Egypt is looted, and the U.S. press calls it ‘reform’

Joseph Stiglitz

One of the more annoying and dishonest features of the mainstream American media over the past couple of decades has been its use of the word “reform,” without quotation marks, as shorthand for a set of controversial economic policies the United States and global institutions like the International Monetary Fund have imposed on the poor nations in the global south.

The word “reform” is biased; no right-thinking person could be against it. If the New York Times and the Washington Post had followed their own rules about objectivity, they would have instead used neutral terms, like “neoliberalism,” or “the Washington Consensus,” and they would have pointed out that distinguished economists like Nobel Laureate Joseph Stiglitz, along with large, vocal masses of people in the poor countries themselves, have warned for years that the “reform” policies are a slow-motion disaster.

The latest evidence for the failure of neoliberalism comes from Egypt, and even the mainstream press is finally recognizing it. In the Washington Post recently, Stephen Glain blamed the U.S government, the IMF and the World Bank for pushing policies that severely damaged Egyptian agriculture, to the point where the country now has to waste precious foreign exchange to import nearly all of the wheat it needs for bread, the staple food.

An earlier Post article showed how the U.S. Agency for International Development (AID) funded a Cairo think tank that vigorously promoted the “privatization” of state-run companies, public resources, and lands. Privatization, one of the tenets of the neoliberal orthodoxy, is supposed to foster competition, efficiency and economic growth.

In fact, the privatizations were rigged by Gamal Mubarak, the deposed dictator’s son, and his cronies, who gained control of companies worth billions of dollars at fractions of their true value. (The Post reported that the Chicago-based international law firm Baker & McKenzie arranged many of the deals.) The biggest of Gamal’s shady partners, Ahmed Ezz, inherited a state-owned steel company, which he turned into an inefficient monopoly.

Instead of wasting $10 million on their think tank, U.S. AID could have simply stopped any adult Egyptian in the street and asked them how privatizations conducted by the Mubarak regime would turn out.

Professor Joe Stiglitz uses the terms “market Bolsheviks,” or “market fundamentalists,” to describe the zealots who have imposed neoliberalism across the global south. His choice of words is brilliant. The unelected apparatchiks at U.S. AID or the IMF who have pressured the governments of Egypt or Bolivia or Zambia over the past 20 years or so, without caring about or even knowing the reality in those places, are the spiritual descendants of the Soviet central planners who coldly treated human beings as statistics.

Meanwhile, a small group of thieves stole billions of dollars of public property that had been built up by the Egyptian people. At the very least, the mainstream press should stop calling this colossal robbery “reform.”