Adam Hanieh, "Egypt's 'Orderly Transition'? International Aid and the Rush to Structural Adjustment"
At the core of this financial intervention in Egypt is an attempt to accelerate the neoliberal program that was pursued by the Mubarak regime. . . . There are two common elements to all the financial support offered to Egypt to date -- an extension of loans (i.e. an increase in Egypt's external debt) and promised investment in so-called Public-Private Partnerships (PPPs). Both these elements are tied to Egypt's implementation of structural adjustment. Strategically, it appears that the initial focus of this structural adjustment will the privatization of Egypt's infrastructure and the opening of the economy to foreign investment and trade through PPPs (these are discussed below). In addition to the US government, World Bank and IMF, the other main institutional actor in this process is the European Bank for Reconstruction and Development (EBRD). . . . Currently Egypt's external debt runs at around US$35 billion and over the last decade the country has been paying around US$3 billion a year in debt service. From 2000 to 2009, Egypt's level of debt increased by around 15%, despite the fact that the country paid a total of $24.6 billion in debt repayments over the same period. . . . Obama's offer needs to be understood accurately. Contrary to what has been widely reported in the media, this was not a forgiveness of Egypt's debt. It is actually a debt-swap – a promise to reduce Egypt's debt service by $1 billion, provided that money is used in a manner in which the US government approves. . . . This same policy language has been clearly articulated alongside the loans promised to Egypt by the World Bank and IMF. . . . Also in his 19 May speech, Obama pledged $1 billion in investments through a US institution known as the Overseas Private Investment Corporation (OPIC). . . . Because OPIC's investment depends upon reducing barriers to foreign capital and accelerating the privatization of state-owned enterprises, its activities are predicated upon, and help to reinforce, the extension of neoliberal program described above. In the case of Egypt, this is likely to take place primarily through the use of US government funds to establish Public-Private Partnerships (PPPs). A PPP is a means of encouraging the outsourcing of previously state-run utilities and services to private companies. . . . The EBRD is shaping up to be one of the lead agents of the neoliberal project in Egypt. On 21 May, EBRD shareholders agreed to lend up to $3.5 billion to the Middle East, with Egypt the first country earmarked for receipt of loans in the first half of 2012. This will be the first time since its establishment that the EBRD has lent to the Middle East. . . . The EBRD intervention thus likely augurs a massive acceleration of the privatization process in Egypt, most likely under the extension of PPPs. The current Egyptian government has given its open consent to this process. . . . If this process is not resisted, it threatens to negate the achievements of the Egyptian uprising.