Economic Crisis and the Politics of Reform in Egypt

ECONOMICS AND DEVELOPMENT Ray Bush. Economic Crisis and the Politics of Reform in Egypt. Boulder, Colo.: Westview Press, 1999. xv + 184 pp. Tables. Figures. References. Index. $55.00. Cloth.

Economic Crisis and the Politics of Reform in Egypt is simply dazzling. In this book, Ray Bush provides us with an innovative approach for looking at the economic crisis not only in Egypt, but in other developing countries as well. By placing the small fanner at the core of the economic reform process, Bush has turned the neoclassical orthodox paradigm on its head.

The book's six chapters critically investigate the prevailing strategies for economic liberalization in terms of the relationships between the Egyptian state, its society, and its agricultural sector. In the first, Bush introduces his main thesis, that although economic and political reforms have been necessary in Egypt, the strategy promoted by the international financial institutions (IFIs) and the Government of Egypt (GoE) is inappropriate to the needs of the country. The author then discusses the origins of Egypt's current economic crisis by tracing its history from Gamal Abdel Nasser's government (1954-70) through Anwar el-Sadat's (1970-81) to that of Hosni Mubarak (1981-present). In chapter 3, Bush assays remedies for the political economy of the country, and in the following chapter evaluates the impact of the the GoE's reforms by looking at aggregate data such as productivity levels, exports, poverty levels, and income. Next he extends his general critique by analyzing new data from the Delta governorates. Finally, in the last chapter he provides evidence to support his contention that Egypt is at a turning point in its economic crisis.

Bush describes the three pillars of IFI economic orthodoxy before debunking them. The first of these is that distortions in the Egyptian economy are promoted by the dominance of an unproductive, rent-seeking state. Thus liberalization and privatization (i.e., the state's retreat from economic activity) will permit the country to discover its true comparative advantage. second, rising overall levels of welfare will offset increased inequality associated with the economic reforms. Therefore, the state's retreat from economic activity will make it possible for a productive private market structure to emerge. Third, reforms will promote a more open and transparent policy framework. For the sake of brevity, I will discuss only what I perceive to be Bush's three main counterarguments.

His first major finding is that policy-makers are preoccupied with monetary aggregates of the productive economy, thereby ignoring human resources, issues dealing with the reproductive economy, and indicators of health, nutrition, and skill development. In addition to this, the male bias of policy-makers leads them to ignore women's work because it is not considered to be part and parcel of the national accounting figures. A corollary to this is the assumption by the IFIs and the GoE that all economic relationships are structured solely around tradable activities.

His second major finding is that the IFIs and the GoE do not comprehend the different types of rural production systems, the levels of inequality inherent in them, and the struggles they manifest. To support this point, Bush draws from empirical data collected from four villages in the Qalyubiya, Dumyat, Giza, and Daquhliya governorates. The failure of the IFIs and the GoE to recognize the character of rural structures and patterns of coping with the economic crisis, according to the author, is either a result of ignorance or is part and parcel of their integral strategy for social engineering in the countryside. Bush adds that these institutions are also colluding to undermine the existing vitality and vibrancy of rural Egypt. Moreover, he maintains, they want to uproot farmers and replace them with an emboldened landowning class. By failing to grasp the nuanced manner in which production is organized and social reproduction of communities is sustained, the GoE will widen rural social differentiation and undermine the ability of communities to withstand stress.

Bush's third insight is that the period of adjustment, along with other factors, has confirmed the flaws of the orthodox neoclassical notion that the farm unit is a single economic actor. Consequently, the IFIs fail to understand the significance of issues such as the persistence and dominance of labor migration, the crucial role of women in economic production and in sustaining the maintenance and reproduction of households, and the problems of continuing, structural rural poverty and the mechanisms that gave birth to it.

In light of these and other findings, Bush concludes that Egypt's current economic reform program (1) is unlikely to sustain higher levels of agricultural output and economic growth; (2) fails to address environmental issues; and (3) will result in greater inequality and social unrest. Bush's book, as I stated at the outset, is brilliant. It should be read by both practitioners and scholars in the field of development.