will not succeed until it establishes a new system that eliminates the causes of the revolution, which persist until now

Egypt celebrates the fourth anniversary of the January 25 Revolution. Although it has not achieved its goals yet, and no matter what attempts are made to spoil celebrations by those who were aggrieved by 25 January, and especially those distressed by the 30 June revolution, we must remember that the nation of Egypt produced the two revolutions, regardless of Muslim Brotherhood plotting in the first and the role of the armed forces in the second.

In confronting denials by those aggrieved by the two revolutions — in their futile struggle — that "revolution" is not the correct label for one of them, we must remember that stripping 25 January of the status of revolution strips 30 June of the same status.

When we celebrate 25 January, we are at the same time celebrating 30 June because the latter corrected the path of the former by undoing a plot of "empowerment in return for dismemberment": meaning empowering takfiri (calling others infidels) fascism headed by the Muslim Brotherhood to rule Egypt, in return for dismembering the nation of Egypt as part of a US plot to create destructive chaos.

Whatever the frustrations and failures, I am certain Egypt’s twofold revolution will succeed because there is no other means to uproot their causes and achieve the aspirations of the people who made them, and thus deserve the status of revolution. I am also certain that the national democratic Egyptian revolution will only succeed by building a new system that eliminates the causes of the revolution and achieve its goals by building a country of citizenship, meaning a state that respects the constitutional, economic, social, political, civil and cultural rights of all Egyptians without discrimination or marginalisation. The revolution needs to build an order capable of achieving comprehensive progress and strengthening national sovereignty.

Instrumental factors behind the January 25 Revolution were the failures of the socio-economic system, organised corruption and rampant greed that embedded economic retardation and deepened reasons for poverty. It caused tens of millions of Egyptians to join the youth vanguards of the revolution.

To explain the embedding of this corruption by the regime, I refer to the great US economic scholar John Kenneth Galbraith who wrote in A History of Economics that the question that arises, and has in fact been asked a thousand times, is whether if demands were met and reforms made, could the French Revolution have been stopped or pre-empted? He responds: this question is pointless and baseless because when the wealthy and privileged are corrupt and incompetent they do not accept reforms that would save them. There is also the issue of timing and denial; why substitute pleasures, luxury and comfort in the short term by thinking about the horrors and disasters of the long term?

By not learning this poignant lesson from the French Revolution and others since the first social revolution in the history of Egypt and the world 4,200 years ago, we can understand the main triggers of the January 25 Revolution and its economic and social overtures.

Mubarak’s regime squandered all opportunities and calls for reform. Instead, it cemented its socio-economic system and did not learn the lessons of the world economic crisis because the succession lobby controlled economic political decisions. Its ideology squandered efficient resource allocation and fair income distribution, while boasting about Egypt’s economic indices.

In my article entitled “The Performance of the Egyptian Economy under Mubarak” (Al-Ahram, 8 October 2006), I reviewed the quarterly report of the Ministry of Trade and Industry comparing economic indices of 12 other countries. They were chosen according to two criteria: similar income rates and competitiveness with the Egyptian economy. The comparative report covered the first five years of the 21st century — that is, 25 years after Mubarak came to power.

In the article, I mentioned that Egypt ranked tenth on the GDP (gross domestic product) growth rate index; it ranked 12th on the gross domestic investment growth rate index with negative growth; Egypt came last on the gross domestic investment index. Egypt suffered a gap between savings and investment that raised the total public debt above GDP in 2004/2005. Egypt ranked 10th on the FDI (foreign direct investment) index, and came last when comparing FDI to GDP.

Egypt ranked first in foreign currency reserves and coverage of months of imports, but the report noted that overstocking of reserves misplaced a vital part of state resources that were not injected into the economy. Egypt ranked one before last on the global competitiveness of the business environment index.

Economic failures had negative social impacts such as poverty, unemployment and price hikes. Egypt ranked 11th on the average income of GDP index, and unemployment rose to about 10 per cent, which is more than eight other countries in the comparison. Meanwhile, inflation rates in Egypt jumped to 13 per cent in 2004.

Some may claim that Egypt’s economic indices improved in the years directly prior to the revolution, but this claim is refuted by data from the Ministry of Planning and the Central Bank of Egypt. Development rates grew, but this growth was related to real estate speculation and profits from monopolies, which inflated the wealth of individuals while industry and agriculture deteriorated, and poverty and unemployment exploded.

For example, there was a drop in real annual growth of manufacturing from eight per cent in 2007/2008 to less than four per cent in 2008/2009. Also, a drop in real annual growth of agriculture from four per cent in 2006/2008 to three per cent in 2008/2009. Meanwhile, real annual growth in real estate rose to 16 per cent in 2006/2007; and real growth in telecommunications rose to 15 per cent in 2008/2009.

The Egyptian revolution will not succeed until it establishes a new system that eliminates the causes of the revolution and achieves its goals.

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