Economist Nader Fergany has a bone to pick with those who see a rosy fiscal future
By Manal el-Jesri
There is no development in a country like Egypt. The attempt to use the claim of development and reform is an attempt to cover up an ugly reality,” says Dr. Nader Fergany, a top regional expert on development and all that is attendant to it.
Fergany, a professor who has taught at Cairo University, the American University in Cairo and the University of North Carolina, was also the lead editor of the UNDP’s first four Arab Human Development Reports between 2002 and 2005. He has since excused himself from continuing the journey.
“I stopped for many reasons,” he explains. “It was time for a change. I think with the completion of the first four reports, a complete intellectual project for development in the Arab world had been formulated. It was a point at which change was due. There were also changes in the leadership at the UNDP and in the Arab bureau of the UNDP that would not allow the same level of courage and critical assessment that we enjoyed in the first four reports.”
Today, these four reports are considered an important reference for anyone interested in studying human development in the Arab world. On the eve of the economic turmoil that rocked global and regional markets last month — turmoil that will certainly curb even the most optimistic forecasts for growth in Egypt — Egypt Today spoke with Fergany about development, growth and the future of the economy. Needless to say, his views diverge rather sharply from those of other economists and the government alike. Edited excerpts:
I think the major contribution of the four reports is that we managed to break new ground in issues that were rarely discussed. Perhaps the most important of these is that we introduced the concept of freedom and good governance as a major element of human development. We also elevated the importance of knowledge acquisition and the empowerment of women, but I think introducing the concept of freedom in a very comprehensive manner and good governance as a requirement for the enjoyment of freedom was the major contribution of these four reports.But do all governments adopt the same definition of ‘development?’ In Egypt, we find that the word ‘development’ has become a catchword that is inserted into any headline to lend it importance.
It is even worse than this. I think it is an act of deliberate deception because no matter how you define development — especially if you define it as we did in the Arab report, to link it to freedom for the country and all its citizens — then there is no development in a country like Egypt.Yet the term is used repeatedly. It is even used in conjunction with another favorite word, ‘growth.’ In Arabic, the two words (tanmiya [development], nomow [growth]) sound very similar to the layman.
This is another aspect of deception. First of all, the figure of seven percent [the growth rate of Egypt’s gross domestic product in 2007] is not that high. There have been much higher levels of growth in India and China, for example. Secondly, this figure comes after a period of very low and sometimes negative growth for almost 20 years. And thirdly, seven percent for two or three years is not a major achievement.
However, the most important issue  is that using GDP growth [as a standard] has a major flaw because it ignores the distribution of income. In Egypt, the case is seemingly that whatever growth takes place goes into the pockets and the bank accounts of a very small clique, while the vast majority of the people continue to face economic misery through unemployment and poverty.
The major contribution of the Arab human development report is defining development as inseparable from the total respect of freedom, especially the key freedoms of opinion, expression and association. Egypt is a very clear case where you might have growth that is on the one hand badly distributed, and on the other hand is coupled with a very severe restriction of freedoms.You also believe there is another aspect of cheating regarding the process of computing the seven percent growth rate.
In computing the seven percent, the government puts in the revenues of privatization. This is not really growth, which means an increase in the production of goods and services, additional job creation and hopefully a rise in the standards of living. This aspect of the revenues of privatization is nothing but a transfer of ownership from public hands to private hands — it does not result in a contribution to the production of goods and services in the society. Actually, in many cases, privatization has resulted in the destruction of job opportunities and in mass unemployment.If the people are being deceived, are they aware of this?
They are becoming increasingly aware because all these bogus claims of growth and reform and so on are not translated into effective, good job opportunities and a rise in the standard of living for the people. The contradiction is so stark that people are coming to realize that they are being taken for a ride.You graduated from university in 1963. How has the opposition’s situation today changed from what it was back in the 1960s?
On the internal front, in the 1960s of course there was oppression, but at the same time there was a rising national project and there was a sense of dignity deriving from the presence of a national project for development. You may have your views about this, but there were facts on the ground, in terms of an industrialization process and a very clear rise in national income. There was essentially no unemployment, despite the problems with the unemployment schemes that were adopted. You did not see people languishing in the streets for lack of jobs as we have today.
On the whole, there was a lower level of economic misery. At the time, Egypt played a prominent role in the so-called liberation movement, which by definition meant a rather tense relationship with the West, especially the dominant powers and especially the American administration.
Now we are in a totally different situation. Internally, we have a failed development process that is being covered up by an act of deliberate deception. They think that slogans and multi-colored posters can change a very ugly reality, which is not true.You believe that all regimes who have depended on a foreign power for their own empowerment have been eventually let down.
This is the rather sinister tragedy of the authoritarian governance regimes that bank on the support of the United States and Israel when their time comes, and their time will come. My prime example is the Shah of Iran, who was the most important agent for the American enterprise in this part of the world. He was extremely rich and was the most despotic in terms of oppressing his people, but nevertheless he fell and when he did he could not even find a place to live or to be buried in.
[History is alive with similar examples,] but the leaders do not read. And if they read they do not understand. Of course, it is a case of halawet el-rouh (last throes of death). Have you ever seen a chicken being slaughtered? After the head is separated, it keeps fluttering, obsessed with excess vitality.One outstanding difference between the 1960s and today could be the fact that in the 1960s, these elites were a force for change, and hence were feared by the regime. Where are these elites now?
Of course, there are very prominent cases of wonderful members of the elite, but the elite at large has betrayed its historical mission to act as the conscience of the people.Despite the so-called betrayal of the elite, a group of leftist groups, together with Al-Tagammua’ party, tried to form a coalition a couple of years ago, in an attempt to be an active force for change.
I think nothing of value will come from the so-called political parties in this country. They are either useless or are in the pockets of the regime. That is why the real political vitality of the country is coming from outside the parties. It is coming from the extensive protest movements that essentially show the newly acquired vitality of the Egyptian people.
I am not talking about Kifaya, but about the so-called social protest movements, which I do not think are solely social. I think they are political at heart. Even if they concentrate at present on union demands like salaries and benefits, they have a political vision behind that. Movements like Doctors Without Rights, or workers and so on. They have been expanding, mushrooming at a very fast rate and becoming much more effective than they used to be. I think they are the most important source of political vitality in Egypt now.
It is actually taking the political parties by surprise. They are forging a new conscience for the Egyptian people, and in Egyptian politics that is working for freedom and justice, in my opinion. We are not yet there, but we have some very clear examples in Latin America in the last 20 years, where there was a great rise of so-called social protest movements that over time transformed into major political change, essentially leaning towards higher levels of social justice and freedom for the people.
I think we are at the beginning of such a process in Egypt and in other Arab countries. In some Arab countries, the process is even taking a violent turn, as in Algeria, Morocco, and also in Yemen and Saudi Arabia, but even in some smaller Gulf states.Are these social movements a sign that the middle class is rising up again to assume its historical role as a force for change?
It is not mostly middle class — it is extending throughout society. Actually in many of these protest movements you see a cross-section ranging from the upper sections of the middle class down to the poor. It is cutting across class, and this is a major change and innovation. This traditional dream of the middle class leading change is not valid here.
I think what we will see is active segments of all classes banding together in protest movements, leading to political change in the future. Take the example of Doctors Without Rights: When you think of medical doctors, you think of the upper middle class. This is not true anymore  Many doctors have been reduced to poverty in this country so they are not middle class anymore.If the protest movement is cutting across class boundaries, where will the leadership come from?
The standard worry in traditional political circles is that the protest movements will not have a leadership or a unified vision, and I think this is very unfair and inappropriate. You cannot try to impose a traditional type of a hierarchy on protest movements. People are preoccupied with a traditional pattern that, in my opinion, no longer works. This is part of the weakness and tragedy of political parties in this country.
I think we are at a stage in human development where you have to accept that the new forms of organization that will be effective in political change are not the hierarchical forms of organization. We need to be open-minded and accept forms of organization based on network. They will not necessarily be chaotic in a destructive sense, but susceptible to horizontal linkage rather than the traditional vertical hierarchy of leadership. We are already witnessing the beginnings of such protest movements, especially among young people who are reaching out to each other in this kind of horizontal linkage, which is being facilitated by modern technologies such as the internet and mobile phones.So you think it will be impossible for any regime to put a muzzle on this process, simply because the modern technologies available are impossible to control.
They are trying to disturb it, but try as they may they will not succeed. This is the beauty of expansive protest movements. You cannot round them all and lock them up: You end up having to lock up every Egyptian worker.Apart from the technology, what do you see as unique about these protest movements?
For the first time, you see women and children playing a very integral role in protest movements. Follow the sit-ins and sleep-ins of many strike movements, and you will see children among them. And the women are there not merely as part of families — they are often leaders. This is especially true in situations where the vast majority of the workforce is made up of women, such as in textile factories or the real-estate tax department.
This is a movement that extends beyond the traditional confines of political thought. It is a movement that extends to every nook and cranny of Egyptian society, because every nook and cranny of Egyptian society is being negatively affected by the poisonous combination of impoverishment and oppression.And the lessons learned?
Protest does work. Most of the protest movements have attained their declared objective. You must have seen the arrogant initial responses of the government regime being overtaken by the protest. The most important thing is the demonstration effect — it tempts others to wage protest movements. This has been very effective in the Egyptian case.But we continue to hear pessimists warning against the infiltration of Islamist forces, which are strong enough, they claim, to take over.
Political parties are in the throes of death, so do not worry about them. The protest movement has not fallen prey to any political party, including the Muslim Brotherhood. Through direct contact I can vouch that the leaders of the protest movements are extremely solid social visionaries. They are leaders of the first order, in my opinion. et
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