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    Austerity for the Poor and Prosperity for the Rich

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    There has been a growing interest in social protection policies in the Arab region dating back to the 1990s. Yet the impact of such measures has not been empirically and independently assessed. Evidence shows that, even before the COVID-19 pandemic, the poor have been getting poorer and the number of vulnerable groups and people living below the poverty line is increasing.

    Poverty rates have risen throughout a decade of turmoil. This started with the Arab Spring in 2010-11 and intensified when the pandemic began in 2020. The situation is worse in Arab countries where there is ongoing conflict, economic hardship or political crises. These indicators of rising poverty mean the effectiveness of the social protection policies in the region must be placed under critical examination.

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    The Arab Mashreq is a case in point. This region, which consists of Jordan, Iraq, Syria, Lebanon, Palestine and, in some definitions, Egypt, has been marred by prolonged conflict, economic turmoil and political upheaval. In response to the crises, there has been an added focus on people’s resilience mechanisms to cope with the socioeconomic uncertainty.

    From Economic Reforms to the COVID Crisis

    Since 2015, many Arab governments have introduced financial and economic reform policies, supported by the International Monetary Fund. However, in the absence of effective social protection policies, these changes led to a sharp increase in inflation. This exacerbated the hardship of the poor, caused negative repercussions for people’s living conditions and led to further structural social stratification. The negative impact on the poor was accompanied by a political narrative of austerity for a better future. Simultaneously, generous policies were introduced for the upper class.

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    The policy response in Mashreq countries to the pandemic was not an exception from this inequality paradigm. The poor have been excluded in the design of policy responses. The fragile health sectors and the coverage gap of medical insurance generated an association between appropriate recovery and the upper class. Accordingly, access to quality care was exclusively for the rich. On the other hand, the poor had to rely on public health, which is often underfunded, understaffed and lacks sufficient resources.

    In addition, government support in the form of loans and financial subsidies to recover from the economic fallout of the pandemic was directed exclusively at big businesses. This led to the shutdown of many small and medium-sized enterprises (SMEs) and caused unemployment to rise in all Mashreq countries.

    Moreover, refugees and internally displaced people were left behind in the policy response. Instead of prioritizing their needs as vulnerable people, they faced restrictions on moving out from overcrowded camps due to the lockdown measures, which exacerbated their plight. In particular, they suffered from a lack of access to health services and malnutrition.

    Resilience Mechanisms

    In the Mashreq, people have used different coping and resilience mechanisms throughout the pandemic. Yet defining what appears to be the relatively simple concept of resilience is complex. Resilience is a term that has been applied to research and practice in nearly every possible area of life and academia — from science to sociology, psychology, nursing and medicine to business and ecology. The theoretical definition of resilience is “one’s ability to bounce back or recover from adversity.” Research on coping with poverty emphasizes the importance of resilience mechanisms to be considered in the design, development and implementation of social protection policies for the prevention of risks associated with irrational resilience mechanisms.

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    Some resilience mechanisms in Arab Mashreq countries are constructive. For instance, there has been a rise in transnational family support, including remittances, and a revival in the agricultural sector due to food shortages. Dual-earner households have also increased as more women are joining the labor force. Yet the majority of reported resilience mechanisms are destructive. Seven areas are particularly important.

    First, reports show increasing numbers of children who have ab­stained from going to school or dropped out altogether, often due to rampant poverty. In recent years, economic reform policies have included a sharp reduction of fuel, electricity and water subsidies. This has led to higher living costs. In response, children have been forced to work to earn money and contribute to the family income. The pandemic has made the situation even bleaker with the new educational setup, as not everyone has access to computers or the internet. The lack of technological infrastructure has meant the poor are excluded from the online classes introduced by lockdowns.  

    Second, even before the pandemic, leftover or used food markets emerged in countries such as Jordan and Egypt. At these places, the poor can buy food at reduced prices. These markets, which sell scraps of food, have become increasingly common in areas with people on low incomes. Often, the remains of meals from restaurants and hotels are offered to families at a discounted rate, with many food items unpackaged and no information as to where or when they were made. Some customers have said that no matter the quality, they are in need of the low prices as they cannot afford to buy other food products.

    Third, the cut in subsidies and rising food prices have not only affected the poor. Many middle-class people cannot afford quality food due to the increase in prices and their depleted family savings. This has been exacerbated by economic hardship and the pandemic. This is particularly the case in Lebanon, where the lira (or pound) has lost most of its value, leading to higher costs of living. Lebanese people are reportedly cutting out meat from their diets or skipping meals. In Iraq, throughout the COVID-19 crisis, people have been forced to sell their furniture and personal items, just for the sake of buying food. Many Iraqis have lost jobs and the country lacks social protection measures.  

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    Fourth, in response to the rising prices of medicine in the region, people have turned to traditional medicine and herbal remedies instead. For instance, due to the loss of more than 90% of the Lebanese pound’s value, there has been a shortage of essential medicines. The catalyst behind this was the ongoing national economic crisis in Lebanon and the state measures on lifting subsidies on medicine. Pharmacies often lack basic medications for blood pressure and even painkillers and antibiotics.

    Fifth, to cope with poverty, mothers are joining the informal sector in order to have dual-earner families. Daughters have also joined the workforce. But the problem is that this sector is not covered by any social protection schemes, which means that families struggled during the height of lockdowns to curb the spread of COVID-19.

    Sixth, the unprecedented rise in food prices has led some of the poor to buy their daily needs of food products via the postpaid system, or the so-called popular “note.” This system, known as shokok, is based on mutual trust between grocery store owners and residents in poor areas. As part of shokok, a shop owner archives either daily or weekly the merchant records of customer withdrawals on a note before collecting the cash at the end of each month.

    Seventh, the United Nations and several media outlets have reported increased rates of crimes, drug abuse, robberies and rising cases of suicide as some people struggle to cope with poverty and hardship.

    In light of these resilience mechanisms, social protection systems have to be rethought in Arab Mashreq countries. When left behind, most vulnerable people generate their own forms of resilience, which might be destructive. To a major extent, the policy response is designed for the poor to fund the rich. However, the unmet needs of the poor are not only affecting their wellbeing negatively, but it will also impact the state in the long term.

    The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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      in World Politics

      US Must Call Out Egypt Over Human Rights Record

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      In 2013, Egypt’s first democratically elected president, Mohamed Morsi, was overthrown in a military coup. At the same time, the 2012 Egyptian Constitution was suspended. Shortly after, in 2014, the former defense minister and commander of the armed forces, General Abdel Fattah el-Sisi, a central figure in the coup, was elected president in a landslide victory. Since then, Sisi has instituted what is arguably one of the most oppressive regimes in Egypt’s history.

      According to data collected from the Arab Network for Human Rights, there has been a threefold rise in the number of death sentences handed down by Egyptian courts, increasing from 800 over the six years prior to 2014 to more than 3,000 since Sisi came to power. Moreover, Reuters reports that “At least 33 civilians were executed following trials in military courts from 2015” compared to none between 2008 and 2014. President Sisi has thrown countless journalists in jail and intensely limited freedom of speech as almost all websites that are believed to be critical of the government have been blocked since 2017.

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      In addition, one of Sisi’s first actions as president in 2014 was to dramatically slash subsidies for fuel and food. According to the Atlantic Council, this led to a 78% price increase on gasoline and a 175% price increase on natural gas — a big hit for a country where 33% of the population was classified as poor in 2018, up from 28% in 2015.

      The Protests

      Over the course of Sisi’s rule, the government has effectively quelled all protest through rough detention practices, inhumane prison conditions and harsh military crackdowns. However, in September last year, Egypt saw its first major protests since 2013. The demonstrations began when Mohamed Ali, a 45-year-old Egyptian actor and former building contractor living in self-imposed exile in Spain, posted videos on social media criticizing corruption in government. In his videos, Ali encouraged Egyptians to protest in the streets and called for Sisi’s removal. Though these videos were blocked within hours of posting, Ali’s message spread like wildfire throughout Egypt. 

      As a result of Ali’s call for action, protests broke out in at least eight cities. Citizens from all walks of life, but mainly young people, took to the streets and chanted “rise up, fear not, Sisi must go” and “the people demand the regime’s fall.” Hundreds of residents, mainly from working-class backgrounds, also stormed a popular football match. The government responded with rubber bullets and tear gas in an attempt to quell the protests, establishing a heavy presence around Tahrir Square in the center of Cairo, the site of the 2011 uprising that brought down Egypt’s long-serving dictator, Hosni Mubarak. By establishing a military presence in Tahrir Square, the government sent a strong message to the people of Egypt: There will be no repetition of the January 25 Revolution. 

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      Following the protests, more than 3,120 people were arrested, according to the Egyptian Commission for Rights and Freedoms. Based on data from Amnesty International, over 2,300 were arrested, including at least 111 children, “some as young as 11, with several detained on their way home from school.” Government officials also searched protesters’ phones and social media for anything it could use as evidence against them. These actions taken by the government have been heavily criticized by rights groups as unconstitutional. 

      The COVID-19 pandemic has only furthered Sisi’s authoritarian grasp as the regime ratified 18 new amendments to Egypt’s emergency laws. Some of these new amendments make sense given the current context of the situation as they give President Sisi the right to close schools and universities, to mandate hospitals to work together with the government to resolve the crisis and also to control scientific laboratory work. In addition, these new developments allow the president to ban public gatherings and processions given that the transmission of COVID-19 at large public events is extremely dangerous. 

      However, while these laws may be beneficial in the short term, they also pose extremely concerning questions for Egypt’s future. As Human Rights Watch points out, just five of the 18 amendments “are clearly tied to public health developments.” For example, Article 13 allows the president to “restrict public and private meetings, processions, and any other forms of gatherings” regardless of whether there is any actual health crisis. Furthermore, these changes give Sisi greater leverage over the economy as he can regulate prices of various goods and “determine methods of collecting monetary and in-kind donation.” By ratifying these amendments as part of emergency legislation, authorities will be able to strictly enforce these measures whenever they wish. 

      Egypt’s Relationship With the United States

      Given the ever-increasing power of the Sisi regime and the government’s disregard for freedom of speech and basic human rights, the seemingly most honorable option for Washington would be to sever its relationship with Cairo and withdraw economic and political support. However, the relationship between Egypt and the United States is becoming more important for both nations, who have historic ties dating back to the Cold War. Egypt’s geographical positioning gives a unique influence in the region, inviting more than $40 billion in military and $30 billion in economic assistance from the US since 1980.  

      The United States and Egypt have common interests in limiting Iran’s influence in the Middle East as well as curtailing the spread of radical movements in volatile states like Iraq and Syria. Both the US and Egypt have a strong relationship with Israel. In addition, though Egypt has been struggling economically, it is still the most populous Arab country, and its control of the Suez Canal is vital for international commerce with an average of 300 million tons of goods passing through its shipping lanes each year. Moreover, Egypt’s transportation routes are beneficial for the US, with two-way trade between the two countries totaling $7.5 billion in 2018.

      And yet while the connection between these two nations is undoubtedly one that must be preserved, the US could slowly begin to withdraw some of its support and show less outward “affection” that has become more apparent during President Donald Trump’s tenure. His support for Sisi stems from an attempt to emphasize US foreign policy objectives of counteracting terrorism, as well as to seem more statesmanlike. This comes in stark contrast to the Obama administration’s freezing of military aid after the 2013 protests against Morsi and the general cooling of relations between the two nations.

      In recent years, Cairo has begun to have a more independent role in regional affairs and is working with the US to reach a deal for Arab-Israeli peace. At last year’s G7 Summit, President Trump has even referred to Egypt’s leader as his “favorite dictator” who is a “great leader” that is “highly respected.” While both nations are benefiting from the relationship, the Egyptian military is heavily dependent on weapons and contractors from the United States. Washington could use this to leverage pressure against Cairo on its human rights record.

      If the US continues to permit a cruel dictator to tyrannize his citizens under an oppressive regime, it is sending a strong message to other nations both in the region and the world that attempts to undermine and subvert democratic principles may be ignored for economic and political control.

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More