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TheRazorX45 karma

I'll try my best to answer for him, as it might be something that would get him in trouble if he does. I'll try to answer this question, and some of the ones below. Please note, the biggest problem understanding how this makes sense is we generally tend to look from a western perspective, but most of what we're used to or believe don't actually apply, so i'll be trying to frame my answers in a manner that makes more sense to most readers that lack the Egyptian background.

Anyway, the problem is most of the "private" companies are actually "partnered" with the military (i.e they get their cut), or are owned by cronies of the regime (like Ezz Steel).

In Egypt (similar to China i guess), you either "partner" with the regime and give it its cut, or you're SOL. The regime in Egypt is effectively the military (and has been since the 50's at least).

Additionally, those companies and factories being sold, are public sector being sold for pennies to cronies/"partners", who are then given almost no oversight whatsoever, resulting in more "fleecing" of the natural resources and employees.

To give a basic (if minor) example; A public beach that the less fortunate can go to for free, use for fishing...etc gets sold with no oversight or "proposed land usages" or anything of the sort to a private company that's either "partnered" with the military and/or one of its cronies, or owned by the crony. They then build a mega-complex hotel resort that prevents people from using the beach because they can't afford it, and to add insult to injury it's unlikely that most people from the neighborhood would even be allowed to work there due to "Standards", so the vast majority of the profit won't go back to the area anyway, while at the same time, they lose the usage they already had (Fishing, bathing, collecting shells and what not to produce trinkets to sell...etc).

The same occurs with something like a factory; When the government owns it (even with how corrupt it is), at least some of the profit goes back to the state (after of course some or many people skim as much money as they can), but when it's privatized like what happens in Egypt, effectively no benefit whatsoever goes back to the community (Since Salaries don't change, they tend to lay off a shit ton of employees because private sector employees in Egypt have less protections that public sector employees), in other words, even if the factory/company ends up being more profitable, it actually results in a negative benefit to the community.

Additionally in several cases the "privatization" that occurs is just basically the Military taking over (either brazenly or through some shell company owned by the military), and there's no real regulatory capture since everything is basically a regulatory capture. Even if there are regulations, they're mostly ignored because either you "know/are someone" (which as explained earlier, you're basically a military man, or a crony anyway), or in the few cases where you're somehow legit, you just bribe the inspectors.

Also in the cases of multi-nationals or companies based in the EU/US/China, they don't need to worry since the Egyptian government will almost always side with them at the expense of the locals, so they can basically do whatever they want without needing to worry, which is not better for the citizens.

This is not new, but the difference is back during Mubarak's days the government at least PRETENDED (albeit very badly) to give a shit about people, which is why they subsidized essentials like wheat, beans, rice, electricity, water, gas....etc which meant the less fortunate were at least able to eek by and survive; Now with Gas being (last i checked), 5 times more expensive than it used to be (and once gas goes up, everything else goes up), and the currency being worth (last i checked) 3 times LESS than it was worth before, and salaries not having gone up significantly (public sector employees who mostly already make shit salaries, were given a 30% adjustment, even though prices went up over 200-300% in some cases), means that most less fortunate people are fucked, the middle class is now basically eek'ing by, and the rich (not mega-rich) are effectively now the middle class.

Basically almost everyone except regime members/cronies have trended downwards financially.

Disclaimer: I am in no way shape or form claiming that Mubarak was better. I suspect this would've happened regardless of the "Arab Spring".

Additional Disclaimer: I may very well be incorrect about some things; I am not a sociologist or anthropologist or economist...etc, this is based on my own observations and common experiences of folks I spoke to in Egypt.

Source: Lived in Egypt for a decent period of time.

Edit: IMO, Egypt IS one of the faces of uncontrolled and unrestricted capitalism. If you have money, you're effectively untouchable and can do whatever you want.

TheRazorX12 karma

Just a correction;

AlBernameg actually predates Morsi's tenure, it started being broadcast on tv channels vs Youtube during Morsi' tenure I believe, but Morsi and his followers actually DID want to shut it down, and attempted to do so multiple times.

The difference (which honestly isn't that much) is that instead of the government and police forces shutting it down, the MB youth and their gangs attempted to shut it down with protests and physically blocking entrances and stuff like that (that the Pro-regime folk also did).

Additionally while Morsi was "president" he actually didn't have as much power as he should've, which meant that since Bassem Youssef was ridiculing the MB that the Regime pretty much wanted to oust, he was in some way protected, but then when the MB were removed and he wanted to ridicule the regime in the same way, there was nothing to protect him.

Think of it as an "enemy of my enemy" situation, rather than one group or another providing more freedoms. If the MB had their way, Bassem would've been gone from day one of their tenure.

TheRazorX9 karma

Adham, I appreciate what you're trying to do, but I doubt you'll be able to answer serious questions (like if I ask about Amal Fathy) without putting yourself at great risk, so what are you hoping to get out of this Ama?

Also "Menawar reddit ya basha".

TheRazorX9 karma

Considering Egypt has been getting help from China to "control their internet", yes, they can almost 100% find him if they want to.

TheRazorX8 karma

I'll try to respond to the best of my ability, also am forced to [snip] some of what i'm responding to due to comment size limits, so hopefully it'll be easy to get what i'm responding to.

Regardless, glad for your perspective and your effort post. A true rarity on Reddit these days, and I thank you.

Like i said in the disclaimer, I'm not an expert in these things, just based on my experiences and observations and conversations. You're more than welcome, and I honestly try my best :)

True, which, iirc, was a major issue with Russian privatization. My point wasn't to say that [snip] better and would limit the military's power.

Given that the military junta is seeking to induce foreign investment, I don't think they'll just sell to well connected Egyptians. They need to encourage investment, and nobody wants an investment they have zero control over.

They don't need to control it, just reap part of the benefits, and have "veto" power over something or another, and if you're sharing the benefits, you think SCAF would bother holding them accountable for abuses? heeeeelll no.

Think of it as how to do business in Dubai you generally have to be partnered with a citizen. That doesn't impact investments there that much.

I get your example, but consider the current status quo. You have a large beach that's basically subsistence fishing without making enough money to invest in larger boats or other means to improve the resident's lives. Now you build a mega complex there.

You're adding to the example, but as actually happened once already, it WAS an organically growing town that got basically taken over. I honestly forget the town but will edit it in and pm you if i remember. IIRC it was somewhere on the red sea, although it could've also been one of the older north coast resorts.

First, I think it's highly unlikely that none of the locals would find meaningful employment as a cause of the hotels. Let's assume you're correct and the complex refuses to employ any locals. So then they import people to work there, and those people will need goods and services that the locals can provide. They'll need their own shops, their own restaurants, plus they'd likely hire cheap local labor for things like driving local tour buses, do low skill menial labor e.t.c.

This is one of the situations that's difficult to explain if you haven't lived in Egypt; It's actually not like that. They won't employ the locals (outside of perhaps janitorial work) because they don't speak languages needed for tourists. They actually will "import" people from other cities that basically live full time on site and never need to leave. The stores are owned by the complex, the facilities required are owned by the government (water, electric...etc), the supplies are shipped in to the complex...etc

It basically becomes like the natives of the area don't even live there, until you leave the walls (and there ARE walls) of the complex, which the vast majority of visitors to the complex won't venture out of until it's time to leave.

Sure, some portion of the local populace could work at the mega complex, sure some of the workers and visitors might decide they want to visit a local "ahwa" for an "authentic hookah" or something, but it is definitely not enough to be a net positive to the community of the investment, at the VERY least in the short-medium term, and since enterprises have a generally low lived lifecycle in Egypt, they rarely get to the long term. (Due to corruption and apathy, things deteriorate, a place develops a reputation of being "old news" and everyone with money flocks to the "next big thing" while the old thing dies off), which in some cases just straight up leaves the mess for the locals to clean up (in cases of refineries/factories)

I have to disagree here also. With a government owned enterprise [snip] to assume "a negative benefit to the community."

Partially see the previous, in addition, you're assuming a functional government; Most of the time these privatizations go tax free or with stupidly low taxes to "encourage investment" or they get exempted through some backdoor deal where instead of paying taxes, someone gets like half the taxes amount in a bribe and the factory is now exempt from taxes. Do not underestimate how rampant corruption is in Egypt.

As for the layoffs, they don't actually have to import employees. They'll just fire 20-40% or whatever, and the others have to keep up. Public employees have more protections in that they generally cannot be fired randomly (i mean they can, and it's a long hassle to get their job back/compensation, but it generally doesn't happen that often because it's a headache to all involved), private employees can.

In some cases, yes the factory is modernized with new equipment or whatever so that less people are needed which makes the company more profitable, but reduces the benefit to the community because now more people are laid off.

Furthermore, the majority of these factories are actually out in the middle of no where ( You can see them while driving down "interstate" desert roads like the Cairo-Ismallia highway), and people basically commute there. Yeah you'll see the occasional food cart and maybe minibuses around the factory, but with less people to go to these places, there's less profit for either.

There are factories in the middle of cities (smaller factories like sweet factories and whatever), of which the majority I've seen were moving to the middle of no where, but there's no real benefit to the surrounding community when the worker numbers decrease.

Just to be clear, again I'm not an economist. I am not taking a stance of if it's moral or not or whatever like that, just stating observations.

Okay, but that's not capitalism, as the author stated. Nor, [snip] the author as saying that, however.

Not sure if the OP meant all privatization or otherwise, but like i said, in many of the cases, the privatization DOES go to a non-military individual, just someone who "Retired from the military" or is a friend or relative of a military member, or provided the biggest payback....etc

In other words, the bidding process and all that is a complete and utter sham.

There's a reason i put quotes around "Privatization", it's basically crony capitalism.

Actually, the whole point is that people in the US and Europe could [snip] wasn't one of my examples for a reason.

Frankly as obvious by the dozens of cases of multinationals and their actions, I honestly don't think anything would happen to them. We still have companies in the US/EU that knowingly use slave/child/abusive labor in 3rd world countries and they're not punished. But I digress; I basically mean that these companies have nothing to fear from the Egyptian government.

Yes, and those subsidies were bankrupting the country. [snip] leading to more spending on subsidies, devaluing the Egyptian Pound, causing more inflation, and so on and so on.

You'd be correct, but, I suspect, not for the reasons you've mentioned.

They weren't directly related, The reason i'm saying i suspect it would've happened anyway, is because i agree the subsidies are/were (alongside the rampant corrupt) bankrupting the country. It's not a stretch that without half (hyperbole) the GDP being skimmed and stolen by one entity or another, that the subsidies wouldn't have been as big a deal (they still would've been a problem).

In any case, i wasn't trying to defend subsidies, I'm just saying the previous regime was using them to keep people thinking they gave a shit about them.

I disagree. It's a great example of cronyism and authoritarianism. I'm not sure where your definition of capitalism comes from, but it seems that Egypt doesn't come close to the dictionary definition.

A truly capitalist country wouldn't be able to seize people's homes without compensation. A truly capitalist country wouldn't have massive parts of its economy owned and operated by the government. A truly capitalist country, there wouldn't be price controls bankrupting the country.

I assume you're looking at the optimal version of capitalism, which i agree doesn't match, but unfortunately for Egypt (and other countries), as long as Money is #1 , power soon follows and it falls apart. The Military in Egypt acts as a government, but it's also acts as a "public sector" capitalist. It's screwed up and honestly hard to explain what i mean on this.

My point is, Egypt is in a way uncontrolled capitalism, where money buys you power (provided you don't challenge the rulers). You have basically the ability to do anything, crush any competitors in any fashion due to the lack of regulation and law enforcement...etc

It's very very obvious living there.

Tell that to Mubarak's very wealthy sons. It's a poorly managed, corrupt country, but it's not capitalist.

They're actually doing fine. The Mubarak's have been going around the country doing their own thing, they're just keeping a low profile, and their "imprisonment" was a widely acknowledged joke, since they had better conditions than the majority of the "Free" citizens have. So far they're likely to get no more than a slap on the wrist.

HOWEVER, keep in mind, it's also "who you know" and what conditions; In this case (and as suspected by the majority of the Egyptian populace), the Regime weren't really fans of the Mubarak kids, and wanted to get rid of them, and 2011 was a good opportunity for them to do so.

In other words, if you stay out of politics, Money gets you anything.

Edit: Keep in mind one thing though, it's maddening trying to explain things in Egypt to someone that hasn't experienced living there, because there effectively are no "Rules" not in terms of laws, but in things of how things are. There are a million and 1 variants and exceptions to things i mentioned & things i haven't. The only real rule if you're an Egyptian without money or power is "You're fucked".