POINT 3. THE SECOND STAGE OF THE REVOLUTION. THE FIGHT FOR POLITICAL & ECONOMIC SOVEREIGNITY

POINT 3. THE SECOND STAGE OF THE REVOLUTION:

THE FIGHT FOR POLITICAL & ECONOMIC SOVEREIGNITY
HAZ, February 10, 2011

“A genuinely representative Egyptian government [would] reject the slavish pro-American, pro-Israeli clientelism of its predecessor,” Dr. Hudson writes. “That need not mean that Egypt will become a spearhead for anti-Western, anti-Israeli projects. On the contrary, a genuinely legitimate Egyptian government could set a prominent example for non-authoritarian, participatory government throughout the region and play a decisive role in leading the Middle East out of its present dysfunctional condition.”. Michael Hudson. “Egypt on the Brink: The Arab World at a Tipping Point?”. January 29, 2011.

Egypt has three major general problems

A) At political level we have:

First a lawless state: obsolete constitution (centralist presidentialism) that procreates autocratic rulers.

Second, a political regimen without the minimums of democracy (no respect for civil and political rights of their citizens, not real separation of powers -legislative, executive and judiciary with checks and balances-, no fair elections.

Third, no respect for human rights (crimes against humanity have been committed over and over).

Fourth, rampant cronyism and scandalous corruption (The Guardian, Al Jazeera and Egiptian bloggers informed that 70 billion has been embezzled by Mubarak’s family with the complicity of the VP and those who run the central national bank and foreign bankers who are hiding the fortune stolen to the Egyptian people).

ALTERNATIVE

It is required a Transitional government that call elections for a National Constitutional Assembly to reform the current Constitution and once approved, call for immediate democratic elections to establish a new regimen.

B) At economic level we have:

B.1) Explosive economic crisis. In 2010 Egyptian had the lowest income per capita in the region, if we compare their GDP per capita with Iran, Turkey, Saudis and Israel, and the highest poverty rate (20% up). Both figure indicate that the official rate of unemployment (10%) is faked. The gap between rich and poor was also one of the highest. These statistics gathered from the WB (collapsed by the website www.allaboutmideast.com) speak for the explosive environment that give base to the social uprising.

B.2) Huge foreign debt and negative trade balance. Egypt has a foreign debt that is growing faster in the region: in the year 2000 it was 27 billion and in 2010 it was 35 billion in USD. This explains the cuts in social spending (education, health and Medicare). Besides, Egypt has the worst trade balance in the region: negative -23%. Both (foreign debt effects and negative trade deficit) indicate that Egypt has stagnant economy. That explains the inexistent job market for young people, one of the main actors of people’s rebellion.

Economic reality & History motivating people.

It is disturbing: people and soldiers of a country located just in the best commercial and geopolitical world spot, obligated to take the crumbs of the big business.. The Suez canal and the SUMED Pipeline that cross Egypt provides literally the biggest arteries of crude oil that fuels the European and the US economy. According to the US Energy Information Administration EIA, Almost 35,000 ships transited the Suez Canal in 2009, 10 percent were petroleum tankers.In November of 2010, petroleum (both crude oil and refined products) as well as liquefied natural gas (LNG) accounted for 13 and 11 percent of Suez cargos, measured by cargo tonnage, respectively. Total petroleum transit volume was close to 2 million bbl/d, below 5% of seaborne oil trade in 2010. (http://www.eia.doe.gov/cabs/world_oil_transit_chokepoints/Suez.html).

The revenues coming from this business did not go to the people nor to the army who in 1956 nationalized the Suez Canal with Naser, nor to those who gave their life to defended it when the Brits and Israelis declared war to Egypt after the canal was nationalized. If the American army did not invade Egypt was because the Russian threat to come too, and they make a clear warning by launching the Sputnik.

Today wars are different (the old ones drain the economy), today we have a financial war in process. China is one of the biggest user of the Suez canal and they want their business be done in SDRs, not in dollars. SDRs were created in 1969 by the International Monetary Fund to use as a reserve currency as the dollar tottered. SDR is a kind of synthetic currency whose value is determined by a basket of major currencies ($, Yen, Euro and Pound). See Wall Street Journal, march 24, 2009 http://online.wsj.com/article/SB123785404446020041.html

Since early 1970s, some banks took deposits denominated in SDRs and some companies even issued bonds in the currency. But the market always remained small, the main use of SDRs today is to account for transactions between the IMF and its member nations. If the US insist in creating chaos in Egypt with Mubarak and the CIA-VP, they will push harder for SDR as main currency for international trade. 1970s was a warning more powerful than the sputnik in 1957.

Where is the money of the oil-trade business that cross the Suez canal?. It went to the pockets of Mubarak autocratic clan. This is the source of the 70 billion they stole from Egyptian people. Egyptians and the army were humiliated when Mubarak made them to obey US commands and to knee in front of Israelis who twice declared war against Egypt. The current uprising is loaded with these memories. Egyptian do not need Mubarak, nor Suleiman (the CIA agent) to take control of the nation. This is the meaning of the 2nd stage of the revolution, once Mubara and the VP (CIA agent) are out. The struggle will be for political and economic sovereignty. The aim will not be to retaliate, it will be to create a new democracy in which all Egyptian enjoy a decent life with peace.

b.3 the two biggest economic problems today

Egypt has to define two strategies, the first against neoliberal policies, and the 2nd against the Quantitative Easing (QE) that are threatening to disrupt emerging economies.

Quantitative Easings

The US has designed these QEs (the printing of billions of dollars) to flood clients states with credit in the hands of speculators to go buy foreign resources, real state, public and private infrastructure, bonds and corporate stock ownership with money that contain behind debt. It is a huge Ponzi scheme in process since they use debt money to buy resources abroad. It is also a device to sell the US debt among their partners with faked dollars by just taking advantage of the dollar as national reserve (central bank deposits) and the currency for trade business. So the US speculators can buy all those shipping companies (or others) in the Suez Canal that are in bad shape or buy the shares that Mubarak’s family has in this trade business as a condition to protect the part of the 70 billion he stole and is in dollars (maybe he bought US Treasury Bonds). The Germans want the part that is in euros too. It does not matter what they do with this puppet. What matter is what to do with the speculators coming with huge amount of credits flooding Egypt with QE money.

First, What is the meaning of neoliberalism? Why it is a big major problem?
Why we said that the Egyptian uprising is the result of the implementation of neoliberal politics?

Why? because the neoliberal formula prescribed the following:

1- Over protection of foreign capital investment (not national nor social capital) and not matter if foreign capital is speculative. This policy comes with severe criminalization of debt payment defaults and the elimination of the right to bankruptcy for small business n common people, this right is reserved only to big bankers via bailouts, currency devaluation and more taxes.

2- Privatization of State and public resources

3 Cuts in State social expenses (education, health, etc).

4- Tax policy in favor of the rich. The state is obligated to widen the tax base instead of taxing the rich. This implies the elimination of small informal business for not paying taxes but instead the tax evasion of the rich is protected.

5. Manipulation of bank interest rate and currency parity with dollar. The State central bank (ministry of economy n staff) is controlled by big financial corporation in New York and their job is to control domestic credit and raise interest rate to attract foreign financial inflows. The other job is to manipulate the currency parity rate with the dollar in their interest, not the national one, plus the usual functionalist work. [So people in Egypt or elsewhere can elect their puppet, but the Ministry of economy, Interior (the one who deals with the army and police), exterior (the one who deal with lobbyist of big corp in Washington) and Press-communication (if there is one) is controlled by the US agencies and the US embassy.].

6. Trade liberalization (at convenience of the US corp). Egypt can sing FTA with other nation but not with the privileges given to US free trade agreement. Besides, this freedom best serve the rich, nor poor and middle classes, these ones do not have the same leverage to associate and get similar advantages (if they find a niche) since the big circuits of trade are already monopolized by big corporation. So it is “free” trade with “exclusion” and exclusive trade privileges.

7. Full liberalization of foreign capital inversion (free to get in and free to get out whenever they one). They can dispossess native population from their land and water, pollute the environment and eliminate the protesters with thugs criminal organizations and private mercenaries from abroad.

8. Deregulation of labor policies, not minimum salaries nor adjustments according to profits. Child labor under the table is allow (sub-contracts and outsourcing contracts) and social benefits (helath among others) only if labor is trapped by private for-profit insurers co. (now this policy is being obligated in the same US, they are getting the taste of the poison they spread abroad).

9. Property right at convenience of big corp. Monsanto and other US corp can get inside the country, still cultural knowledge (the how to) on natural resources and patented as their own. They can modify the genetics and inside circuit of plants-animals reproduction system and create a similar one to replace the natural, if the maximize profit with them. The fact is that the right of private property is eliminated with the neoliberal policies. The foreclosures scandal in the US left millions of people without their house property.

All these “profit maximization” policies are called neoliberal. They were designed and implemented abroad since 1985 as the result of the so named “Washington Consensus”. Its implementation caused the current crisis in Egypt and many economic crisis abroad. The US is now victim of their own medicine. In the US there are big lobbies behind the corporations that profit from this economic model. They finance elections, bribe presidents and senator and create the type of mess we have right now all over the world. Egypt can escape the plague if now they create a new economic and political system.

ALTERNATIVES TO NEOLIBERALISM

1. There are many (the US had their own, the Glass Steagle Act, it was des-implemented). The one that I want to propose has two roots a) The Alternatives for the Americans 2001, that has been used as a manual by most people’s uprising in Latino America and b) the Transition to Market-Based Democracy, an adaptation of the previous one by the German Institute Bertelsmann in 2003. The later introduce a concept that they did not elaborate: “Socially responsible”, a concept that is here underscore as a statement that condition the market-based democracy. So the alternative proposal to neoliberalism can be called SOCIALLY RESPONSIBLE MARKET-ORIENTED DEMOCRACY. (SR-MOD) Why?

1.1 To rid off the wrong assumption that market and democracy is an impossible match, as some socialist thinkers suggested. For us “ostracism” is an impossible match with reality. Market is an inescapable reality, as it is the need for capital.

1.2 The problem with current market is that it has been capture by big monopolist corporations oriented to speculation. That is what has to be controlled. By whom? .. by democratic states representing the nation. The claim of "None state control", has no sense, nothing to do with reality, the real fact is that big corporations need state bailouts and state rules on bankruptcy. Non state-society does not exist at all. Do we accept the principle of “profit maximization”. Yes, under the limits of State democratic rules. Speculative capital must be subject to national and international regulations.

1.3 The Washington Consensus should be modified with the Egyptian consensus resulting from deliberations in the National Constitutional Assembly called by the transitional government to draft the new Constitution as soon a Mubarak and his VP Suleiman are deposed. This is what IS called socially responsible, market oriented democracy (SR-MOD). With this premises in mind what are the possible scenarios in debate? I assumne their leaderS will elaborate an ACTION plan that could contain the following points

MINIMUM PLAN WITH SEVEN POINTS TO KEEP ALIVE THE REVOLUTION

MAIN OBJECTIVE

A socially responsible market oriented democracy departs from the principle that the market should be regulated at the national and regional level (other Arab states) in the interest of peace, parliamentarian democracy, sustainable development (the one that solve present needs and demands of society without compromising the needs of future generations) and economic stability (starting with the adoption of regional or international currency other than dollar). This implies a shift from over emphasis on exports based on exploitation of natural resources (raw material) and workers, to a national production-development rooted in domestic capital and in full respect of the rights of workers and human rights.

MINIMUM PLAN

1. Zero interference from international financial corporations and their military apparatus over the Egyptian State-Nation structures at economic and political level. This implies the immediate evacuation of US military troops. Egypt should not have any prison center for torturing innocent people. Immediate liberation of all political prisoners.

2. Investigate and Confiscate the 70 billion stole by Mubarak clan to pay the foreign debt and file him before International courts for crimes against humanity and corruption. This implies the setup of a Committee for Truth and Reconciliation

3. Voice and decision making power to people on the bases on information gather from direct and live broadcasting of all negotiation in the government palace regarding the economic future of Egypt

4. Strengthen environmental standards and labor rights protection for all, regardless of their immigrations status, gender, race or religious faith.

5. Immediate negotiation to adopt policies that implies financial shift from speculation to long term investments in productive activities

6. Immediate call for proposals to close the gap between rich and poor and regional disparities

7. Separation from religion and state. The right to have or not to have a religion should be protected for all citizens of Egypt. In public schools secularism and science should prevail.

Final note

The key for Egypt and Arab countries to open a path inside the global current context is to promote democratic governments via peaceful means, rather than living the future in the evil hands of the market forces and its current profiteers. Egypt should foster this aim and coordinate their actions with other movements at regional level.