The Happy Arab News Service

Monday, March 5, 2007

Lame Tiger on the Nile - II

For the lack of time i will post a somewhat old report by AFP that naturally follows my series about lame tigers, broken leg gazelles and other crippled animals. Here is a list of the previous posts:

The Arab Reform

Lame Tigers and Broken-Leg Gazelles

Lame Tiger on the Nile

People with some background in economics and the history of economic development will find this article providing more than enough cues to the actual situation of the reforms in Egypt. It seems that Egypt experiences problems across major sectors of its economy. The scale of state interventionism practiced by the Nasserists was apparently huge given that Egypt tried to establish state control even over the textile industry, the sector that is occasionally ignored even by hardcore socialists who prefer instead to concentrate on heavy industry and infrastructure.

The labor intensive textile industry is perfectly suited for countries with low wages and many economic tigers from South Korea to Singapore started their careers as textiles' tigers. The fact that Egypt finds it difficult to reform even that sector supposed to be the growth engine of its economy points to the complicated situation of economic reforms in Egypt.

Though the article downplays the role of the Muslim brothers, in my other posts I was suggesting that the real conflict in Egypt will be played along the lines separating the old political elite turned free market reformists and the Muslim brothers who use populism, trade unions and ride the wave of mass dissatisfaction that naturally follows the initial stages of any serious economic reform.

I would suggest that this analysis has applications beyond Egypt. Contrary to what many people think the old guard of the Arab world is not universally such a hopeless case and it clearly gained some sanity over the last years. Some Arab leaders like Ghaddafi seem to have internalized the lessons of the collapse of the Soviet Union and of the economic triumph of the West. Whether they are responsible or not for running for decades very oppressive regimes, the old political elites of the Arab world right now not necessarily represent the forces of stagnation and backwardness in their societies. In many cases they are running societies that in terms of insanity and backwardness squarely beat their rulers on almost every point. Those who think that the future of progress and democracy in the region lies with popular uprisings and mass demonstrations clearly have little idea of what the so called Arab street is.

And here we go...

Egypt gets past one strike - but awaits the next
Workers fear impact of reform
By Agence France Presse (AFP)

Saturday, February 10, 2007

KAFR AL-DUWAR, Egypt: A wave of strikes against the Egyptian government's attempts to reform its ailing textile sector has ended after five days when the state agreed to wage concessions for workers at two of the country's biggest cotton mills. The state-owned textile industry has been central to the government's economic reform program - blamed for causing consumer prices to rise 160 percent in the past two years - has long been one of the biggest money-losers in the country, with many factories plagued by poor management, old equipment, and massive debt.

Among them is the crumbling spinning and weaving factory in the industrial Nile Delta town of Kafr al-Duwar, whose chairman, Ali Ghalab, said the company was more than $500 million in the red.

"We used to give bonuses to the workers when the company was doing well but not anymore," Ghalab said.

Such cutbacks helped spur the Kafr al-Duwar factory's 11,700 workers to strike, and on Thursday, the fifth day of the industrial action, the provincial governor himself, Mohammed Shaarawi, paid a visit to the factory. The angry crowd of 1,000 workers occupying the plant fell silent as the governor stepped out of his limousine, accompanied only by a few officials.

Shaarawi outlined a list of decrees that more or less met the workers' demands for more money and better medical care, and then told them he expected them at work Saturday.

"It could be better, but it might turn out all right," said a grizzled worker looking on as the others cheered. "He gave us what we wanted, but only indirectly, because the other companies will want the same."

Soaring inflation - a mere 4 percent in 2004 but reaching 12 percent in the first weeks of 2007- and the specter of privatization have terrified workers, who fear the changes will mean lost jobs or lower wages.

A second eight-day strike that ended this week in the Delta town of Shibeen al-Kom was at a spinning plant that had just been sold to Indian investor IndoRama International.

In December, 15,000 workers from the Mahalla textile plant, one of the largest in the world, went on strike demanding unpaid bonuses. When the government acquiesced, new strikes soon erupted across the country, from poultry factories to cement plants to refrigerator companies.

For a government wooing investors with stories of low-cost, skilled labor, the strikes are dangerous and have been blamed on outside agitators.

"The Muslim Brotherhood stands behind every single problem in every factory," charged Ghalab, referring to the largest opposition movement in the country.

But according to leftist labor activist Kamal Abbas of the Center for Trade Union Rights, the ineffectiveness of the government-controlled labor unions is the whole reason the workers have had to resort to this rash of wildcat strikes.

"The problem is that no one can speak for them," he said. "No one negotiates for them with owners, whether private sector or the government."

The government-run labor unions in turn accuse labor activists like Abbas of being behind all the strikes.

"The union doesn't care about us, they have their own concerns," said Khaled Ali, a Kafr al-Duwar worker .

He showed a pay stub that set his monthly salary at $50, which when augmented by various company bonuses reached $88.

"I am older than most of you and I remember this factory in its days of glory and together we will restore it," the governor concluded, telling the workers a restructuring plan promised six months earlier by the ministers of investment and industry offered hope.

"They've been saying there is plan for the last three years," one worker said with exasperation, "but they never actually implemented it." - AFP


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