Sunday, November 8, 2009

And the rich got richer

Egypt is lauded as a poster child for neoliberal reform. But few of its people have enjoyed the spoils of the boom

Jack Shenker, Sunday 8 November 2009

"....The report systematically destroys the myths and distortions that have driven the country's economic policy for the last two decades – the same myths and distortions which have set the development path for numerous other countries the Global South – and shatters the illusion that soaring economic growth rates have anything to do with widespread, sustainable social prosperity....

So Egypt is now a glitzier, more prosperous land with pharaonic-style riches to match its pharaonic-style leader (now entering his 29th year in power). Except, as the GAFI report inconveniently points out, 90% of the country has yet to see any of the bounty. Foreign investment has been largely channelled into sectors like finance and gas which create few new jobs. While national resources like natural gas have been sold at subsidised rates to the tycoon owners of iron and fertiliser factories, the cost of ordinary commodities like bread and cooking oil has spiralled. In fact since the IMF began hauling Egypt's economy into modernity, Egyptians have got steadily and dramatically poorer: when structural adjustment began 20% of the population were living on less than (inflation-adjusted) $2 a day; today, that figure stands at 44%. In the past decade, when GDP growth was at its strongest, absolute poverty has climbed from 16.7% to almost 20%. Chomsky called neoliberalism "capitalism with the gloves off"; it's hard, looking at this jumble of statistics, to discern anything but a shameless hit-and-run job perpetrated by a tiny band of Egypt's business elite......"

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