Month: October 2016

Independent opposition to the IMF

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(To be published in Arabic for Arabi21)

On October 9th, the IMF was scheduled to announce the release of the first tranche of money from a $12 billion loan to Egypt.  Approximately 2 weeks before the announcement was to be made, individual Egyptians self-mobilised, without instruction from party leaders or groups, and began sending messages to the IMF representative in Egypt, and to the local offices of multinational companies, expressing opposition to the loan and its accompanying Austerity program.

 

Messages warned that, since the neoliberal policies demanded by the IMF are designed to benefit multinationals and foreign investors, the revolutionary movement would impose consequences on the private sector if the loan proceeds.  A few days before October 9th, the IMF announced that the decision on the loan would be indefinitely delayed. The American, British, and Canadian embassies issued alerts to all their citizens in Egypt to beware of possible risks around the 9th of October.  The Ministry of Finance began hiring recent graduates to open at least 2 Facebook accounts each to promote a positive opinion about the loan on social media.

 

In short, the people forced their way to the IMF negotiating table.

 

Christine Lagarde, Head of the IMF, suddenly began to include mention of the Egyptian people when discussing the policy reforms required by the loan, “I think the measures that the Egyptian authorities…and the Egyptian population are considering in order to improve the economy are the right ones”, she said in an interview with Al-Jazeera.  As there has not been any referendum on the loan in Egypt, and the population had no role in negotiating the agreement with the IMF, Lagarde is implicitly acknowledging that, by their collective action, the Egyptian people have suddenly made themselves part of an equation from which they had been very deliberately excluded; and the acquiescence of the population is now an issue for the IMF, though it never has been before.

 

This is a significant development at the most critical moment Egypt has faced since 2011.  This will be the biggest loan the IMF has ever granted anyone in the region, and it will force policies on Egypt that will drastically undermine the country’s potential for economic sovereignty and political independence, regardless of who may sit in the presidential palace.  The Islamist opposition has been uniformly silent, conspicuously so, even the new Ghalabah Movement, which has organized mass protests for November 11th and claims to represent the poor and downtrodden of Egypt. Nevertheless, the people took the initiative against the loan despite the apparent apathy of their leadership.  All the opposition parties should take note of this fact.

 

Frequently I have been told by Islamists that the ordinary people cannot understand the complexities of economics.  If the collective action of the Egyptian people, acting as individuals to oppose the loan, was not sufficient to disprove this theory, we saw recently the powerful comments by a tuk-tuk driver in Egypt eloquently summarizing the economic situation in the country, better than anyone from the Islamist elite.

 

It is well past time for the Islamist opposition to begin finally to address the real policy issues that are intensifying the suffering of the Egyptian people.  It is time to stop playing politics and jockeying for position, and it is time for them to use their platforms to discuss the specific issues that are affecting the daily lives of the masses, because the masses are not waiting.

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الاستثمار ليس دائمًا أفضل شيء         Investment, not always good!

كيف يمكن للاستثمار أن يكون شيئًا سيئًا؟ ألا يخلق فرص عمل؟ حسنا، الاستثمار ليس دائمًا أمرًا سيئًا، ونعم هو قد يخلق فرص عمل. ولكنه أيضا ليس دائمًا شيئًا جيد، فهو غالبًا ما يقضي على فرص عمل أكثر من تلك التي يخلقها. فعندما تتحدث عن الاستثمار الأجنبي المباشر، عليك أيضا أن تضع في اعتبارك أنه أيا كان ما تربحه تلك الشركات، فهو يتدفق خارج اقتصادكم، لا إلى داخله. فالاستثمار يمكن أن يكون في كثير من الأحيان مثل الحقنة التي تعتقد أنها غرست في ذراعك لإدخال الدواء، ولكنها في الواقع تسحب دمك.

وعندما يأتي الاستثمار من خلال عملية الخصخصة، فهذا يعني أن خدمات ومرافق عامة هدفها خدمة الصالح العام، وبالتالي هي من صميم مسؤولية الدولة، ستتحول إلى مؤسسات هادفة للربح. وكل القرارات المتعلقة بهذه الخدمات ستهدف بشكل حصري لزيادة الأرباح وخاصة أرباح المساهمين، دونما أي اعتبار للمصلحة العامة. وهؤلاء المساهمين لديهم حصص في شركات أخرى، ولهذا فتذكروا جيدًا أن اتخاذ قراراتهم سيدعم بشكل أو أخر ربحية شركاتهم هذه أيضا. لذلك، على سبيل المثال، إن تم بناء طريق أو كوبري للمشاة، فلن يتم اتخاذ هذا القرار لأن بنائه منطقي أو أن هناك حاجة ملحة وحقيقية له، أو لآنه يخدم مصالح السكان، ولكن فقط سيتخذ القرار إذا كان يعود بالنفع على مصالح المساهمين. فعليك أن تتخيل تأثير هذا النوع من التفكير على المسائل أكثر وأكبر أهمية، مثل التعليم، والرعاية الصحية، والأمن الغذائي، والحصول على الطاقة والمياه؟

لن تتخذ هذه القرارات فقط من قِبَل الأجانب، ولن تتخذ فقط من أجل الربح، ولكنها ستتخذ خصيصًا من أجل إفادة الأجانب.

صندوق النقد الدولي الحكومة يطالب بخفض الإنفاق العام؛ أي أنه يطالب بالتوقف عن إنفاق أموالك عليك!  وبدلا من ذلك يتم إنفاق أموالك على تسديد دفعات القروض الدولية، وهذه القروض ستنفق في المقام الأول على دعم الاستثمارات الأجنبية والاستثمارات التي من شأنها أن تحول الخدمات والمرافق العامة إلى مؤسسات قطاع خاص هادفة للربح وهذه أيضا سيكون هدفها أن تأخذ أموالك. ثم يقوموا بفرض نظام ضريبة القيمة المضافة التي سترفع أسعار السلع الاستهلاكية، فيأخذون المزيد من أموالكم. ثم يخفضون من قيمة عملتكم، مما يعني أنك ستضطر لدفع المزيد من أجل أيا كان ما تشتريه، فيأخذون أكثر وأكثر من أموالكم.

عندما تدخل شركة متعددة الجنسيات في بلدكم، فتذكروا أننا نتحدث عن مؤسسات لديها ميزانيات أكبر من بعض البلدان؛ ففي هذا الحين سنجد أن الشركات المحلية غير قادرة على التنافس معها، وبالتالي ستفلس. وهذا يعني ليس فقط فقد الوظائف، ولكنه يعني فقد وخسارة رجال الأعمال. فحتى إن كان صحيحًا أن معظم الشركات متعددة الجنسيات تدفع أجورًا أعلى من الشركات المحلية، فهي أيضا تعني بصفة خاصة بأمر “الكفاءة”، وهو ما يعني تسريح العمال، وزيادة عبء العمل العاملين الذين تم الإبقاء عليهم.

الحقيقة هي أن الطريقة التي تجتذب بها أي بلد للمستثمرين الأجانب تكون في الأساس من خلال منحهم كل ما يريدونه أو قد يريدونه: العمالة الرخيصة، والحد الأدنى من اللوائح، وفرصة الوصول إلى شراء شركات القطاع العام، وتقليل أو عدم القدرة على المنافسة المحلية، أي في الأساس، تقدم لهم التفويض المطلق إلى فعل كل ما يحلو لهم… أي حصانة كاملة، وعدم مساءلة، وسيادة عملية فوق الحكومة.

لذا، فلا… الاستثمار ليس دائمًا أفضل شيء.

تنويه: هذه النسخة منقحة ونهائية!

How can investment be a bad thing? Doesn’t it create jobs? Well, ok, investment is not always a bad thing, and yes, it can create jobs; but it is also not always a good thing, and it often erases more jobs than it creates. When you are talking about Foreign Direct Investment, you also have to bear in mind that whatever money those companies make, it flows out of your economy, not into it. Investment can often be like a syringe, you think it is being stuck into your arm to administer medicine, but it is actually just drawing blood.

And when investment comes through the process of privatization, that means services and utilities that are essentially there for the public welfare, and thus are the responsibility of the state, become profit-making enterprises. The decisions about these services will be made exclusively to boost profits and shareholder dividends, with no regard for the public interest. And these shareholders have shares in other companies, remember, so, their decisions will be made also to support the profitability of those companies as well. So, for instance, a road or a pedestrian overpass, will be built, not where it makes sense to build it, not where it can serve the interests of the population, but where it will benefit the interests of shareholders. So imagine what impact this type of thinking can have on matters of greater importance, like education, healthcare, food security, and access to energy and water?

Not only will the decisions be made by foreigners, and not only will the decisions be made for profit, but they will be made specifically to profit foreigners.

The IMF requires the government to cut public spending; that is, it requires to stop spending your money on you; and to instead spend your money making payments on international loans; these loans will primarily be spent supporting foreign investments, investments that will turn public services and utilities into private sector profit-making enterprises that will also take your money. They will also impose a VAT tax system which will raise the prices of consumer goods; taking more of your money. They will also severely devalue the currency, which means you will have to pay more for whatever you buy; taking more of your money.

When a multinational corporation moves in, remember, we are talking about institutions that have budgets bigger than some countries; local businesses cannot compete with them, and will go out of business. That means not only lost jobs, but lost entrepreneurs. While it is true that most multinationals pay higher wages than local companies, they are also generally more concerned about “efficiency”, which means laying off workers, and increasing the workload for retained workers.

Look, the way a country attracts foreign investors is by basically giving them everything they could ever want. Cheap labour, minimal regulations, access to acquire public sector enterprises, low or no local competitiveness, and basically carte blanche to do as they please. Essentially giving them total immunity, unaccountability, and practical sovereignty over the government.

So, no; Investment is not always a good thing.