The Brotherhood's one per cent

Wael Gamal , Tuesday 17 Jul 2012

What lies between the president and social justice is the elite of the Brotherhood, the one per cent, who are set to pursue the same neo-liberal policies which led to the revolution

The American magazine Business Week, published by Bloomberg, describes Hassan Malek, a 53-year-old Muslim Brotherhood millionaire businessman as follows:  “Mild-mannered and serious in conservative suits, Malek would easily blend in with the Wall Street crowd.”  

Architect of Morsi's proposed economic policies, Malek summarised his position on the Mubarak regime to the news magazine a few months ago when they visited him at his home in Heliopolis. “They allowed me to reach a certain level (of economic activities and projects), but there was a ceiling.”

Malek and his peers believe in an economic system that puts them – according to Business Week – in the “the one per cent" of the Brotherhood. The "one per cent" is a term coined by the world protest movement Occupy. It refers to the small ultra-wealthy clique that benefits from the economic order, as opposed to the 99 per cent who are outside political and economic policy decision-making circles.

The new economic order, as proposed by the Brotherhood, does not challenge the arguments and assumptions of Mubarak’s socio-economic structure, in terms of the free market, trade, and giving priority to the private sector and foreign investment. It is based on empowering that structure to work for a new business elite, simply without the “corrupt practices."

It was not at all unusual, therefore, that Malek invited a large number of businessmen from the former regime (some of whom are suspected of influence peddling, corruption and economically enabling the succession scenario) to meet with President Morsi a few days ago.

During the meeting, one of them – an investor in tourism - even talked about the negative image Tahrir Square is projecting to the world, repelling both tourists and foreign currency. He was eventually challenged by another attendee who said that if it were not for Tahrir Square, this meeting with Egypt’s first freely elected president would never have taken place. The president reassured the group that he does not intend to seek retribution, or else he would not have invited half of those on the guest list.

Morsi's presidential platform

Morsi did not necessarily win ballots because of his electoral platform's rationale. The presidential run-offs shocked Egyptians by presenting the possibility of a restoration of the former regime in the flesh and blood - and they rejected that option.

As so many people voted against the old regime, Morsi’s victory was not mainly an outcome of support for his platform.

The platform is the most straightforward of those offered by the presidential candidates, in its commitment to the main arguments of neo-liberalism. It is the only one that embraces continued privatisation policies, both generally and in "strategic" sectors. It is also the only platform that is based on attracting billions of dollars in foreign investment for infrastructure projects, and on a pivotal principle of trade liberalisation.

In April, a few days before he was eliminated as a presidential candidate with the same platform, leading Brotherhood figure Khairat El-Shater told news agency Reuters in a video interview that social justice is a key and vital issue "but it is a comprehensive concept." Comprehensive, in the eyes of the man who is at the helm of the Brotherhood financial empire along with Malek, means that “it requires projects, but the state does not currently have resources for at least two more years. Thus, the private sector must be given an incentive.”

El-Shater is not referring to industry, agriculture and tourism alone, but also electricity and potable water projects. He gives us a glimpse of the new economic order that will invite businessmen to participate in projects and sectors that former prime minister Ahmed Nazif’s government failed to liberate for monopolies, before it was overthrown by a popular revolution.

Projects under what is called public private partnerships (PPPs) are the epitome of privatisation bias that benefits the one per cent. We are talking about privatising commodities that are essential, whereby the choice is either to pay the liberalised cost of electricity or sewage or drinking water, or to go without. This has been the case in a number of developing countries that have gone through this painful experience for the 99 per cent of the population. 

Where this model has been implemented, it was less to alleviate the burden of funding on the state, than to allow the private sector to become dependent on state patronage at the expense of taxpayers and consumers. In experiments to liberalise or privatise railroads in the UK and Germany, the cost of consumption increased, the state continued to pay and the quality of the service deteriorated.

This is privatisation in its essence; it leads to the redistribution of society’s wealth and revenue for the benefit of the one per cent. El-Shater’s proposition and the presidential platform sees a large role for foreign investment in these sensitive projects, in coordination with international institutions, most notably the World Bank, International Monetary Fund and the European Development and Construction Bank. These institutions support PPPs as a covert alternative to old school direct privatisation policies, which the people have rejected. 

On the other hand, the presidential platform talks about slashing unemployment and increased spending on education, health and public services. Funding would primarily come from the private sector, which ignores the fact that social justice requires core amendments to the taxation system. Morsi's platform does not give any details about the implementation of progressive taxation. It also requires an alternative approach to the logic of the economic system which reproduces the notion of the ‘trickle down effect’, whereby the profit machine, once it is working at full capacity, will pull the entire society forward with it.

It is a theory that focuses on the wealthy by increasing their numbers – raising the ceiling that was placed on the Brotherhood’s one per cent and others – which is said would in turn lift up the poor with them. But the failure of these arguments and projects - and the former regime has admitted as much - are the very reasons why there was a revolution in the first place.

The political foundation of social justice

The 100-day programme that the president announced as soon as he came to power promises key urgent reforms on five main fronts, most prominently security, traffic, and access to basic commodities. These reforms seem minor compared to what is required in the economy as a whole, and what is necessary in terms of redistribution of wealth to benefit the 99 per cent who suffered under the system of exploitation.

The problem with the 100-day programme will not be technical or economic. The necessary reforms depend on a comprehensive political revolution. How can the president dismantle the monopolies over the import and distribution of basic commodities without entering a direct political confrontation with a segment of businessmen, which the Brotherhood one per cent is seeking to join?

Can the issue of waste collection be resolved by the same logic that created it, namely the entrance of major international companies and the private sector into the industry, which compounded the problem by eliminating traditional methods (which, by the way, is also private sector) in return for profit that is transferred overseas?

Can the traffic problem be resolved without root changes in current policies that favour private car importers and their profits by giving priority to ring roads and those with the purchase power to buy cars (only five per cent of families own a car) at the expense of government investment in public transportation?

Unfortunately, taking steps towards economic reform and the improvement of living conditions, even simple ones, must be directly linked to the redistribution of income and wealth, and resetting the economy on a different compass: towards the 99 per cent.

This is essentially a political battle that requires a different coalition based on interests that contradict those that the Brotherhood one per cent are pursuing.

The late Brotherhood authority on economics, Abdel-Hamid El-Ghazali, described his view of the Islamic approach to development as follows: “Islam and its economic system and approach to development is a real, continuous and successful war on all forms of economic injustice – meaning exploitation – through a distinct and absolute ban on usury and deceit; monopoly and hoarding; extravagance and tricking; cheating and undervaluation; fraud and deception; bribery and nepotism. And all other forms of unjustly taking away people’s money, as well as all forms of improper practices in economic activities in production, distribution and consumption.”

This is what the 99 per cent of the 5.6 million voters who made President Morsi their first choice expect, and what his presidential platform will not permit. Surely, this is not the way to achieve social justice.


This article was first published in Al-Shorouk 

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