The Middle East: Egyptian time bomb ticking under the peace negotiations

The enforced negotiations between Israel and the PLO in Camp David are hiding a deep economic crisis in the whole of the Middle East. Since the birth of Israel in 1948, this state could only maintain itself politically, economically, and militarily, by courtesy of a never ending flow of military and economic aid from the US.


But in the long term, the presence of US imperialism in this highly strategic region, purely concentrated on Israel, has been seen not to be realistic and even counterproductive. Indeed, the alliance with Israel has affected American relations with the Arabic world plus several other countries of the so-called Third World. In the 1980s, following the agreements at Camp David, Israel and Egypt signed a peace treaty and Israel retreated from the Sinai Desert. This was sealed by massive American aid to Egypt. After a short-lived boycott, Egypt was readmitted to the Arab League in 1990 mainly because they could not exist without their natural leader. Ever since, no less than 92 percent of American military aid has gone to just these two countries: Israel and Egypt. On top of this Israel receives each year $1 billion in economic aid from the US, supplemented by other financial favours. For Egypt the respective figure is $775 million.

Therefore the peace of Camp David was heavily subsidised. But in the meantime the core problem, namely the Palestinian question, did not take a single step towards a solution.

Today Israel is prepared to withdraw from southern Lebanon and to start negotiations about the West Bank and later on maybe the Golan Heights. In the end the main reason behind this is the military deadlock and the continual toll in human lives, caused by the occupation. Public opinion in Israel is, each day, turning against this. Hostility against the occupation in the Arab world is also taking a huge economic toll: while the economic recovery in the West during the last years was partially based on free trade areas like the EU and NAFTA, Israel could not create a regional consumption market for its relatively developed industry and agriculture. Moreover, an increasing number of Israeli economists have concluded that the American cash flow "perpetuates the bureaucracy, hampers innovation and undermines the competitiveness". (Jerusalem Institute for Advanced Strategy and Political Studies 1998.)

This economic stagnation has increased social tensions. In 1999, economic growth decreased to 1.5 percent, and unemployment increased to 10 percent, in a situation where Israel for decades knew nothing but almost full employment. Today 1.3 million of the 6 million Israelis live below the poverty line. Still, the fate of the Palestinians in the occupied zones and under the so-called Palestinian Authority is far worse. In 1998 a massive student protest broke out against the rise in tuition fees at the universities. In April 1999 this was followed by a series of strikes in the public sector. To avoid a social explosion, substantial economic growth is needed. The Israeli bourgeoisie can still indulge in illusions about a regional free trade area. Indeed Israel, with its per capita income of $14,000 per year, could get some profits out of such a regional zone because of its privileged relations with Western capital and because of its access to high technology. However, the picture for its neighbour Egypt looks very different.

This "giant of the Middle East" has 65 million inhabitants, 10 times as many as Israel. After South Africa it is the second largest industrial nation in the African continent. Nevertheless, Egypt barely attains a GDP of $600 per inhabitant. The official unemployment rate is 20 percent. In the long term, the American capital injection has proved a total failure. Egypt complains about European import restrictions, but it would not survive trade liberalisation because of the low quality of its products.

For the past few years, opposition has mounted in the US against the exorbitant amounts of money that flow to Israel and Egypt. While the cash flows could not diminish the social contradictions in both countries, and in some respects have even exacerbated these tensions, a new agreement on the West Bank and the Golan heights will make the US aid to Egypt even more irrational. The other Arab countries are also supposed to do the same as Egypt: namely to keep the peace with Israel. Meanwhile Egypt has become addicted to these capital injections. With the prospect of the dollar influx drying up , it is seeking a new potential moneylender in Gadafi's Libya.

No foreign creditor is capable of averting the social explosion in Egypt. There is no room in the capitalist world economy for this country with its limited natural resources and its population pressure. The irrevocable crisis in Egypt ticks on like a time bomb undermining every possible accord about Jerusalem and the West Bank. On the other hand, age-old and culturally highly developed Egypt, with its key position in Africa and the Middle East, has a relatively strong working class and a rich tradition of struggle. The country was, under Nasser, the focus of a radical pan-Arab nationalism. At the same time it learned the limits of such a strategy, while the anti-imperialist responses continue undiminished until today. In the meantime the "fundamentalist alternative" in Iran has passed its zenith and is coming increasingly under pressure from the developing revolution in that country.

Therefore Egypt is predestined to play a leading role in the social revolution of the Middle East and Africa.

By Erik De Bruyn, from the Belgian Marxist newspaper Vonk