Published: September 19, 2009 in New York Times

CAIRO — It is unlikely anyone has ever come to this city and commented on how clean the streets are. But this litter-strewn metropolis is now wrestling with a garbage problem so severe it has managed to incite its weary residents and command the attention of the president.

“The problem is clear in the streets,” said Haitham Kamal, a spokesman for the Ministry of State for Environmental Affairs. “There is a strict and intensive effort now from the state to address this issue.”
But the crisis should not have come as a surprise.

When the government killed all the pigs in Egypt this spring — in what public health experts said was a misguided attempt to combat swine flu — it was warned the city would be overwhelmed with trash.

The pigs used to eat tons of organic waste. Now the pigs are gone and the rotting food piles up on the streets of middle-class neighborhoods like Heliopolis and in the poor streets of communities like Imbaba.

Ramadan Hediya, 35, who makes deliveries for a supermarket, lives in Madinat el Salam, a low-income community on the outskirts of Cairo.

“The whole area is trash,” Mr. Hediya said. “All the pathways are full of trash. When you open up your window to breathe, you find garbage heaps on the ground.”

What started out as an impulsive response to the swine flu threat has turned into a social, environmental and political problem for the Arab world’s most populous nation.

It has exposed the failings of a government where the power is concentrated at the top, where decisions are often carried out with little consideration for their consequences and where follow-up is often nonexistent, according to social commentators and government officials.

“The main problem in Egypt is follow-up,” said Sabir Abdel Aziz Galal, chief of the infectious disease department at the Ministry of Agriculture. “A decision is taken, there is follow-up for a period of time, but after that, they get busy with something else and forget about it. This is the case with everything.”

Speaking broadly, there are two systems for receiving services in Egypt: The government system and the do-it-yourself system. Instead of following the channels of bureaucracy, most people rely on an informal system of personal contacts and bribes to get a building permit, pass an inspection, get a driver’s license — or make a living.

“The straight and narrow path is just too bureaucratic and burdensome for the rich person, and for the poor, the formal system does not provide him with survival, it does not give him safety, security or meet his needs,” said Laila Iskandar Kamel, chairwoman of a community development organization in Cairo.

Cairo’s garbage collection belonged to the informal sector. The government hired multinational companies to collect the trash, and the companies decided to place bins around the city.

But they failed to understand the ethos of the community. People do not take their garbage out. They are accustomed to seeing someone collecting it from the door.

For more than half a century, those collectors were the zabaleen, a community of Egyptian Christians who live on the cliffs on the eastern edge of the city. They collected the trash, sold the recyclables and fed the organic waste to their pigs — which they then slaughtered and ate.

Killing all the pigs, all at once, “was the stupidest thing they ever did,” Ms. Kamel said, adding, “This is just one more example of poorly informed decision makers.”

When the swine flu fear first emerged, long before even one case was reported in Egypt, President Hosni Mubarak ordered that all the pigs be killed in order to prevent the spread of the disease.

When health officials worldwide said that the virus was not being passed by pigs, the Egyptian government said that the cull was no longer about the flu, but was about cleaning up the zabaleen’s crowded, filthy, neighborhood.

That was in May.

Today the streets of the zabaleen community are as packed with stinking trash and as clouded with flies as ever before. But the zabaleen have done exactly what they said they would do: they stopped taking care of most of the organic waste.

Instead they dump it wherever they can or, at best, pile it beside trash bins scattered around the city by the international companies that have struggled in vain to keep up with the trash.

“They killed the pigs, let them clean the city,” said Moussa Rateb, a former garbage collector and pig owner who lives in the community of the zabaleen. “Everything used to go to the pigs, now there are no pigs, so it goes to the administration.”

The recent trash problem was compounded when employees of one of the multinational companies — men and women in green uniforms with crude brooms dispatched around the city — stopped working in a dispute with the city.
The government says that the dispute has been resolved, but nothing has been done to repair the damage to the informal system that once had the zabaleen take Cairo’s trash home.

The garbage is only the latest example of the state’s struggling to meet the needs of its citizens, needs as basic as providing water, housing, health care and education.

The government announced last week that schools would not be opened until the first week of October to give the government time to prepare for a potential swine flu outbreak, a decision that could have been made anytime over the past three months, while schools were closed for summer break, critics said.

Officials in the Ministry of Health and other government ministries said they had not made this decision — and that they had counseled against pre-emptive school closings.

It appears to have been ordered by the presidency and carried out by the governors, who also ordered that all private schools, already in class, be shut down as well.

“We did not propose or call for postponing schools, so the reason is not with us,” said an official in the Ministry of Health who spoke on the condition of anonymity because the person was not authorized to speak to the news media.

The heads of three large governorates, or states, in Egypt announced Wednesday that their strategy for keeping schoolchildren safe was to take classes, which on average are crowded with more than 60 students, and split them in half and have children attend school only three days a week, another decision that was criticized. There have been more than 800 confirmed cases of H1N1 in Egypt, and two flu-related deaths.

“The state is troubled; as a result the system of decision making is disintegrating,” said Galal Amin, an economist, writer and social critic. “They are ill-considered decisions taken in a bit of a hurry, either because you’re trying to please the president or because you are a weak government that is anxious to please somebody.”

Cairo’s streets have always been busy with children and littered with trash.
Now, with the pigs gone, and the schools closed, they are even more so.

“The Egyptians are really in a mess,” Mr. Amin said.

The intrinsic link between government controlled food subsidies and wages leaves the majority of Egyptian population incredibly vulnerable to even the smallest changes. In 1997, according to the IFPRI, the total cost of food subsidies reached 1.1 billion Egyptian Pounds (LE). Government regulated food redistribution depends upon import of wheat from the United States due to the fact that Egypt does not produce enough for domestic consumption – thus the exchange rate plays a huge role in the ability of the Egyptian government to subsidize the food. In 1997 the exchange rate was 3.40LE : $1 but in little over a decade the exchange jumped to 5.59LE : $1 – over the last decade it has become increasingly more expensive for the government to purchase food on behalf of the people. Taxes cannot be increased when it may endanger the people’s entitlement to the already subsidized food. Therefore the result is a forced reduction of public spending in vital sectors like education, health, and sanitation.

So what are the consequences of having controlled wages in a market that is incapable of sustaining the prices? Consider David Ricardo’s speech to the parliament in 1822:

“The people are dying or want of food in Ireland, and the farmers are said to be suffering from superabundance… the honorable gentleman thinks there is a manifest contradiction… [but] where was the contradiction in supposing that in a country where wages are regulated mainly by the price of potatoes the people should be suffering the greatest distress if the potato crop failed and their wages are inadequate to purchase the dearer commodity corn”

The presence of food within the territorial borders matter very little unless the people are able to purchase it. The condition of wages derived by potato harvest in 19th century Ireland is replicated by government controlled wages in Egypt – while intended to parallel the cost of living, controlled wage cannot adequately accommodate the various circumstances of individuals or even fluctuations in a state controlled market. What happens in the place of equity is an overall seizure of consumer choice. Egypt has not been reduced to the desperate conditions of Ireland during the potato famine yet – nonetheless, the people’s ability to readily purchase food is under threat.

The described entitlement failure has created an immobile society where the poor cannot divert attention from the procurement of basic income because the price of food continues to increase despite serious cuts in government spending (and disturbing mismanagements). The result is the establishment of a class society with the majority of the population grounded in their respective neighborhoods and professions. A definite juncture on the road to serfdom.

Food subsidies should be gradually eliminated, but this would take something close to a political revolution since it’s generally agreed amongst scholars that the government is more interested in procuring consent by providing cheap food – It is crucial that Egyptian politicians realize that subsidizing food equates to national suicide, especially when there is no circus to accompany the bread.

So what will the liberalization of food distribution achieve?

In the short term the price of food (especially bread) will increase – this achieves two important tasks:

1) The rich will consume less, decreasing the demand for basic grains like wheat which can be redistributed in the form of cheap bread – baked with other filler grains to maximize the quantity but minimize the cost per loaf (In fact, this is what IFPRI suggested in its 2001 report). With Egypt’s growing obesity problem, the cut back on carbohydrates should be a good thing. Joking aside, since the subsidized bread is consumed by all social classes, as the government seeks to phase out the bread subsidies, those who can afford non-subsidized bread should be taken off the state payroll first.

2) End to government intervention will encourage private enterprises to take their own initiative in provide affordable food for their own profit. Many Egyptians are enterprising. Many are conducting illegal enterprises smuggling government subsidized bread and selling them to private bakeries – they should have no problems lowering costs and entitling the masses to more food with their somewhat backhanded entrepreneurship. Furthermore, a robust food distribution sector will encourage a more expansive food production sector.

This is a rudimentary sketch, but the skeleton of my grievance and theory are present – A free Egypt, capable of feeding itself, is the best deterrence against its frequent outbursts of violence. A dash of Thatcherism is what the Arab Republic needs – and if both Hosni or Gamal Mubarak cannot fulfill the iron role, they should step aside.

Horreya!

The time period described in history as The Crisis of the Third Century marks the beginning of the Roman Empire’s decline and the beginning of serfdom in western Europe. It was a crisis of unprecedented political upheaval in Rome, marked with soldier emperors who waged constant civil war to overthrow or conserve their regimes. This was possibly an inevitable consequence of continued military expansion and warfare.

After hundreds of years of financing public expenditure through ransacking every nation in reach, from Judea to Dacia to Britannia, the Roman Empire’s political economy came to a crisis. According to Pedan, “the army itself had grown from the time of Augustus, when they had about a 250,000 troops, to the time of Diocletian, when they had somewhat over 600,000.” In order to satisfy the growing army, the emperors raised “the soldiers’ pay from 225 denarii (silver) during the time of Augustus to 300 denarii in the time of Domitian, about a hundred years later. A century after Domitian, in the time of Septimius, it had gone from 300 to 500 denarii; and in the time of Caracalla, about 10 years later, it had gone to 750 denarii.”

In order to maintain the military and continue warfare abroad in Parthia and Germania, the Roman emperors decided to increase the coinage in circulation by reducing the amount of silver contained in their coinage (the denarius). The result was the debasement of the gold coins and hyperinflation which continued on even after Emperor Diocletian established political stability in 293. Although Diocletian “fixed the price at 50,000 denarii for one pound of gold. Ten years later it had risen to 120,000. In 324, 23 years after it was 50,000, it was now 300,000. In 337, the year of Constantine’s death, a pound of gold brought 20,000,000 denarii.”

As a consequence of this monetary disaster, just between 258 and 275, prices rose 1000 percent. In order to curb rapidly rising prices, Diocletian issued his “Edict on Maximum Prices” in 301 AD. This imposed government price control over the entire range of the Roman Empire.

Professor Pedan explains the result:

“You have to realize that there was a little problem: the Roman Empire was a vast region running from Britain in the West to Iraq in the East; from the Rhine and the Danube to the Sahara.

“It included areas of very sophisticated and very primitive economies, and thus the cost of living varied considerably from province to province: Egypt seems to have had the lowest cost of living; Palestine had a cost of living twice that of Egypt, and Roman Italy had a cost of living twice that of Palestine.

“The result of that, of course, was riots in the street, and the disappearance of goods.”

As a result, there are records of banks in Egypt refusing to accept government issued coins. Forget about the masses who are suffering from a catastrophic loss of entitlement, how does the Roman Empire continue to appropriate enough resources and materials for defense and such? Professor Pedan explains:

“Now, the merchants and the artisans were traditionally organized into guilds and chambers of commerce and that sort of thing. They now, too, came under government pressure because the government could not obtain enough material for the war machine through regular channels… So merchants and artisans were now compelled to make deliveries of goods. So that if you had a factory for making garments, you now had to deliver so many garments to the government requisitions. If you had ships, you had to carry government goods in your ships. In other words, what we have here is a kind of nationalization of private enterprises, and this nationalization means that the people who use their money and their talent are now compelled to serve the state whether they like it or not.”

In order to retain this source of free labor and service, the imperial government than issued an order eradicating social mobility. This order went all the way down to arguably the most important class of people: the peasantry.

Formerly a free class of people who offered their services for pay were now bound to their leased land, forever locked in their class and occupation (and their sons and their sons and so forth). This was the origin of serfdom.

The decline of the empire after the third century hardly needs an explanation to the modern reader. A society as complex as the Roman Empire needed extensive division of labor with individuals motivated to maximize production for their own self interest. Pursuing self interest does not necessarily mean greater monetary gain as many Romans donated vast sums of money for the improvement of public infrastructure such as baths and roads with only public recognition in mind. Such desires also vanished with the solidification of social classes. The worst hit sector of the empire (besides, funny enough, defense) was agricultural production which lay at the foundations of commerce and economy. With loans becoming not just difficult but confusing with the continuous devaluations of currency, small farms eventually gave way to large estates that could bear the insane tax burden. Microeconomics teaches us the adverse effects that monopoly plays on production and prices. Those rules were still in effect in the antiquities.

In short, the mobility and freedom of people best ensures the greatest circulation of goods while government intrusion of stability through warfare or inappropriate expropriations endangers the survival of the entire society. As the U.S. continues the war in Afghanistan, there are lessons to be learned. It’s not just our bank accounts that are at stake, but our liberty and lives as well.

“According to the World Bank, the air in Cairo has the world’s highest lead content, eight times over the internationally accepted safety level. Egyptian industries are estimated to dump at least ten tones/minute of solid waste, 33% of which goes into uncontrolled landfills, canal banks and drains.

“[The World Bank] also noted that about 90% of Egypt’s used water goes untreated, while around 50% of industrial wastewater is discharged unmonitored.”

Agricultural production plays an indispensable role in the development of public wealth and affluence. In the current condition, not only is food production checked by pollution, but individual productivity is checked by declining levels of public health.

The CIA world fact book (2009) records that of the Egyptian people 65 years and older 2,299,875 are female while only 1,701,068 are male (1.35 females to every one male). Compare this figure to neighboring Libya’s ratio of elderly women to men (138,453 females to 133,092 males – 1.04 females to every one male) clearly reveals a society wreaked by health problems. (Even PR China sports a more moderate figure of 1.09 elderly females for every one elderly male)

One doesn’t need to stay long in Cairo to recognize the serious problems in hygiene and sanitation. Under these circumstances, it is hardly surprising that self-destructive farming methods that could potentially devastate the entire population continue on a regular basis.

We need to recognize that a big part of the problem is the government’s insistence on inappropriate subsidies. Enormous government spending maintains both oil subsidies and costs incurred by damages from air pollution. The government needs to encourage greater usage of public transportation while transferring public spending from oil subsidies to the maintenance of sanitation in urban and industrial areas.

Clean up Egypt! or the shackles of poverty will forever grip your rotting ankles!

In his preface Professor Lewis points to three key issues:

First, the promotion of Green Revolution technology without regard for its social and ecological consequences;

Second, the surrender of agriculture policies and farming communities to strategies aimed at rapid urban industrialization; and

Third, indiscriminate liberalization policies which allow the entry and dominance of extremely powerful multinational agribusinesses.

A fascinating survey of Egyptian agriculture through the ages. He hits home the importance of agriculture to development and resolving world hunger.

As far as western politicians are concerned, I have only this to say: Reducing world hunger and increasing the wealth of all peoples are both very possible goals. If one is given popular political mandate then one should act upon it to create the foundations for a long term solution, even if it means angering farmers and fishermen in the short term – Who really governs? The people or the rich agricultural lobby? Time has come for the west to cut subsidies. It’s really too long overdue.

Today I had the pleasure of listening to a lecture by Amitav Ghosh and once again found evidence that irregardless of location, culture, or background, enterprising individuals will bring greater wealth to their region than any government initiative. Wealth redistribution can and will occur naturally if people are given enough liberties to act upon their entrepreneurial instincts. From his lecture one can actively discern the growth and decline of rural communities in the Nile Delta region in the 1970s, 80s, and 90s.

Ghosh spent a great deal of time living in the Nile Delta as part of his anthropological field work. When he arrived the villages had no running water or electricity. The purchase of water pumps during the author’s stay from his native country, India, was highlighted with some comedic effect in the lecture, but represent real changes and improvement in the lives of the Egyptain fellaheen. Later when Ghosh returned to the village he found it almost devoid of young men who had left Egypt to work in the oil rich sheikdoms of the gulf. Despite this demographic shift, the money that was sent back had given the village an unprecedented boost. Ghosh described the new village as almost “unrecognizable”. The period between the end of the Yom Kippur War and the Gulf War seems to have been the golden age for the Egyptian fellaheen. This was not only a golden time for the rural communities but also for the urban centers as many long time residents and visitors to Cairo have explained to me.

This short period of wealth came to an abrupt end in 1990 with the onset of the Gulf War. By the end, the sheikdoms of Kuwait, Qatar, Bahrain, UAE, etc. became wary of Arab immigration and substituted Egyptian and other imported Middle Eastern labor with that of Indian and Indonesian labor. This suddenly severed the source of wealth that had so strongly driven the socio-economic changes in the delta region.

Upon his third visit to the village, Ghosh found a disgruntled population, unemployed and turning increasingly towards fundamentalism. Here, Ghosh brings his lecture to its darkest point.  Mohammed Atta, one of the hijackers in the 9/11 attacks on New York, was from the Nile delta region, close to where Amitav Ghosh stayed for his field research. Ghosh himself seems haunted by the rapid decline of the rural communities.

This presents another example of how state and political intervention has led to not only economic decline but has also  indirectly caused great human tragedy. The Gulf War despite all its “clean” tactical victories indelibly left a huge scar across the Middle East and among other things, the skyline of New York. This is not to say that the US and the coalition should not have defended the sovereignty of Kuwait in 1990/91, but rather to reflect upon the unintended consequences of long term political interference in the Middle East. Nations are left to their own devices. Peace, economic liberty, and freedom of movement all have tremendous impact upon the global society.

What this lecture by Ghosh has vested in me is the justification for a foreigner to critically comment upon the affairs of the Egyptian society, politics, and economics. Every nation and person, however small or seemingly insignificant, has the potential to decisively impact the lives of every other nation and person on the planet. The impoverished Nile delta region that Ghosh had stayed in had done just that. As individuals we must defend socio-economic and political freedoms, for our very lives may stand tested against an illiberal world void of aspiring people endowed with life, liberty, and the pursuit of happiness.

C. Tariq’s fiery essay is revealing in how little the socio-political environment of Egypt has changed. In 1938, 163 out of every 1000 Egyptian infants died before reaching the age of one. These are truly shocking statistics by today’s standards as only countries like Afghanistan and Somalia have infant mortality rates that high. Tariq compared Egypt’s shockingly high infant mortality rate to England’s 52 infant deaths out of 1000 births in 1938. The figures were intended to demonstrate the devastating effects of British policy to keep Egypt backwards and underdeveloped. So how much has Egypt improved since then under Nasser, Sadat, and Mubarak?

According to the CIA world fact book Egypt’s infant mortality is currently 27.26 out of 1000 while England’s infant mortality rate was 4.85/1000. These numbers come out to mean 83% decrease in Egypt and a 90% decline in infant deaths in England since 1938. Though impressive upon first glance, Egypt has only managed to trail closely behind England’s rate of decline while still suffering from a relatively high infant mortality rate. All this despite advances in oral hydration therapy, polio vaccinations, eradication of smallpox, etc. In another words, 57 years of progress under authoritarian state intervention has actually resulted in no outstanding progress in Egypt which still suffers from outbreaks of typhoid and various other viral and bacterial calamities. These human tragedies are exacerbated by the government’s censorship of information.

On the eve of the revolution C. Tariq blamed:

“low wages paid to the Egyptian workers and the low prices paid for the products bought from the peasant… imperialism is interested in keeping the countryside in the most backward conditions, so that it will be an inexhaustible reserve of labour power and cheap raw materials… only backward, illiterate, sick masses dispersed in tiny villages far away from one another can be ruled easily”

British control over Egypt was indeed “intricately involved in the agrarian question”, for the rural communities were the basic units of colonial rule. The continued mismanagement of the economy, industry, and agriculture under the Egyptian military has since resulted in massive internal migration and food shortages. Clearly more interested in self preservation than the long term preservation of the people, the current regime is intricately involved in inappropriate solutions to the dire question of food entitlement. The state recognizes that government legitimacy is strengthened by ensuring low cost of living for the burgeoning urban poor. By introducing food subsidies, the government keeps the masses in the most backward conditions, so that they will be an inexhaustible reserve of not only cheap labor power but also government supporters dependent upon state-subsidized food. All at the expense of maximizing the distribution of food.

While people may be purchasing cheap food, on the streets of Hedayek El-Maadi and Cairo’s other poorer and more densely populated neighborhoods, it is clear that illiteracy and disease prevention are hardly being looked upon by the public services. Though a large number of Egyptians reside in Cairo, their lack of economic independence makes them just as powerless as they had been in the tiny remote villages.

What had C. Tariq missed?

Tariq could not have foreseen the military cadre replacing the colonial and feudal administrators; however, the violent economic redistribution and seizure of assets that he proposed could have only occurred under illiberal and brutal means. Planning of the economy and society by the state undermined individual creativity and private enterprises for self improvement. These were inevitable consequences of establishing a political system focused on the faceless “masses” or “workers” or “nation” which gave the state legitimacy under utilitarian principles.

In the end, Egypt is back just where they had begun: poor, disgruntled, lost and left behind. Five decades of rule under the military is about to come to an end with Gamal Mubarak expected to assume the position of his father, Hosni Mubarak. It is now our winter of discontent once again, made inglorious by the son of Mubarak. Whether Egyptians are willing to demand from their government greater accountability and greater liberty may well determine the next half century.

An excerpt from Wall Street on the Tundra by Michael Lewis published in Vanity Fair, April 2009:

“This insight is what led Iceland to go from being one of the poorest countries in Europe circa 1900 to being one of the richest circa 2000. Iceland’s big change began in the early 1970s, after a couple of years when the fish catch was terrible. The best fishermen returned for a second year in a row without their usual haul of cod and haddock, so the Icelandic government took radical action: they privatized the fish. Each fisherman was assigned a quota, based roughly on his historical catches. If you were a big-time Icelandic fisherman you got this piece of paper that entitled you to, say, 1 percent of the total catch allowed to be pulled from Iceland’s waters that season. Before each season the scientists at the Marine Research Institute would determine the total number of cod or haddock that could be caught without damaging the long-term health of the fish population; from year to year, the numbers of fish you could catch changed. But your percentage of the annual haul was fixed, and this piece of paper entitled you to it in perpetuity.

Even better, if you didn’t want to fish you could sell your quota to someone who did. The quotas thus drifted into the hands of the people to whom they were of the greatest value, the best fishermen, who could extract the fish from the sea with maximum efficiency. You could also take your quota to the bank and borrow against it, and the bank had no trouble assigning a dollar value to your share of the cod pulled, without competition, from the richest cod-fishing grounds on earth. The fish had not only been privatized, they had been securitized.

It was horribly unfair: a public resource—all the fish in the Icelandic sea—was simply turned over to a handful of lucky Icelanders. Overnight, Iceland had its first billionaires, and they were all fishermen. But as social policy it was ingenious: in a single stroke the fish became a source of real, sustainable wealth rather than shaky sustenance. Fewer people were spending less effort catching more or less precisely the right number of fish to maximize the long-term value of Iceland’s fishing grounds.“

This is indeed government intervention, but one carried out fully with the intent of maximizing the people’s individual economic liberty. Popular capitalism at sea.

Yet I am caught in a Catch-22. In my previous article on Overfishing and Somali Piracy I have argued that militant conflicts in fishing zones will solve itself once fishing rights are straightened out. However, an organized, stable, and clean government is necessary to carry out anything remotely resembling the Iceland Solution.  As I said, it’s a working progress

If American politicians truly wish to keep American ships and sailors safe, their foreign policy should focus on the abuses and negligence of the European Union rather than look to elusive elements such as Muslim militancy.

I want to share an article I wrote a few weeks back on this matter. The economy of fishing is a fascinating subject and one of great importance. It will be to the best interest of the human race to find a way to assure both sustenance and sustainability.

A happy society exists through satiated stomachs and such a commonwealth cannot be fulfilled while the state dictates the appropriate levels of individual consumption.