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Over the past few weeks, the economic direction of the interim Egyptian government has been the object of intense debate in the World Bank, International Monetary Fund (IMF) and European Bank for Reconstruction and Development (EBRD).

This article argues, however, that a critique of these financial packages needs to be seen as much more than just a further illustration of Western hypocrisy. The plethora of aid and investment initiatives advanced by the leading powers in recent days represents a conscious attempt to consolidate and reinforce the power of Egypt’s dominant class in the face of the ongoing popular mobilisations.

Egypt is, in many ways, shaping up as the perfect laboratory of the so-called post-Washington consensus, in which a liberal-sounding "pro-poor" rhetoric – principally linked to the discourse of democratisation – is used to deepen the neoliberal trajectory of the Mubarak era. If successful, the likely outcome of this – particularly in the face of heightened political mobilisation and the unfulfilled expectations of the Egyptian people – is a society that at a superficial level takes some limited appearances of the form of liberal democracy but, in actuality, remains a highly authoritarian neoliberal state dominated by an alliance of the military and business elites. 

Many are now expressing anxiety over the negotiations’ lack of transparency and the possibility that the Egyptian government could agree to onerous conditions that may force it to cut back on spending on social welfare and safety nets. “Many fear that a new era of dependency will start, even after the revolution,” Amr Adly, economic and social justice director with the Egyptian Initiative for Personal Rights, a Cairo-based watchdog, told IPS.

“The best way for the international community to support a fresh start for the Egyptian people would be to support an independent commission to determine if much of the debt accrued during the Mubarak era is illegitimate and thus should be cancelled, before any new debt is undertaken,” Deborah James, with the Centre for Economic Policy Research, a think tank here in Washington, told IPS.

Morsi’s government is clearly aware of its lack of economic expertise, and thus has chosen to keep around some important members of Mubarak’s government, including the governor of the central bank, Farouk Al-Okdah, and others. “These are the very members of the neoliberal team once in charge under Mubarak,” Adly says. “These bureaucrats and technocrats are quite conservative, and there is the idea that they have been kept in office in order to negotiate with the IMF and the World Bank.”

The US, the other G-8 countries, the World Bank, IMF, BIS, and multinational corporations do not look kindly on leaders who threaten their dominance over world currency markets or who appear to be moving away from the international banking system that favors the corporatocracy. Saddam Hussein had advocated policies similar to those expressed by Qaddafi shortly before the US sent troops into Iraq.

A major problem for foreign investors is angst about the legality of much of the privatization carried out under Mubarak. After the 2011 uprising, the corruption involved began to be exposed, a raft of legal challenges were launched, and judges started overturning deals under popular pressure.

Investors want to have their cake and eat it: no more corrupt Mubarakite officials, and at the same time no more challenges to corrupt investment deals (which often strip a state company of its assets and lay off workers, spiriting any profits abroad).

The Muslim Brotherhood (MB) government tried to square the circle. It allowed the illegal privatisations to be challenged, turned back the massive corruption, and encouraged a new class of small and more devout businessmen to build a new Egypt, emulating the Turkish miracle which unfolded under the Islamists there.

Saddled with an estimated $35 billion of external debt, Egypt has been using much needed tax revenue to pay back international creditors.  Egypt recently put in a request for $4.8 billion to the IMF but with massive debt taken out under Hosni Mubarak, further debt on the Egyptian people may do more harm than good.

As the largest debtor nation in the region, instead of piling up more of a debt burden, the nation needs to make already unsustainable debts more manageable – and lending institutions should consider debt relief as a way to free up resources for the new Egypt.

The Egyptian people are being asked to pay back loans that were given to a tyrannical and unrepresentative former leader. While the international community was aware of the corruption, the suppression and the militaristic, strong man rule of law, loans continued to be given to Hosni Mubarak without the true consent of the people who would be shouldering the burden. It is unjust to demand that loans the people never asked for, never had any participation in accepting and rarely benefited from should now become the responsibility of Egypt's citizens. And the IMF piling on more debt will not help.

The government may need to clear other hurdles. Egypt turned down a similar loan arrangement with the IMF in June when the ruling generals said they didn’t want to burden future generations with debt. The erosion of reserves since then has made Egypt’s financial needs more acute. Another change, though, is the election of the first post-Mubarak parliament, which will need to approve an IMF loan agreement.

My focus is going to be on the articles related to the military, and rather than follow a liberal interpretation of law, where law is seen as apolitical, this analysis will be based on a realist interpretation of law, where law is seen as the codification of a political relationship backed by force. Although still subject to change, the draft constitution can tell us volumes on the current power relations within the Egyptian polity.

The most visible article that has provoked substantial controversy is article (174), which allows military tribunals for civilians. The proponents of this article have argued that it has been severely restricted, compared to earlier versions, and that it will only apply to cases of "terrorism". This argument, however, does not stand the test of scrutiny. The danger of this article is that it allows military tribunals to be held for “transgression against the public property of the military”. Considering that the military has an extensive economic empire that some experts estimate reaches up to 40% of the economy, this places the Egyptian working class in severe peril. In other words, if workers in those military establishments go on strike, perform acts of civil disobedience or occupy the factories, they can easily be deemed to be “transgressing” the property of the military, and sent to military tribunals, where the presiding judge is also an officer. This effectively means that the largest “capitalist” in the country has the power to send his workers to jail without the right to appeal. Needless to mention, the military's vast economic empire is not mentioned in the draft constitution, nor does it require civilian oversight and it is not subject to taxation. The military economic empire remains intact and protected. 

The council’s aim is to develop the media according to standards of “professionalism”, “ethics” and following the prerogatives of “national security”. This, combined with the leaked video of El Sisi planning a media clampdown and the shutting down of Bassem Youssef’s popular satirical show, do not bode well for freedom of media in Egypt. It is already extremely difficult to come across any media outlet that’s willing to take a critical stance towards the military. This control is now being codified into law.

In the political upheaval that followed the revolt of 2011 and the army takeover two years later, as investors fled and currency reserves plunged, Egypt turned to the GCC. First Qatar and later Saudi Arabia and the UAE obliged, with more than $40bn in grants, loans and investment to prop up sympathetic governments. Meanwhile, repeated talks with the IMF broke off short of a loan accord.

Mr El Sisi is already enacting some policies the IMF typically requires as conditions for loans. Egypt slashed fuel subsidies last year and aims to cut its budget deficit by at least 1.5 percentage points to 10.5 per cent of economic output this year.The fund would be likely to require faster action on that and other issues, and that would be a good thing, according to Lutz Roehmeyer, the director of fund management at Landesbank Berlin Investment.“Investors so far have the impression that politics and reforms are moving too slowly in Egypt,” he said. “An IMF programme would increase certainty that there will be a reform agenda.”

Many economists, though, believe that the squeeze on Egypt’s finances will force the government to overcome any such scruples.“Sooner or later, we will have to resort to the IMF,” said Omar El Shenety, the managing director at the Cairo-based investment bank Multiples Group. “For credibility first, before its money.”

The eruption of social and political unrest has followed the impact of deepening economic turbulence across the region, due to the inflationary impact of rocketing fuel and food prices.

The global food situation has been compounded by the over-dependence of industrial agriculture on fossil fuels, consuming ten calories of fossil fuel energy for every one calorie of food energy produced

The fuel price hikes, combining with the predatory activities of financial speculators trying to rake-in profits by investing in the commodity markets, have underpinned worldwide inflation.

the real problem with the regime was not necessarily that high-ranking members of the government were thieves in an ordinary sense. They did not necessarily steal directly from the treasury. Rather they were enriched through a conflation of politics and business under the guise of privatization. This was less a violation of the system than business as usual. Mubarak’s Egypt, in a nutshell, was a quintessential neoliberal state.

Political scientist Timothy Mitchell published a revealing essay about Egypt’s brand of neoliberalism in his book Rule of Experts (the chapter titled "Dreamland" — named after a housing development built by Ahmad Bahgat, one of the Mubarak cronies now discredited by the fall of the regime). The gist of Mitchell’s portrait of Egyptian neoliberalism was that while Egypt was lauded by institutions such as the International Monetary Fund as a beacon of free-market success, the standard tools for measuring economies gave a grossly inadequate picture of the Egyptian economy. In reality the unfettering of markets and agenda of privatization were applied unevenly at best.

Egypt did not so much shrink its public sector, as neoliberal doctrine would have it, as it reallocated public resources for the benefit of a small and already affluent elite.

As the Washington historian William Blum has documented, since 1945, the US has destroyed or subverted more than 50 governments, many of them democracies, and used mass murderers like Suharto, Mobutu and Pinochet to dominate by proxy. In the Middle East, every dictatorship and pseudo-monarchy has been sustained by America.

The revolt in the Arab world is not merely against a resident dictator, but against a worldwide economic tyranny designed by the US Treasury and imposed by the US Agency for International Development (USAID), the International Monetary Fund (IMF) and the World Bank, which have ensured that rich countries like Egypt are reduced to vast sweatshops, with half the population earning less than $2 a day.

How did such extremism take hold in the liberal West? "It is necessary to destroy hope, idealism, solidarity, and concern for the poor and oppressed," observed Noam Chomsky a generation ago, and "to replace these dangerous feelings with self-centered egoism, a pervasive cynicism that holds that ... the state capitalist order with its inherent inequities and oppression is the best that can be achieved. In fact, a great international propaganda campaign is underway to convince people - particularly young people - that this not only is what they should feel but that it's what they do feel."

because of the depth of the current crisis of capitalism, that duality will become, I believe, ever more polarised in the coming period. In this presentation I want to explore some of the causes and dynamics around what I would describe as a time of African Awakenings.

Indeed, I think it would be a mistake to consider the shifting political and social climate in Africa being based on the overt, large-scale uprisings alone. There is growing evidence in a number of countries of social movements re-emerging during the last 10 years, providing a framework through which the disenfranchised have begun to re-assert their own dignity, proclaiming - even if only implicitly - their aspiration to determine their own destiny, their own right to self-determination.

The remarkable growth and spread of alternative media such as Pambazuka News is, I would suggest, further testimony of the changing mood on the continent. Ten years ago when we launched Pambazuka News, I was dismissed as a hopeless romantic for naming the website and newsletter 'Pambazuka' meaning, in Kiswahili, the awakening. I believe that the gathering momentum of these awakenings defines the social and political scene on the continent today. We are witnessing not so much an ‘Arab Spring’ as an African Awakening.