How the economic impact and rapidly accumulating losses caused by the recent (not always non-violent) Egyptian mass revolt hastened the fall of a pharaoh. The pacifist views of the author oblige him to emphasise his preferred non-violent ideology; and so to ignore the many defensive and offensive acts of violence of the protest movement. But the article is useful in illustrating the economic pressures the unrest applied.
Memo to President Obama: Given the absence of intelligent intelligence and the inadequacy of your advisers’ advice, it’s not surprising that your handling of the Egyptian uprising has set new standards for foreign policy incoherence and incompetence. Perhaps a primer on how to judge the power that can be wielded by mass protest will prepare you better for the next round of political upheavals.
Remember the uprising in Beijing’s Tiananmen Square in 1989? That was also a huge, peaceful protest for democracy, but it was crushed with savage violence. Maybe the memory of that event convinced you and your team that, as Secretary of State Clinton announced when the protests began, the Mubarak regime was “stable” and in “no danger of falling.” Or maybe your confidence rested on the fact that it featured a disciplined modern army trained and supplied by the USA.
But it fell, and you should have known that it was in grave danger. You should have known that the prognosis for this uprising was far better than the one that ended in a massacre in Tiananmen Square; that it was more likely to follow the pattern of people power in Tunisia, where only weeks before another autocrat had been driven from power, or Iran in 1979 and Poland in 1989.
Since your intelligence people, including the CIA, obviously didn’t tell you, let me offer you an explanation for why the Egyptian protesters proved so much more successful in fighting off the threat and reality of violence than their Chinese compatriots, and why they were so much better equipped to deter an attack by a standing army. Most importantly, let me fill you in on why, by simply staying in the streets and adhering to their commitment to nonviolence, they were able to topple a tyrant with 30 years seniority and the backing of the United States from the pinnacle of power, sweeping him into the dustbin of history.
When Does an Army Choose to Be Nonviolent?
One possible answer -- a subtext of mainstream media coverage -- is that the Egyptian military, unlike its Chinese counterpart, decided not to crush the rebellion, and that this forbearance enabled the protest to succeed. However, this apparently reasonable argument actually explains nothing unless we can answer two intertwined questions that flow from it.
The first is: Why was the military so restrained this time around, when for 50 years, “it has stood at the core of a repressive police state”? The second is: Why couldn’t the government, even without a military ready to turn its guns on the demonstrators, endure a few more days, weeks, or months of protest, while waiting for the uprising to exhaust itself, and -- as the BBC put it -- “have the whole thing fizzle out”?
The answer to both questions lies in the remarkable impact that the protest had on the Egyptian economy. Mubarak and his cohort (as well as the military, which is the country’s economic powerhouse) were alarmed that the business “paralysis induced by the protests” was “having a huge impact on the creaking economy” of Egypt. As Finance Minister Samir Radwin said two weeks into the uprising, the economic situation was “very serious” and that “the longer the stalemate continues, the more damaging it is.”
From their inception, the huge protests threatened the billions of dollars that the leaders and chief beneficiaries of the Mubarak regime had acquired during their 30 year reign of terror, corruption, and accumulation. To the generals in particular, it was surely apparent that the massive acts of brutality necessary to suppress the uprising would have caused perhaps irreparable harm, threatening its vast economic interests. In other words, either trying to outwait the revolutionaries or imposing the Tiananmen solution risked the downfall of the economic empires of Egypt’s ruling groups.
But why would either of those responses destroy the economy?
Squeezing the Life Out of the Mubarak Regime
Put simply, from the beginning, the Egyptian uprising had the effect of a general strike. Starting on January 25th, the first day of the protest, tourism -- the largest industry in the country, which had just begun its high season -- went into free fall. After two weeks, the industry had simply “ground to a halt,” leaving a significant portion of the two million workers it supported with reduced wages or none at all, and the few remaining tourists rattling around empty hotels, catching the pyramids, if at all, on television.
Since pyramids and other Egyptian sites attract more than a million visitors a month and account for at least 5% of the Egyptian economy, tourism alone (given the standard multiplier effect) may account for over 15% of the country’s cash flow. Not surprisingly, then, news reports soon began mentioning revenue losses of up to $310 million per day. In an economy with an annual gross domestic product (GDP) of well over $200 billion, each day that Mubarak clung to office produced a tangible and growing decline in it. After two weeks of this ticking time bomb, Crédit Agricole, the largest banking group in France, lowered its growth estimate for the country’s economy by 32%.
The initial devastating losses in the tourist, hotel, and travel sectors of the Egyptian economy hit industries dominated by huge multinational corporations and major Egyptian business groups dependent on a constant flow of revenues. When cash flow dies, loan payments must still be made, hotels heated, airline schedules kept, and many employees, especially executives, paid. In such a situation, losses start mounting fast, and even the largest companies can face a crisis quickly. The situation was especially ominous because it was known that skittish travelers would be unlikely to return until they were confident that no further disruptions would occur.
The largest of businesses, local and multinational, are not normally prone to inactivity. They are the ones likely to move most quickly to stem a tide of red ink by agitating the government to suppress such a protest, hopefully yesterday. But the staggering size of even the early demonstrations, the face of a mobilizing civil society visibly shedding 30 years of passivity, proved stunning. The fiercely brave response to police attacks, in which repression was met by masses of new demonstrators pouring into the streets, made it clear that brutal suppression would not quickly silence these protests. Such acts were more likely to prolong the disruptions and possibly amplify the uprising.
Even if Washington was slow on the uptake, it didn’t take long for the relentlessly repressive Egyptian ruling clique to grasp the fact that large-scale, violent suppression was an impossible-to-implement strategy. Once the demonstrations involved hundreds of thousands, if not millions, of Egyptians, a huge and bloody suppression guaranteed long-term economic paralysis and ensured that the tourist trade wasn’t going to rebound for months or longer.
The paralysis of the tourism industry was, in itself, an economic time bomb that threatened the viability of the core of the Egyptian capitalist class, as long as the demonstrations continued. Recovery could only begin after a “return to normal life,” a phrase that became synonymous with the end of the protests in the rhetoric of the government, the military, and the mainstream media. With so many fortunes at stake, the business classes, foreign and domestic, soon enough began entertaining the most obvious and least disruptive solution: Mubarak’s departure.
Strangling the Mubarak Regime
The attack on tourism, however, was just the first blow in what rapidly became the protestors’ true weapon of mass disruption, its increasing stranglehold on the economy. The crucial communications and transportation industries were quickly engulfed in chaos and disrupted by the demonstrations. The government at first shut down the Internet and mobile phone service in an effort to deny the protestors their means of communication and organization, including Facebook and Twitter. When they were reopened, these services operated imperfectly, in part because of the increasingly rebellious behavior of their own employees.
Similar effects were seen in transportation, which became unreliable and sporadic, either because of government shutdowns aimed at crippling the protests or because the protests interfered with normal operations. And such disruptions quickly rippled outward to the many sectors of the economy, from banking to foreign trade, for which communication and/or transportation was crucial.
As the demonstrations grew, employees, customers, and suppliers of various businesses were ever more consumed with preparations for, participation in, or recovery from the latest protest, or protecting homes from looters and criminals after the government called the police force off the streets. On Fridays especially, many people left work to join the protest during noon prayers, abandoning their offices as the country immersed itself in the next big demonstration -- and then the one after.
As long as the protests were sustained, as long as each new crescendo matched or exceeded the last, the economy continued to die while business and political elites became ever more desperate for a solution to the crisis.
The Rats Leave the Sinking Ship of State
After each upsurge in protest, Mubarak and his cronies offered new concessions aimed at quieting the crowds. These, in turn, were taken as signs of weakness by the protestors, only convincing them of their strength, amplifying the movement, and driving it into the heart of the Egyptian working class and the various professional guilds. By the start of the third week of demonstrations, protests began to hit critical institutions directly.
On February 9th, reports of a widening wave of strikes in major industries around the country began pouring in, as lawyers, medical workers, and other professionals also took to the streets with their grievances. In a single day, tens of thousands of employees in textile factories, newspapers and other media companies, government agencies (including the post office), sanitation workers and bus drivers, and -- most significant of all -- workers at the Suez Canal began demanding economic concessions as well as the departure of Mubarak.
Since the Suez Canal is second only to tourism as a source of income for the country, a sit-in there, involving up to 6,000 workers, was particularly ominous. Though the protestors made no effort to close the canal, the threat to its operation was self-evident.
A shutdown of the canal would have been not just an Egyptian but a world calamity: a significant proportion of the globe’s oil flows through that canal, especially critical for energy-starved Europe. A substantial shipping slowdown, no less a shutdown, threatened a possible renewal of the worldwide recession of 2008-2009, even as it would choke off the Egyptian government’s major source of steady income.
As if this weren’t enough, the demonstrators turned their attention to various government institutions, attempting to render them “nonfunctional.” The day after the president’s third refusal to step down, protestors claimed that many regional capitals, including Suez, Mahalla, Mansoura, Ismailia, Port Said, and even Alexandria (the country’s major Mediterranean port), were “free of the regime” -- purged of Mubarak officials, state-controlled communications, and the hated police and security forces. In Cairo, the national capital, demonstrators began to surround the parliament, the state TV building, and other centers critical to the national government. Alaa Abd El Fattah, an activist and well known political blogger in Cairo, told Democracy Now that the crowd “could continue to escalate, either by claiming more places or by actually moving inside these buildings, if the need comes.” With the economy choking to death, the demonstrators were now moving to put a hammerlock on the government apparatus itself.
At that point, a rats-leaving-a-sinking-ship-of-state phenomenon burst into public visibility as “several large companies took out adverts in local newspapers putting distance between themselves and the regime.” Guardian reporter Jack Shenker affirmed this public display by quoting informed sources describing widespread “nervousness among the business community” about the viability of the regime, and that “a lot of people you might think are in bed with Mubarak have privately lost patience.”
It was this tightening noose around the neck of the Mubarak regime that made the remarkable protests of these last weeks so different from those in Tiananmen Square. In China, the demonstrators had negligible economic and political leverage. In Egypt, the option of a brutal military attack, even if “successful” in driving them off the streets, seemed to all but guarantee the deepening of an already dire economic crisis, subjecting ever widening realms of the economy -- and so the wealth of the military -- to the risk of irreparable calamity.
Perhaps Mubarak would have been willing to sacrifice all this to stay in power. As it happened, a growing crew of movers and shakers, including the military leadership, major businessmen, foreign investors, and interested foreign governments saw a far more appealing alternative solution.
Weil Ziada, head of research for a major Egyptian financial firm, spoke for the business and political class when he told Guardian reporter Jack Shenker on February 11th:
"Anti-government sentiment is not calming down, it is gaining momentum…This latest wave is putting a lot more pressure on not just the government but the entire regime; protesters have made their demands clear and there's no rowing back now. Everything is going down one route. There are two or three scenarios, but all involve the same thing: Mubarak stepping down -- and the business community is adjusting its expectations accordingly."
The next day, President Hosni Mubarak resigned and left Cairo.
President Obama, remember this lesson: If you want to avoid future foreign policy Obaminations, be aware that nonviolent protest has the potential to strangle even the most brutal regime, if it can definitively threaten the viability of its core industries. In these circumstances, a mass movement equipped with fearsome weapons of mass disruption can topple a tyrant equipped with fearsome weapons of mass destruction.
A professor of sociology at Stony Brook State University, Michael Schwartz is the author of War Without End: The Iraq War in Context (Haymarket Press). Schwartz's work on protest movements, contentious politics, and the arc of U.S. imperialism has appeared in numerous academic and popular outlets over the past 40 years. He is a TomDispatch regular. His email address is [email protected]. To listen to Timothy MacBain's latest TomCast audio interview in which Schwartz discusses the Egyptian revolution and the power of nonviolent disruption, click here, or download it to your iPod here.