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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. 

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.

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.”

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.

The GCC oil sheikhs ‘paid’ $15bn in aid for the July 2013 coup in Egypt, but the handouts were quickly used up on buttressing the Egyptian pound and on a dismal $4.9bn stimulus package. The Egyptian pound has continued its slide, economic growth has stalled (at best its 1% in the first quarter of 2014), the budget deficit stands at14% of GDP, unemployment is 13.4%, inflation is 10%, while public debt and foreign debt are accelerating. GCC aid is not just monetary, and includes fuel and natural gas, which Egypt was cavalierly exporting until last year.

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. Egypt is ripe for such a development, but the paranoia of the secular elite and their unwillingness to make room for a less corrupt, more dynamic, more home-grown, non-Cairene strata of entrepreneurs means that the only way forward for Egypt has been crushed “in the near term”.

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.

There was something very important in this phase which leads up to the mass demonstrations on June 30th 2013 and the following days: The media played an extremely different role than they did in early 2011 and then again after the military coup on July 3rd. Priot to June 30th, They actually covered these events very clearly and showed the police suppression on the streets

Just to give a little anecdote: Our group Mosireen, that in the past had filmed things that were for us the perspective of the street, almost did not have a role any longer because so much of this repression was being covered by television and news outlets.

To rephrase the question in more concrete terms: Were these mass protests a response to continuing repression and social misery or did the specific nature of the MB as an Islamic party, slowly trying to “islamicise” society, play a role? Initially opposition was growing because repression was maintained and especially because it was covered more than in any other period.

Too many of those who participated didn’t see – for generational reasons, largely – that in order to hit home you have to have some form of political movement. It wasn’t surprising that the Muslim Brotherhood, which had taken part in the protests in Egypt at a late stage, took power: it was the only real political party in Egypt. But then the Brotherhood played straight into the hands of the military by behaving like Mubarak – by offering deals to the security services, offering deals to the Israelis – so people began to wonder what the point was of having them in power. The military was thus able to mobilise support and get rid of the Brotherhood. All this has demoralised an entire generation in the Middle East.

At the lunch, he said: ‘Now it’s time for questions – I’ll start off. Tariq Ali, I read the piece you wrote in the Guardian arguing that Tony Blair should be charged for war crimes in the International Criminal Court. Do you mind explaining why?’ I spent about ten minutes explaining, to the bemusement of the Syrian guests. At the end the ambassador said: ‘Well, I agree totally with that – I don’t know about the rest of you.’ After the guests had left, I said: ‘That was very courageous of you.’ And the MI6 man who was at the lunch said: ‘Yeah, he can do that, because he’s retiring in December.’ But a similar thing happened at the embassy in Vienna, where I gave a press conference attacking the Iraq war in the British ambassador’s living room. These people aren’t fools – they knew exactly what they were doing. And they acted as they did as a result of the humiliation they felt at having a government which, even though the Americans had said they could manage without the UK, insisted on joining in anyway.

The Greeks are being punished not so much for the debt as for their failure to make the reforms demanded by the EU. The right-wing government Syriza defeated only managed to push through three of the 14 reforms the EU insisted on. They couldn’t do more because what they did push through helped create a situation in Greece which has some similarities with Iraq: demodernisation; totally unnecessary privatisations, linked to political corruption; the immiseration of ordinary people.

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.”