A nice glance at the purpose of US “humanitarian aid”
The Brotherhood’s new position on economic policy has delighted the United States. US lawmakers have pushed hard since the beginning of the uprising to foster a form of political Islam compatible with US economic interests and the ideology of the Washington Consensus. When Senators John Kerry and John McCain opened the Egyptian Stock Exchange in a made-for-TV moment last June, it was clear to all that the US would seek - in a characteristically cynical move - to hijack the cries for freedom echoing from Tahrir Square in order to promote the “freedom” of deregulated market capitalism.
Some of the most extreme neoliberal measures have been directed at Egypt’s agriculture sector. As a condition for development aid, USAid has required Egypt to shift its formidable agricultural capacity away from staple foods and toward export crops such as cotton, grapes and strawberries in order to generate foreign currency to pay off its burgeoning debt to the US.
According to Columbia University professor, Timothy Mitchell, USAid first began to facilitate this process in the 1980s through its Agricultural Mechanisation Project, which was designed to develop the productive capacity of Egyptian export agriculture by financing the purchase of American machinery.
In the end - despite USAid’s projections to the contrary - the programme did very little to help common farmers. Instead, it disproportionately benefitted the few large landholders who could afford to take out the loans, while slashing the demand for agricultural labour and causing rural wages to plummet.
To propel the transformation to export-led agriculture, USAid forced the Egyptian government to heavily tax the production of staples by local farmers and to eliminate subsidies on essential consumer goods like sugar, cooking oil and dairy products in order to make room for competition from American and other foreign companies.
To ameliorate the resulting food gap, USAid’s so-called “Food for Peace” programme provided billions of dollars of loans for Egypt to import subsidised grain from the US, which only further undercut local farmers. The result of all of this “agricultural reform” was an unprecedented spike in food prices which made livelihoods increasingly precarious and forced much of the workforce to accept degrading and dehumanising labour conditions. The widespread social frustrations that resulted from these reforms helped spark the 2011 uprising.
Similar forms of neoliberal shock therapy been applied to the public services sector. USAid has aggressively pushed for so-called “cost-recovery” mechanisms, a euphemism for transforming public healthcare and education into private, fee-based institutions. Indeed, USAid typically spends nearly half of its health and education budgets - more than $100-million per year - on privatisation measures.
This has been fantastic for multinational medical companies, as it translates into greater dependence on imported drugs and equipment. For Egyptians, however, privatisation means having to pay large sums on healthcare and education. Mitchell shows that such expenditures - as a percentage of household income - now rank at the second and third highest in the world, respectively.
To make matters worse, Mitchell also demonstrates that USAidís cuts to public service budgets have forced the wage rates of workers in hospitals and schools below the rate of inflation, causing deep income deficits among working-class households.
These destructive, pro-corporate policies get obscured by the rhetoric that USAid deploys. According to its website, USAid claims to have helped Egypt become a “success story in economic development”, citing “improvements” in the quality of education and - amazingly - “the administration of justice” (a shocking contradiction, given that the US actively funded Mubarak’s repressive military apparatus and its widespread human rights abuses).
Source: Jazeera