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

Middle East
on 14 Comments
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.”

14 Responses

  1. Dan Crowther
    March 13, 2012, 7:15 pm

    So there really are other countries in the middle east…………

    • anonymouscomments
      March 13, 2012, 11:41 pm


      i believe you think people focus too much on right wing zionist interests as a driving force for too much of US foreign policy. i agree there are many other forces at play, but what other interests do you think carry the most weight? big oil, MIC, and other profiteers? sincerely interested, and i think there are other major players.

      i tend to think there is often a confluence of interests at times, which gives policy the needed momentum. but i can’t get away from the neocon influence in everything post-9/11. and though right-wing geo-strategy plays a role (which i think is sloppy “intellectual” cover for policies many others want) and the MIC play a role, i can’t help but see zionist ideologues as a key, if not required driver.

      also the talking heads and many media outlets almost reading from a script was sickening…. are a few zionist ideologues key in driving the media campaign, or were they just xenophobes jumping on the war train? i am not talking a giant media conspiracy, just a number of key players setting the agenda, and the rest going along for the ride. but it still was very jarring, with transparently BS “reporting” and fear-mongering rampant, especially running up to the iraq war. what pushed our media in this direction- an interest in viewers from advertising profits, or were ideologues/others throwing their weight around?

      the same thing goes for the counter-factual reporting on iran in the NYTimes and on NPR etc. the major outlets have an agenda, and any rational reporter worth his salt should be noting the NIEs and the fact that an attack on iran likely has little/no benefit, and is most likely gravely counterproductive (how does IAEA kicked out, and a greatly radicalized iran sound?). why are these media outlets, especially public radio, out to lunch?

      interested in your high level take on the power players, as i do respect your commentary.

      • Walid
        March 14, 2012, 5:30 am

        “… i can’t help but see zionist ideologues as a key, if not required driver. ”

        Anonymous, Dan is not wrong but for most at MW, Zionism and Israel are the center of the universe and everything else such as this interesting discusion on the evils of privatization pushed by the IMF, the WB and US Aid that James North is attempting to start is not much than minor detail on what’s happening in the rest of the world, especially the ME.

      • Dan Crowther
        March 14, 2012, 9:04 am


        A couple things — Yes, the lobby holds major sway, when it comes to stateless/rightless palestinians, they are the reason why – no question.

        My problem(s) with the W&M book specifically is that they called it “The Israel Lobby and US Foreign Policy – not middle east policy, foreign policy; unfortunately some people took that literally. We now hear from people on a daily basis about how Israel controls all of US foreign policy, along with their lobby in the states. Walt and Mearsheimer never meant to say this, but this is how people have taken it.

        Specific points aside – there are a few of questions that Lobby enthusiasts have no answer for (1) Does the US Support democracy, independent nationalism and development outside of the middle east?(where we probably all agree it doesnt) (2) Did the US, as it started taking over for the old powers, support democracy/ independent development BEFORE Israel was created?
        (3)Are the 800+ US military bases around the world the result of “the lobby”?

        I think to ask these questions is to answer them.

      • dahoit
        March 14, 2012, 10:54 am

        When has the WAPO or NYTs ever railed against all our military bases all over the world?Their silence is telling,and how many Zionists own stock in Raytheon etc?Profit over people,a definite sign of misplaced ethics.
        Vietnam’s old peaceniks have a dog in this fight,Israel,that they didn’t have with isolated Vietnam,witness all those alleged humanitarian hypocrites of yesteryear’s peace mantra.

      • anonymouscomments
        March 15, 2012, 9:06 pm


        thanks, i like the way you put it with those pointed questions. i always used to refer to past US actions, indicating we always mess about in horrible ways, and now we just often do it with a zionist hue.

        but i do think there is an issue about “israel-firsters” now setting the bloody agenda for the most part, when it comes to the middle east…. the ideologues are so blindly attached to israel, they ignore the immense harm they do (or *could* do) to the US.

        more specifically, their agenda (let’s say the neocons) could very well result in a collapse of the US dollar, and hasten and deepen the decline of the US. this could be utterly disastrous. (1) it is bad for all americans, and any country we lash out at to distract ourselves with during the fall (2) though i blame the neocons and an unrepresentative “pro-israel” lobby, many will blame “the jews” (if we ever get over hating “muslims”, which is a big “if”; but some are already over hating the muslims, and most never did)

        i just don’t like the look of the coming few years.

      • stevieb
        March 14, 2012, 10:36 am

        “..but i can’t get away from the neocon influence in everything post-9/11. and though right-wing geo-strategy plays a role (which i think is sloppy “intellectual” cover for policies many others want) and the MIC play a role, i can’t help but see zionist ideologues as a key, if not required driver. ”

        I agree, but I’d say it’s “everything post 6-day war(1967)”(of which Finkelstein tends to agree, with qualifications).

        There is more than enough material to dicipher the driving movitivation behind U.S foreign policy – with absolute certainty, imo – with the use of political sociological methodology. Mind you, the politics of the academic aparatus today certainly don’t make that endevour a smooth ride, by any means…

  2. Inanna
    March 13, 2012, 8:49 pm

    But Mubarak supported the peace treaty with Israel so it’s all good, right?

  3. yourstruly
    March 14, 2012, 1:50 am

    convenient “truths”

    economic neoliberalism equals reform
    apartheid israel is a democracy
    the american dream lives on

  4. Pamela Olson
    March 14, 2012, 11:25 am

    I’ve been saying this since college, when I did a research paper about IMF/WB-directed ‘development’ in the global south and the internally-directed development of the ‘Asian tigers,’ which actually did increase those countries’ wealth, security, and power. Point for point — literally every bullet point was the opposite for IMF/WB-directed development than what the Asian tigers did. And of course, all the countries essentially taken over by the IMF/WB ended up worse off than before these IFI’s (International Financial/F—er Institutions) stepped in.

    I wondered then, as I do now — are they stupid or evil?

    I still wonder the same thing about much of the Bush Admin…

    Very sad — so many people suffer because of these fools/brigands.

    • LanceThruster
      March 14, 2012, 5:36 pm

      I wondered then, as I do now — are they stupid or evil?

      I think they can clearly be both. I would offer that it manifests itself in the evil and stupidity of the notion that rather than operating in a fashion that can be “win-win” for most all parties involved, they see a “win” only in the context of if someone else “loses.”

      The fixation on this power differential creates a vicious cycle of sociopathy while generously feeding their paranoia (i.e. any objecting to them always coming out on top no matter what certainly want to do them ill – a classic case of projectionism).

  5. Justice Please
    March 14, 2012, 3:22 pm


    this was an excellent article. Thanks for pointing out the glaring injustice that is privatization of public property, and for pointing the evilness of calling this “reform”.

    Egypt, as well as other nations, should a) push out foreign forces and b) jail the oligarchs.

  6. Erasmus
    March 15, 2012, 9:25 am

    Egypt’s Agriculture price policy and PL 480Wheat exports.

    Wheat export promotion thru the PL 480 may have been initially (60ies, 70ies) just a major instrument of income generation for American farmers. However, coupled with a state monopoly in case of cotton and a regulated agricultural price policy and obligatory acreage quota system (farmers had been forced to devote a set acreage for the export crop cotton), Egypt’s fast growing population demanded ever more increasing wheat imports for the daily heavily subsidized bread.
    The Egyptian price policies favoured “export-crops” over staple food production and domestic market oriented requirements, and the wheat deficit grew and grew and grew until the finance ministry could not afford anymore the heavy subsidies. Any desperate attempt
    to reduce the bread price subsidies, lead invariably to massive street opposition seriously endangering the position of the long-term political strong-men and their established power system.
    Egypt’s chief power holders (Nasser, Sadat, Mubarak) realized that without PL480 wheat from the USA, their power position would be gone with the wind.
    From that point onward, it became obvious that PL480 not only could be used to serve the interests of American farmers, huge US export companies and woo them for domestic political ends at home, but that the so created dependency of the Egyptian power elite could well “disciplinize” Egypts foreign policy, especially vis-a-vis Israel. PM Sadat was not only driven by the peace-angel to conclude the Egyptian-Israel peace treaty, but found himself rather with little option than to follow US-American “guidance” and serving Israel’s interests.
    That dependency has not decreased ever since, in the contrary as the Mubarak-era and his economic “liberalization” policies in the non-agricultural secors have shown, which served the elite and their cronies to enrich themselves shamelessly and enlarge their “rental” diversification under the Mubarak-regime and Egypt’s military.

    The aborted Egyptian revolution has most probably not yet seen its apex and end. Unfortunately, the current economic problems of Egypt must be considered as truly formidable in the years to come and are likely to make Egypt a virtual powder keg, with civil strife a la Syria looming large ……..
    One can only hope that such forcast would be thoroughly wrong.
    After all, hope dies last, even against all odds of probability.

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