Under The Cover Of Democracy

In many Arab countries, especially Egypt, the World Bank makes sure that the country's wealth is in the hands of the governing elite [GALLO/GETTY]


US and Its Allies Assist Will Be Using Neoliberal Economic Policies To Make Sure New Arab Governments Stay In Line.

By Joseph Massad
Last Modified: 08 Jun 2011 14:17
Courtesy Of "Al-Jazeera"

For decades during the Cold War, the rhetoric of US and Western European imperial power was one of promoting democracy around the world. Indeed, as the Soviet model became attractive to many countries in Asia and Africa (not to mention Latin America) ridding themselves of the yoke of West European colonialism, the US system of apartheid, known as Jim Crow Laws or racial segregation, was less than a shining example for people who just liberated themselves from European racial supremacy that was used to justify colonial rule. As is well known, it is this that prompted the United States to begin the road to end its apartheid system, signaled by the famous legal case of "Brown vs the Board of Education" in 1954, which set the stage to desegregate schools in the American South. 

But as US action around the world aimed at eliminating the recently won right to self-determination for the peoples of Asia and Africa under the guise of "Western democracy" fighting "totalitarian communism", which left a trail of millions murdered by the US and its allies (starting with Korea and moving to the Congo, to Indonesia, Vietnam, Cambodia, and Laos, and from Guatemala to Brazil to Argentina, Uruguay, El Salvador, and Chile, to Southern Africa and the Middle East), the cruel US invasions of Iraq and Afghanistan in the last decade have hardly changed this anti-democratic trend. Yet two important victories are always touted by supporters of US foreign policy on the democratic front: namely, the fall of the Soviet Union and the ensuing "democratisation" of Eastern Europe, and the end of Apartheid in South Africa. The US hopes that its policies in both places will guide it to achieve similar ends for those uprisings of the Arab world that it cannot crush.

Profits and Impoverishment

The people of the Eastern bloc wanted to maintain all the economic gains of the Communist period while calling for democratisation. The US, however, sold them the illusion of "Western democracy" as a cover for their massive US-imposed impoverishment and the dismantling of the entire structure of social welfare of which they had been beneficiaries for decades. Thus in a few short years, and through what Naomi Klein has dubbed the "Shock Doctrine", Russia went from a country which had less than 2 million people living under the international poverty level to one with 74 million people languishing in poverty. Poland and Bulgaria followed suit. As billionaires increased and the margin of profit for US corporations skyrocketed in the former Eastern bloc, with the help of illustrious imperial organisations like the World Bank and International Monetary Fund, the US, under international pressure, moved steadily to conclude a deal to end political apartheid in South Africa.

If the people of the Eastern bloc had to sacrifice their welfare states and their livelihoods in exchange for the outright pillage of their countries by Mafia-style capitalism, the people of South Africa were sold political "democracy" in exchange for the intensification of economic apartheid and the complete surrender of the country's economic sovereignty. While the business class became infinitesimally more racially diverse (as its US precedent pretended to do since the 1970s), the impoverished classes remained racially uniform. Today's South Africa is so saddled by debt and is signatory to so many economic agreements and protocols, that it can neither redistribute the racialised private property of the country (protected by its constitution), anymore that it can provide wage increases under its obligations to the IMF, which insists on wage "restraint". The massive racialised poverty of the country has only deepened its economic apartheid under the cover of the "end" of political apartheid.

In the Middle East, the Oslo agreements, signed around the same time that US-style democracy was being imposed on Eastern Europe and South Africa, were even worse. The Palestinian Authority moved (under US and Israeli instructions) to demobilise Palestinian civil society, which was enormously strengthened during the first intifada. Western-funded non-governmental organisations appeared on the scene in force. The NGOs co-opted the intelligentsia, the technocracy, and most of all erstwhile activists into the service of a Western agenda that rendered these foreign NGOs the new local "civil society", while Western governments financed the corrupt Palestinian Authority that continued to collabourate with the Israeli occupation. Poverty reigned supreme in much of the West Bank and all of Gaza and continues to destroy the lives of Palestinians there. Iraq, meanwhile, was being also transformed from its reduction to the stone age by US bombs into a US-imposed mafia-style "democracy" while the entire welfare benefits that existed under Saddam were withdrawn. Iraqi oil was handed over to American corporations in the ongoing American pillage and destruction of that country.

Other Arab countries, especially Egypt, were being flooded with Western-funded NGOs as the IMF and the World Bank were ensuring that local wealth is firmly in the hands of international capital and a small, local, subservient business class that supports the local dictatorships. A large number of women and labour activists, human rights and political activists, minority rights and peasants rights activists were no longer to be found defending the poor and the oppressed among whom they lived, but were now found on the payroll of these Western-funded NGOs, masquerading as civil society. While this demobilisation of Arab civil society ultimately failed to forestall popular Egyptian and Tunisian rage against two of the most corrupt regimes of post-independence Asia and Africa (or even Latin America), the US and its Saudi and Qatari allies are devising a new economic package to "support" the recent uprisings, especially Egypt's larger and much more important economy. 

Strengthening The Rich

We got wind of US magnanimity early on. Indeed on the first day of the ouster of Mubarak, whom the Obama administration supported till his very last day in office (and beyond), the New York Times reported that "the White House and the State Department were already discussing setting aside new funds to bolster the rise of secular political parties."A few days later, on 17 February, 2011, Secretary of State Hillary Clinton declared "I'm pleased to announce today that we will be reprogramming $150 million for Egypt to put ourselves in a position to support our transition there and assist with their economic recovery," she told reporters. "These funds will give us flexibility to respond to Egyptian needs moving forward." A month later on March 16, Clinton declared on behalf of the US government that "we also think there are economic reforms that are necessary to help the Egyptian people have good jobs, to find employment, to realise their own dreams. And so on both of those tracks - the political reform and the economic reform - we want to be helpful."

Indeed preparations " to be helpful" were completed by the Obama administration and its European and Saudi-Qatari allies by May 19, the date Obama delivered his speech. He declared:

First, we've asked the World Bank and the International Monetary Fund to present a plan at next week's G8 summit for what needs to be done to stabilise and modernise the economies of Tunisia and Egypt. Together, we must help them recover from the disruptions of their democratic upheaval, and support the governments that will be elected later this year. And we are urging other countries to help Egypt and Tunisia meet its near-term financial needs.

If this was not enough, Obama offered a laughable gimmick to ease the $35 billion debts of Mubarak's Egypt on the Egyptian people by "relieving"post-Mubarak Egypt "of up to $1 billion in debt and work with our Egyptian partners to invest these resources to foster growth and entrepreneurship."But relief of $1 billion must be countered with help to indebt Egypt further. So Obama, in the same breath and without irony, declares, "we will help Egypt regain access to markets by guaranteeing $1 billion in borrowing that is needed to finance infrastructure and job creation…we're working with Congress to create Enterprise Funds to invest in Tunisia and Egypt."

As the impoverishment of Eastern Europe created massive wealth for new local elites and their US and Western European corporate masters, Obama asserts that America's financial assistance "will be modeled on funds that supported the transitions in Eastern Europe after the fall of the Berlin Wall. The Overseas Private Investment Corporation (OPIC), a US government finance institution, will soon launch a $2 billion facility to support private investment across the region. And we will work with the allies to refocus the European Bank for Reconstruction and Development so that it provides the same support for democratic transitions and economic modernisation in the Middle East and North Africa as it has in Europe." But this is not all, the United States will also "launch a comprehensive Trade and Investment Partnership Initiative in the Middle East and North Africa." Recognising that Saudi and American avarice was such that all oil profits have found themselves pumping the European and American economies since the 1970s to the detriment of the region itself which languished under IMF-imposed structural adjustment policies (cuts in subsidies and wage decreases for the poor, increase of subsidies for the rich, restricting the rights of the working class, ending protectionism and selling the country off to international capital, raising food prices), causing the ongoing upheavals, Obama now wants a portion of the oil profits to be reinvested within the Arab world. He explained that

We will work with the EU to facilitate more trade within the region, build on existing agreements to promote integration with US and European markets, and open the door for those countries who adopt high standards of reform and trade liberalisation to construct a regional trade arrangement. And just as EU membership served as an incentive for reform in Europe, so should the vision of a modern and prosperous economy create a powerful force for reform in the Middle East and North Africa.

Obama along with France and Britain moved quickly. At the end of May, leaders of the Group of 8 wealthiest industrialised nations pledged to send billions of dollars in aid to Egypt and Tunisia. France's Sarkozy declared that "he hoped the total aid package would eventually reach $40 billion, including $10 billion from Saudi Arabia, Qatar and Kuwait". Meanwhile, Qatar has been talking to oil-rich Gulf partners about a new plan to create a Middle East Development Bank to support Arab states in transitions to democracy. Its plan has been inspired, according to newspaper reports, by the European Bank of Reconstruction and Development "that helped to rebuild the economies and societies of eastern bloc countries at the end of the cold war." The projected Middle Eastern development bank reportedly envisages tens of billions of dollars of yearly lending for political transitions. Qatar is seeking the support of Saudi Arabia, Kuwait and the United Arab Emirates for the initiative. Indeed the Saudis had already made a $4 billion grant to the Egyptians and the IMF just announced a $3 billion loan to the country. Yet, Youssef Boutros-Ghali, Mubarak's finance minister, who had been lauded by none other than the IMF as a most efficient finance minister, and who was named in 2008 by the IMF itself as chairman of its International Monetary and Financial Committee, has fled the country and was just sentenced to 30 years in prison by an Egyptian court on corruption charges. A week before the fall of Mubarak last February and before his flight from the country, Boutros-Ghali resigned his IMF position. But the IMF is not deterred. Its "help" to Egypt will continue unhindered by such trivial matters. Moreover, as part of the effort to crush the popular demonstrations and the demands for democratisation in Jordan, Saudi Arabia also granted $400 million "to support Jordan's economy and ease its budget deficit". Saudi Arabia and the Gulf Cooperation Council (recently dubbed the Gulf Counter-revolutionary Club) had also extended, a few weeks earlier, an invitation for the only two surviving monarchies outside the Gulf, Jordan and Morocco, to join as members.

Neutralising The Poor

But if the US deal in Eastern Europe was to impoverish the majority of people under the cover of democracy so that US businesses can pillage their economies, and if its deal in South Africa was about safeguarding and maintaining the same level of racialised pillage of the country by South Africa's whites and the international business partners also under the cover of democracy, what is the form of political-economic exchange being transacted in the Arab world?

Clearly in countries where the US-Saudi counterrevolutions have triumphed, the aim is to maintain the same level of imperial pillage led by the US while pacifying the mobilised population and strengthening local elites (Bahrain, Oman, and Jordan are the primary examples here) or rescue the retinue of collapsing dictatorships (whether allies of the US or not) to lead regime transition and resume their partnership with the US politically and economically (Libya, Yemen, and even Syria are primary examples). But what about Egypt and Tunisia where a substantial number of the entourage of the overthrown regimes are also targeted by the uprisings for their corruption and complicity in the violence unleashed by the anciens regimes? It is there where the US-Saudi axis wants to focus its efforts.

Business elites who miraculously escaped formal charges in Egypt, and they are legion, have expressed much concern about demonstrations and strikes disrupting the economy (and their profits). Billionaire Naguib Sawiris, who fancies himself a supporter, if not a leader, of the uprising, and whose father and brothers were also transformed into billionaires in a few short years after they partnered with USAID during Sadat's "infitah"or "open door" policy, and especially following the US invasion of the region in 1990/91, along with many other "honest" businessmen and women are ready to carry the torch for the US in "democratic" Egypt as they had done faithfully under Mubarak. Sawiris founded a new political party and now refuses to join the ongoing Friday demonstrations, which, he claims, are weakening the economy. He recently declared that "it was wrong to accuse all of the country's businessmen of wrongdoing,"insisting that "many are honorable people who helped create jobs for Egyptians". The US and Obama have also been celebrating young business executives like the naive Stockholm Syndrome sufferer Wael Ghonim (Stockholm Syndrome is the only acceptable excuse for Ghonim's spending the majority of his famous TV interview crying and defending, rather than condemning, his secret police interrogators). Ghonim was touring the US speaking to international bankers as well as to World Bank economists, as a "leader" of the Egyptian uprising at the behest of the Google corporation itself.

But most Egyptians and Tunisians, unlike East Europeans under Communist rule, are poor already. As the main form of apartheid that rules Egyptians and Tunisians, unlike their South African black and poor counterparts under political Apartheid, is an economic and class apartheid, what then would granting US-style democracy to them be in exchange for?

The answer is simple. There is an increasing understanding among US policy makers that the US should ride the democratic wave in the region in those countries where it cannot crush it, and that in doing so, it should create political conditions that would maintain the continued imperial pillage of their economies at the same rate as before and not threaten them. Saudi money followed by American money and IMF and World Bank plans and funds are all geared to supporting the business elites and the foreign-funded NGOs to bring down the newly mobilised civil society by using the same neoliberal language of structural adjustment pushed by the IMF since the late 1970s. Indeed, Obama and his business associates are now claiming that it is the imposition of more neoliberal economic policies that is the main revolutionary demand of the people in Egypt and Tunisia, if not the entire Arab world, and which the West is lovingly heeding. That it is these same imperial policies, which were imposed on Poland by the IMF (and produced Solidarnosc in 1980), and ultimately led to the fall of the Soviet Union, as they marched onwards to impoverish the entire globe, with special attention to Africa, the Arab World, and Latin America, is glossed over as socialist whining. In this sense, the US will ensure that the same imperial economic policies imposed by international capital and adopted by Mubarak and Ben Ali will not only be maintained, but will be intensified under the cover of democracy.

Moves to limit economic protests and labour strikes are ongoing in Egypt and Tunisia. Once elections are held to bring about a new class of servants of the new order, we will hear that all economic demands should be considered "counterrevolutionary"and should be prosecuted for attempting to "weaken" if not "destroy" the new "democracy". If, as is becoming more apparent, the US strikes alliances with local Islamist parties, we might even hear that economic protests and opposition to neoliberal imperial economic policies are "against Islam." The US-imposed "democracy" to come, assuming even a semblance of it will be instituted, is precisely engineered to keep the poor down and to delegitimise all their economic demands. The exchange that the US hopes to achieve by imposing some form of liberal political order on Egypt and Tunisia is indeed more, not less, imperial pillage of their economies and of the livelihoods of their poor classes, who are the large majority of the population. The ultimate US aim then is to hijack the successful uprisings against the existing regimes under the cover of democracy for the benefit of the very same local and international business elites in power under Mubarak and Ben Ali. How successful the US and its local allies will be will depend on the Egyptian and Tunisian peoples.

Joseph Massad is Associate Professor for Modern Arab Politics and Intellectual History at Columbia University in New York.