International Financial Institutions Supported the Mubarak Regime
BNP Paribas economic experts said: “the political system is solid”. While the IMF vouched that “Egypt has made significant progress...”
“The political foundation constituted by the army and a widespread system of subsidies can at least temporarily hold off the regime’s potential destabilization.” So BNP Paribas economic experts maintained in a recent note, dated January 28, 2011. “In our opinion the risks that the Egyptian regime might be destabilized should not be overestimated,” they concluded. And yet those same experts’ assessment of the system was terribly incriminating: young people have “great difficulties in finding jobs, more than a third of them are unemployed” and “poverty is rampant among the 84 million inhabitants.”
Financial decision-makers lament the people’s destitution, but do their utmost to ensure the continuation of the policies that generate it. Such has been, for decades, the creed of the great international financial institutions concerning the regime. “Egypt has made significant progress by stepping up structural reforms beginning in 2004,” IMF experts vouchsafed in late March 2010.
The IMF has persistently encouraged the opening of the country to the multinationals’ greed for profits; it has applauded privatization measures for companies and public utilities, incited the Egyptian authorities to guarantee “greater flexibility on the labour market.” Under Dominique Strauss-Kahn’s leadership, the IMF lately “hailed the (Egyptian government’s) political response to the (global financial) crisis”, including “the stimulus provided by targeted budgetary measures and successive cuts in interest rates,” but invited the Egyptian government to implement “a drastic reduction of the budgetary deficit” and of public social expenditure.
Such blindness to the social effects of such policies also characterizes the other great international institutions. In 2007, the World Bank rated Egypt as the best country worldwide for pro-business reforms.” The OECD (the great capitalist countries’ club) noted in November 2010, a month and a half before the Egyptian people’s revolt, that “Egypt has made impressive progress in order to become more business-friendly over the last five years.” Yet the same US-dominated international institution declared to Egyptian leaders that ”Drastic reforms are yet needed in order to attract more massive foreign investments.”
Such is indeed the model promoted to Egyptian leaders by the dominating powers: ”to make Egypt a more attractive destination for national and foreign investors.” In addition to this, the OECD, IMF, and World Bank, but also the EU though the agreements it concluded with Mediterranean countries, have ensured that North African and Middle-Eastern countries wage a fratricidal economic war. Witness a recent communiqué by the OECD: “competition between neighbouring countries has led to the adoption of vast reforms.”
“Divide and rule”: the old system is definitely out of breath!
This article was first published, in French, in the daily L’Humanité. It was translated by Isabelle Metral for L’Humanité-in-English. The photo is by Nick Bygon.