↪ All Unionized and Nowhere to Go - Sada

Enlightening piece by Joel Beinin on Decree 97, discreetly passed by President Morsi a few days after his November 22 legal coup — with the intent to lock out the independent unions born in the years just prior and just after the 2011 uprising and take control of the old state-controlled Egyptian Trade Union Federation:

This is characteristic of the Muslim Brotherhood’s recent political practice. Rather than reform institutions and power centers of the Mubarak regime, it has sought to extend its control over them. But as in other spheres, they do not have a concrete program or enough trained personnel to manage ETUF. Therefore, they are dividing control of the organization with Mubarak era figures. Their common interest is first and foremost bureaucratic—to maintain their positions. The Brothers also seek to limit the extent of independent trade unionism, as it constitutes a potential opposition to their free market ideology.

Very much worth reading.

Update: Karim Maged also signals this piece by Dina Bishara in FP.

Joel Beinin has a new paper out at Carnegie on the labor movement in Egypt, his field of expertise for something like three decades at least now. He writes:

[W]orkers were quick to mobilize in the early stages of the groundswell that eventually unseated Hosni Mubarak, and they deserve more credit for his ouster than they typically receive. Soon after the uprising began, workers violated ETUF’s legal monopoly on trade union organization and formed the Egyptian Federation of Independent Trade Unions (EFITU)—the first new institution to emerge from the revolt. Labor mobilization continued at an unprecedented level during 2011 and early 2012, and workers established hundreds of new, independent enterprise-level unions. They also secured a substantially higher minimum wage.

Yet, though the labor movement has made headway, problems persist. New unions face funding difficulties and the independent labor movement is internally divided. The Supreme Council of the Armed Forces (SCAF)—the ultimate power in Egypt since Mubarak’s demise—and ETUF have both repeatedly asserted their power to oppose independent unions and have scored some successes. The movement has a very limited presence in the emerging institutions of the post-Mubarak state and is thus left without much leverage to fend off attacks from its political opponents.

Going forward, the independent labor movement should consider looking beyond street protests over immediate grievances, where it has achieved its greatest successes, and begin training enterprise-level leaderships and forging political coalitions with sympathetic sections of the intelligentsia. Independent trade unions remain the strongest nationally organized force confronting the autocratic tendencies of the old order. If they can solidify and expand their gains, they could be an important force leading Egypt toward a more democratic future.

Timely reading considering a recent upsurge in labor actions across Egypt — in Cairo, Mahalla al-Kubra, Beni Suef, Marsa Matruh and elsewhere — and those are just from today. (via the two leading sources of Egypt labor info on Twitter, @3arabawy and @egystrikes.

This commentary was contributed by Nathan Field.

There’s a growing school of thought that promotion of entrepreneurship is an effective solution to the socio-economic problems facing many Arab countries, especially Egypt. In Jobs@Arabia.com Thomas Friedman heaped praise on Oassis500, a high-tech accelerator in Jordan that provides startup money and training to budding internet companies.  A prominent American investor recently profiled FlatLabs6, a similar effort in Cairo.  And the pilot version of the State Department’s Global Entrepreneurship program offers mentorship to young Egyptian entrepreneurs, mostly in the tech and IT space.

The case for promoting entrepreneurship as a solution in Egypt is strong. Why?  A solid argument can be made that the single most important cause of the 2011 uprising was economic — or, in other words, lack of economic opportunities. 

There are more Egyptian university graduates than ever before, with higher aspirations than any previous generation, yet, in an increasingly competitive and liberal global economy, the government has to this point been unable to generate anywhere near enough jobs that meet their expectations. Thus, in February 2011, that discontent — probably exacerbated by the effects of the post-2008 global financial crisis — caused the ranks of Egypt’s previously passionate but relatively small opposition to reach a critical mass, and sweep away the Mubarak regime. 

Friedman and company’s approach is sound.  However, what should not be overdone is the implicit assumption that “startup” means (or should mean) “tech” and especially “internet company.” Virtually every article covering this trend in the Arab world focuses exclusively on web-based companies.  Certainly, they have a place, but an equal, if not greater focus should be on the development of new lower-tech, labor-intensive firms, because they are more likely to make an impact in addressing Egypt’s un and underemployment problems.

The primary issue with internet-based “startups” in this context is that they rarely produce significant numbers of jobs. For all the media attention they receive, the combined workforce of Facebook, Linkedin, Twitter and Groupon, for example, is less than 20,000 people so it is unlikely that Egyptian web-based companies, especially those based on the development of computer apps, would make a major impact on the job creation front.

Moreover, just as Facebook’s IPO created a few hundred new super-rich, if any of the profiled Arab internet companies make it big – and some probably will – the financial rewards will go to a few already wealthy investors, or the generally high-skilled computer programmers, who already have plenty of employment opportunities.  This is not a value judgment – they would deserve it, for sure, since they took the initiative and the risks. But the question here is what does Egypt need more: millions of “middle class” jobs or a few hundred tech millionaires?

Secondly, while these computer programmers are nobly developing apps that address serious social problems, such as providing vetted taxis to women in a country where sexual harassment is a problem, or to provide traffic alerts in one of the world’s most congested cities, the benefits will primarily go to the  already well–off.  In a country where less than 50% of the population uses the Internet at all, only 10-15% of the population at most can afford access to smartphones, where they would use these apps?

By all means,  the creation of mini-Silicon Valleys in Egypt should be encouraged, but to the extent that promoting the development of new “startup” companies is a solution to the country’s problems, at least as much focus, perhaps  more, should be on the development of traditional, low-tech, labor intensive firms, because they are much more likely to create new jobs. 

In a country as large as Egypt, there is no shortage of areas where smart and resourceful entrepreneurs could set up profitable firms, that provides good “middle class” jobs at all skill levels, from MBA types, to mid-level project managers, to unskilled laborers.  Three immediately come to mind.

Garbage collection and disposal is one opportunity. Cairo, a city of over twenty million people, has at best, mediocre trash collection services. Part of the problem seems to be a lack of competition. Introducing more alternatives would not only improve quality of life, it is labor intensive, so it would require lots of manpower, nor does it need huge amounts of startup capital, and in a city this size, there will always be demand for great trash collection services. 

Facilities maintenance is another potential niche. In general, standards in this area in Egypt are not great and many building are in terrible condition because of decades of systematic neglect.  But  building maintenance is not exactly a luxury – it’s a necessity – and like trash collection there will never be a shortage of potential clients. If someone could step in with a company that develops a reputation for high quality and responsiveness they could feasibly build up a decent sized business fairly quickly.

The biggest opportunity, however, might be in the education sphere. A major cause of socio-economic disparity in Egypt is the winner-takes-all university entrance exam. Since – and this is not an exaggeration – a young student’s entire life trajectory depends on their test score, families feel forced to pay huge fees to tutors (at rates that would be high even in the United States).  As success on the test is often directly related to the quality of one’s tutor, those who can afford it, get good instruction, get into the good schools etc, whereas those who can not, are simply unable to compete. 

An Egyptian entrepreneur that could recruit the right group of teachers could probably find a way to set up high-quality group instruction that charge students half the price they are currently paying, but has virtually unlimited potential for scaling up given that there are several million test takers each year.

Finally, at the state level, the new government could have an impact by promoting more of an entrepreneurial mindset in the development of some form of manufacturing.  As Thomas Friedman pointed out, correctly, there is no reason why Egypt should be importing Ramadan lamps or tourist souvenirs from China, where the cost of labor is much more expensive. 

To be sure, in a brutally competitive global economy, it will be difficult for Egypt to make manufacturing inroads against China or Europe, but with a serious focus, there is no reason why it couldn’t match Saudi Arabia’s efforts to develop car manufacturing facilities.  

At the very least, even if not profitable, it would be a good investment. After all, what is a better use of money?  Increasing social welfare spending as a response to the revolution, which, aside from being unaffordable, will further increase dependence on the government? Or to use that same money to build up lower level manufacturing facilities, which will at least create jobs and improve the skill level and confidence of the younger generations (if proper training is involved)? 

Even in a best-case scenario, the new government will have a hard time doing better than the Mubarak regime in creating new jobs and opportunity.  So the single most important thing it can do is to develop a new culture of entrepreneurship, and promote a new generation of “startup” companies, because, as the history of modern business suggests, private initiative is almost always more effective at creating jobs than massive government bureaucracies.  

At the same time, the linkage between “startup” companies and internet companies should not be overdone. The biggest impact on the jobs creation front will come from lower-tech, labor intensive firms, and these deserve equal focus in any program that aims to promote entrepreneurship as a solution to Egypt’s problems. 

Nathan Field is the co-founder of Industry Arabic. Contact him at Nathan@IndustryArabic.com

As part of al-Jazeera's great series on the Arab uprisings, this documentary profile the workers of Egypt's largest textile mill in Mahalla al-Kubra, who took to the streets on April 6, 2008 in the largest protests in decades, presaging the January 2011 uprising. 

There's a very good article by Hesham Sallam, called Striking Back at Egyptian Workers in the new issue of Middle East Report. It details the hostile rhetoric and actions by the military, interim government, and many commentators against the wave of industrial action and strikes that have taken place since the revolution.

This part of Sallam's piece on the treatment of strikers post-revolution is spot on:

Shortly after the resignation of Husni Mubarak on February 11, Egypt witnessed the rise of what Egyptian authorities and media outlets began describing as ihtijajat fi’awiyya or small-group protests. The Arabic term fi’a simply means “group,” but has acquired negative connotations and might be compared with how the term “special interest” is used to disparage American labor. 

. . .

The dangers of fi’awi demands are said to be three. First, the workers who make them are accused of seeking to exploit the revolution to serve their own financial interest. Wahid ‘Abd al-Magid of the al-Ahram Center for Political and Strategic Studies has articulated this perspective on a number of televised occasions, chiding labor protesters for slaving away in silence for 30 years and then choosing a moment of crisis to press their case. Mainstream portrayals usually draw a contrast with the Tahrir Square gatherings that preceded the downfall of Mubarak, juxtaposing the selfless motives of Tahrir to fi’awi protests that put particular agendas ahead of the greater good. According to the columnist Khalid Muntasir, “Tahrir demonstrations raised a political slogan, ‘The people want to bring down the regime.’ All the slogans revolved around the meaning of freedom, as demonstrators set aside their fi’awi demands and summoned forth the spring of liberty. They did not ask for a raise or a bonus. They looked at the wider context and at the nation as a whole. The contagion of narrow viewpoints did not spread among them, as it did among those who engaged in continuous, hysterical and vengeful fi‘awi demonstrations.”

Second, bread-and-butter demands are presented as a major challenge to Egypt’s economic prosperity and, therefore, national security. Finance Minister Samir Radwan claims that fi’awi demonstrations have cost the treasury 7 billion Egyptian pounds and the tourism sector 13.5 billion -- making them largely responsible for Egypt’s budget deficit and decline in foreign direct investment. Critics of strikes regularly invoke the expression “the wheel of production must turn” as a means of telling protesters to go back to work. Supreme Council head Field Marshal Husayn Tantawi himself sounded this note in one of his few public appearances. Similarly, a week after Mubarak’s resignation, prominent salafi preacher Muhammad Hassan used the phrase in calling for an end to strikes and sit-ins. Even opinion makers who proclaim sympathy with the strikers’ demands often defer to elite consensus on this point. “Despite the legitimacy of these demands,” wrote journalist and talk show host Lamis al-Hadidi, “I believe that this is not the time for settling accounts or self-interest. Now Egypt must come first and this is not simply a slogan.... Now the wheel must turn.” Interestingly, during the lead-up to the March 19 constitutional referendum those who advocated the “yes” vote also referred to “turning the wheel of production” to argue that approving the amendments would help bring normalcy to the country’s economic life.

Third, so-called fi’awi protests, the narrative goes, take their cues from affiliates of the formerly ruling National Democratic Party (NDP) stirring up trouble to reverse the gains of the revolution. Eight days after Mubarak’s resignation, unidentified “informed sources” told al-Misri al-Yawm that three former regime figures were behind the “fi’awi demonstrations” in the state sector. The same week, the official news website of the Muslim Brothers reported that NDP members were inciting labor unrest, citing an unidentified source claiming that a dentist who held a leading position in the former ruling party had been calling on his colleagues to stage demonstrations. Government officials have corroborated claims of NDP involvement in inciting these activities, though they have yet to present any concrete evidence to back up the allegations. In March, Justice Minister Muhammad al-Gindi said that labor demonstrations are not spontaneous but a manifestation of an organized “counter-revolution” staged by remnants of the old regime. As the spring wore on, and sectarian tensions began to preoccupy the national political debate, it became standard practice for pundits and commentators to list fi‘awi protests together with sectarian strife as the two main channels through which forces of darkness are attempting to undermine the January 25 revolution.

Read the rest, but the articles makes several things pretty clear: the public discourse over strikes has changed dramatically since the revolution in a negative fashion, despite the fact that the strike movement was a major part of the preparation for the revolution and that demands for higher salaries, etc. seem perfectly legitimate. There's been a revolution, dammit, or at least many want it to become a fully-fledged one.