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International Socialism, March 1977


Notes of the Month



From International Socialism (1st series), No.96, March 1977, pp.5-7.
Transcribed & marked up by Einde O’Callaghan for ETOL.


THE PENNY loaf is the staple diet of the Egyptian worker. In May last year the government reduced it by one-third in weight, saving on the cost of imported wheat. The massive reaction and threat of uncontrollable protest restored the loaf within three days.

President Sadat did not learn the lesson. Increases in food and fuel prices now result in widespread malnutrition and death. In defence of their precarious existence Egyptian workers will mobilise on a massive level. With the knowledge of May’s events, January’s announced price increases of 5 per cent to 50 per cent on basics amounted to Sadat’s setting the detonator – the explosive results were inevitable.

With a degree of anger and co-ordination which must have terrified Egypt’s rulers, hundreds of thousands of workers and peasants rioted as if to a timetable right across the country. The mobilisations were directed against the government and Sadat personally. The targets -boutiques, casinos, police and railway stations – were the signs of privilege and of state authority. The demonstrations were led by the best-organised groups of workers. Ten thousand steel and armaments workers marched from Helwan into Cairo. Six thousand dockers led the storming and burning of government offices in Alexandria. And when the government announced a curfew, bringing in the elite Saiqa (’lightning’) troops, workers in Cairo carried the demonstrations into the working-class districts turning Shubra, Shubra al-Khaimah, Imbaba and Balaq into ‘no go’ areas.

In the countryside police stations and offices were surrounded, and when they had been evacuated, they were burned. Almost every province was affected within hours. Within three days Sadat’s price increases were withdrawn; a 10 per cent public sector wage increase confirmed. The demonstrations left the streets, having achieved a remarkable victory.

Some four or five thousand have been arrested since the events. They include mild leftists and liberals – anyone against whom Sadat feels he can throw the accusation of ‘communist agitator’ or ‘Libyan spy’. But few have been taken in by this name calling. It is widely admitted that the failure of Sadat’s pro-Western policies, and of his American friends led directly to January’s events.

Egypt’s economic crisis is now without parallel in the world system. The deficit stands at some $16 billion with a gross national product of only £E4 billion annually. The debt has now taken on a life of its own. As described by a leading banker:

‘Every 24 hours we spend two million pounds repaying accumulated loans and the interest on them, for every three million we spend on importing the basic needs of our people and our factories’. (Ibrahim Lutfi, Nasser Bank, Guardian, 26 January 1977).

In a country of over a million square kilometres, only 35,000 sq. km. are cultivable – less than 4 per cent of the total. Though improved irrigation, and projects like the vast High Dam have brought more areas under cultivation, the cropped area per head of population – in effect the amount of food grown for each Egyptian – has declined drastically. Between 1947 and 1975, while the population rose from 19 to 35 million, crop area declined from 0.47 to 0.35 (feddans). Total population at 38 million is now rising at one million a year.

To avoid mass starvation, huge qualities of wheat must be imported and bread sold at a price the poor can afford. (For twenty years a small loaf of unleavened bread has cost one piastre, a penny). It was in order to save £E237 million on the food subsidy that Sadat ordered the January price increases.

The greatest number of slogans shouted during the workers’ demonstrations called on ‘Gamal’ to put right the peoples’ sufferings. Gamal Nasser, ruler of Egypt from 1952 to 1970 seems now to represent a period of greater prosperity to the mass of the people. Yet ironically it is only now that the full extent of Nasser’s failure to develop an independent Egyptian system is becoming evident.

Nasser and the Free Officers came to power in 1952 by deposing the corrupt King Farouk. Their coup had been preceded by huge and violent demonstrations directed against the British occupation – the culmination of a mass movement developed during the war years. Nasser moved to power along a path opened up by the Egyptian masses. But his eighteen years of rule always excluded the people, and in so doing developed and continued a variant of the same corrupt capitalism he had claimed to destroy.

During the fifties Nasser achieved a number of quite historic changes. The coup of 1952 (the ‘revolution’) effectively deposed the big land-owning bourgeoisie who had controlled Egypt for centuries. One of the first acts of the new regime was a land reform which, reallocated large areas to small and landless peasants. And by 1956 Nasser had succeeded in expelling the British occupation forces and nationalising the Suez Canal – breaking the most obvious ties to the old imperial rulers.

But even in these early years, while ‘breaking’ with imperialism ‘on behalf of’ the masses, Nasser left them not only uninvolved but engaged in a policy of active repression. The right to strike was abolished, and those taking independent action were liable to the same fate as the textile workers hanged at Kafr al-Dawwar during the first month of the Free Officers regime.

The ‘people’ or the ‘masses’ were represented in power by the army – the expression of national identity. For Nasser the actual participation of workers was limited to mere formalities. He tried various formulae, from the ‘Liberation Rally’ to the more ambitious Arab Socialist Union (ASU) – still Egypt’s only legal political party – to involve the masses at a local level. But real power was concentrated in the hands of the new ‘military-technocratic’ class – a new state capitalist class.

Soon after coming to power the Free Officers put their own supporters of the army in control of the banks. The process was repeated as more areas of the economy came under state control. This reached its fullest extent during the mid-sixties when Nasser engaged in full scale nationalisation, even down to the retail level. Huge bureaucracies were constructed which amalgamated a clearly identifiable ruling group – the top bureaucracies with army officers and ASU leaders. This period saw the ruthless crushing of all workers’ opposition. Existing trade unions were dismantled, and new unions substituted as part of the ASU. Many bitter industrial struggles took place, left wing currents being cruelly put down, and in the 1965 the leadership of the Communist Party liquidated the Party into the ASU. Remaining Party militants disappeared into underground activity.

But this assertion of the state capitalist class led to deep difficulties. They had destroyed the old structure of private ownership, and assumed responsibility for production and distribution. A massive migration of the old ‘national’ capitalist class, the ‘small bourgeoisie’ took place. The foreign capitalists and middlemen of the imperial days – Greeks, Armenians, Jews – left in droves. With a vast and corrupt bureaucracy, economic dislocation and, an uninvolved peasantry, the first real food scarcities began. The balance of payments deficit grew, and dependence on the US and especially on Russia grew rapidly. Popular anger against the regime increased, drawing Nasser closer to the 1967 solution – war.

The crushing defeat by Israel in 1967 helped lead to a period of reassertion for those of the old ‘national’ capitalist class not eliminated or neutralised by the state capitalist bourgeoisie. They began to develop the corrupt middlemen practices which they had always operated outside the state bureaucracy. Many former land-owners stole back to the countryside buying sizeable areas of land, and again channelling away the surplus produced in the countryside and small industry, monopolising import and export.

After Nasser’s death in 1970, Sadat took control as the representative of these ‘independent’ capitalist elements. Since 1970 there has been an open factional conflict within the ranks of the Egyptian ruling class. This was made quite explicit in 1971 when, in the ‘Corrective Revolution’ of May, Sadat purged hundreds of leading state functionaries, including the two ministers most closely associated with Nasser’s bureaucracies – Ali Sabri and Sharami Gomaa. Removed on the pretext that they had allowed the spread of corruption, they merely made way for a more corrupt and opportunist faction.

Nasser called his nationalisations and reforms ‘socialism’. They had always excluded the masses of Egyptian workers and peasants, and had strengthened the crumbling capitalism of Farouk’s period. Though a temporarily strong new ruling class had had been built, their inability to come to terms with Egypt’s overwhelming economic problems paved the way for Sadat’s return to the crudities of the Western capitalist model.

Since 1971 Sadat has pursued open pro-Western, pro-capitalist policies. After the success of the 1973 war, Sadat made radical changes in Nasser’s policy. He introduced the infitah (’open door’) policy. This was an invitation to Western capitalism to send in the multinational companies, rape the Egyptian labour force, and carry off whatever profits they could accumulate. In return Sadat begged for investment in labour-intensive industry. He has received nothing. Of 400 industrial projects ‘approved’, only 48 have even started. The big Western and other Arab companies have been happier to flood the market with Western goods, sucking out much of Egypt’s domestic surplus, and destroying local small industry.

Sadat has hastened the decline which was already under way in Nasser’s time. His policy is an abject failure. At least, Egyptian workers point out, Gamal could give us bread. Sadat enforced the price increases of January to obtain a pathetic $14 million loan from the IMF. Yet the deficit is some $16 billion! Sadat is desperate, economically he is cornered and his ‘friends’ in the West refuse to help. Inflation has risen to 35 per cent, corruption is rampant, planning is nil, and still the population inexorably rises as food production per head declines. He has tried ‘liberalisation’ in the political sphere. Last year three new political ‘parties’ were sanctioned. In reality they are merely three tendencies of the ASU, of the Left, Right, and Sadat’s own base, the Centre, (each described itself as ‘Nationalist’, ‘socialist’, or ‘democratic’). Even this concession was shown up when hundreds of leading members of the Left ‘party’ were arrested and accused of instigating the January riots. And the two referenda engineered to confirm Sadat’s presidency and his economic policy have kidded no one when their 99 per cent ‘Yes’ votes were announced.

Last August a strike wave began which involved workers throughout Egypt’s major cities. Steelworkers, dockers, cotton and tobacco workers organised for wage increases, and over the allocation of bonuses, muqafa’at or minah. Their activities culminated in the Cairo bus strike, which paralysed the city, bringing production in the main industrial areas to a halt. The strike showed publicly that despite the years of repression Egyptian workers can and do exercise industrial power. Though brutally put down, it was an enormous boost to the confidence of organised workers. It is no coincidence that the best-organised sections of workers led the January demonstrations – whilst their suffering has grown deeper, their ability to respond has developed. We can expect more bitter and massive struggles over the coming period.

Tragically, there is no workers’ party capable of leading such struggles to a successful revolutionary conclusion. Years of repression, of Nasser’s ‘socialism’, and of a completely redundant Communist Party have seen to that. But the recent events revealed an unexpected degree of factory organisation from groups such as the Egyptian Workers Communist Party. Whilst such groups develop we can expect the army, at present still standing somewhat on the sidelines, to be weighing its chances of a successful coup. A move to the right is the most likely outcome. But can even they contain the energy and anger which filled Cairo’s streets last month?

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