chapter  7
Re- scaling Egypt’s political economy: Neoliberalism and the transformation of the regional space
ByADAM HANIEH
Pages 21

In the immediate wake of the 2011 Arab uprisings, commentators frequently drew analogies to an earlier ‘springtime’ of mass discontent, namely Europe 1848 (Zaretsky 2011). In many respects there were striking similarities. First, the teetering rule of outdated autocrats, faced by a precarious coalition of workers, de-classed intellectuals and a mutinous middle class seeking greater democratic space. Novel forms of communication and mobilizing networks helping to draw new social actors onto the political stage for the first time. Then, with spring creeping into winter, the growing spectre of counter-revolution emerging as new centres of power consolidate, finally compelled to turn to the autocratic ways of the old regimes in an attempt to preserve their rule. There is, however, one aspect of the 1848 analogy that has drawn much less attention. Conspicuous in the commentary at the time of Europe’s nineteenthcentury upheavals was the theme of Europe itself. Subtending revolutionary thought from the radicals of France to the Magyar nationalists was the notion that the borders of the ‘nation-state’ – ill-defined and contested as they may have been in continental Europe – were not circumscribed and neatly bounded. They were not simple container-like repositories of social relations. The emerging capitalism of Europe was deeply intertwined, so that the permanency of revolution, alongside the whip of counter-revolution, was, as Marx put it, ‘forced to leave its national soil forthwith and conquer the European terrain, on which alone the social revolution of the nineteenth century [could] be accomplished’ (Marx and Engels 1978: 70). In much the same way, the salience of the region weighs heavy on the recent revolts of the Arab world. Yet while it is clear that the revolutionary movements have gained ‘inspiration’ from one-another, or ‘sparked’ upheavals in neighbouring countries, such descriptions run the danger of reducing the movements to psychological impulses gained through the mass media or some new communications tool. Underpinning this framing is a conception of the ‘region’ as merely an additive function of discrete nation-states. What is missing is a theorization of the region as a region: a conception of how the political economy of the Arab world has developed over the last two decades as an integrated unity of hierarchically-ordered states. Years of neoliberal restructuring have closely tied processes of accumulation across the regional scale. As a consequence, the

Middle East does not consist of a simple collection of nation-states but is marked by ‘internally-related’ social relations that cut across national borders (Ollman 2003).1 Class and state formation at the national scale need to be viewed as both reflecting and simultaneously generating the ‘regional’. It is the latter that looms large over the revolutionary wave of 2011-12. This chapter examines the repercussions of the regional political economy on the character of Egypt’s class and state formation, and hence the trajectories of its ongoing revolution. Egypt has distinguished itself over the last two decades as the region’s leader in neoliberal reforms and is consistently held up by the World Bank and other institutions as a model for neighbouring countries to follow. Concurrent with Egypt’s liberalization, however, has been the growing dominance of the Gulf Cooperation Council (GCC) countries (Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Bahrain and Oman) within the Middle East’s economy. Awash with petrodollars, the GCC has moved to the core of the regional scale. As Egypt opened to the world market through the 1990s and 2000s, Gulf-based capital was a major driver of the changes that ensued. As a consequence, Egyptian capitalism – and the nature of the Egyptian state itself – has become inextricably tied to patterns of accumulation in the Gulf itself. This process bears important implications for how we understand and assess current popular struggles in Egypt. The chapter begins by outlining some of the key theoretical contentions that underlie this argument. Central to these is the character of state and class in contemporary capitalism. The global economy is marked by the pronounced internationalization of capital – a concept that demands a rethinking of notions of class and state formation at the national scale. The chapter then moves to an examination of how the regional political economy has changed over the last two decades. It looks at this in the Egyptian context, tracing the ways that Gulf-based capital has taken a central position in key sectors of the Egyptian economy – notably agribusiness, finance and real estate – as a concomitant process tied to the deepening of Egyptian neoliberalism. The chapter concludes with a discussion of the impact of these processes on the nature of the Egyptian Revolution.