This paper seeks to identify the network, its participants, its roles and the struggles in which it will be active given the current political and economic stagnation we live in. First, we will quickly browse the history of debt creation in Egypt and the current status of debt in Egypt. Through that browsing, we can understand both the political economy of debt in Egypt and the social impacts of this process.

Who are we?

The Egyptian network for the abolition of debt and right to equitable development (ENADED) is a coordinating framework that gathers leftist activists, Human rights institutions, civil society organizations that are interested in struggling against the domination of capitalism, imperialism, and their economic policies both on the regional scale and the global one. The imperialist era that we live in is characterized by particular unequitable developmental policies. The public debt policies are at the center of the imperialist era policies on a global scale. Our network seeks to organize the struggle against these policies, especially the policies of indebtedness.

The network works with regional and global partners and comrades to develop more effective strategies of resistance. We seek to promote alternative policies for equitable development. The process of coordination with regional and global activists and organizations will help us develop our framework. The network works within the CATDM strategies of struggle against capitalist globalization and imperialist processes of debt creation.

Current status quo

In September 2017, the Central Bank of Egypt (CBE) announced that the country’s external debt rose to $ 79 billion, a 41% increase over the previous year’s level. Egypt’s external debt during the fiscal year 2015-2016 was about $ 55.8 billion.

Short-term debt represented about 39% of foreign exchange reserves, while international standards considered that this level was still safe. Egypt’s external debt increased with the country resorting to the expansion of leveraged lending from international financial institutions and issuing international bonds to cover a gap in its balance of payments. The sovereign debt market has seen a surge in foreign investment since last November as the floating of the local currency was introduced, with interest rates rising by 700 basis points since then.

The Central Bank of Egypt’s evaluation of foreign debt level in the last fiscal year was higher than the International Monetary Fund’s (IMF), which signed a loan agreement with the country in November 2016. In a report released this month, the IMF estimated foreign debt in fiscal year 2017 to be around $ 76 billion, and expected it to fall the following year to $ 74 billion.

These indicators about the increasing reliance on debt to finance the Egyptian budget deficit are even more alarming in view of the increase in public indebtedness in Egypt internally, where internal public debt reached nearly 200% of GDP.

The local currency lost more than half of its value after the Egyptian central bank adopted a flexible exchange rate policy in November 2016. This crazy rise of the dollar against the Egyptian pound contributed to increasing inflation rates on a yearly basis to levels not seen since the mid-1980s. This has a dramatic impact on domestic consumption, which has declined especially in the lower classes, composed mostly of the poor working class and the marginalized farmers in the current Egyptian context.
The Egyptian economy in general entered stagnation from the mid-1980s because of debt creation policies, and the internal and external debt indicators reached horrendous levels despite the assurances of the Egyptian government and the Central Bank that the debt is still in the safe stage.

Egypt is also witnessing serious developments domestically in terms of deepening private indebtedness. The issuance of Law 141 of 2014 allowed the establishment of financial companies providing microcredit to citizens in Egypt, which is a dangerous development aiming to integrate the poor citizens in Egypt within the framework of globalized financial capitalism. Our network needs to confront these policies together with confronting public debt policies and working for fair and equitable alternatives in favor of the popular masses.

The debt issue and economic dependency

The debt issue was historically at the center of any social movement in Egypt, from the Orabi revolution in 1882 to the 1956 war. In 1956, the Port Said War was fought as the World Bank and the colonial powers refused the right for Egypt to nationalize the Suez Canal as a response to the World Bank’s policies which were depriving the country of funds to build the high dam on the Nile. The debt issue provided opportunities for popular movements in Egypt, leading to demands such as “national liberation” and “independent development”. As a result, the post-independence authoritarian state adopted a relatively socialistic discourse despite the fact that these authoritarian regimes also deepened the modernist distortion here in Egypt. But while the Egyptian post-independence economy relied on domestic manufacturing and import substitution strategies, it did not explicitly call for disengagement from the capitalist center.

Who is authorized to take responsibility for the disengagement from the capitalist center? The only way forward is the development of a new social movement. This movement will oppose both the traditional bourgeois classes and the globalized capitalist order in which they are integrated. The new globalized world we want to build will instead be associated with popular classes (poor peasants, marginalized workers, and city poor) victims of impoverishment. Hence, disengagement is the policy of the excluded. The preconditions for disengagement include the development of a political will for change. This principle also requires progress in the areas of democracy and collective rights, the unity of the Third World, and self-reliance by each nation. A multi-polar world is also a means of achieving disengagement. It also involves a strong form of non-alignment, allowing for various types of tactical negotiations.

Demands of the Egyptian network:

1. The first objective of the Egyptian Network is to struggle against Debt and for Fair Development, to immediately and unconditionally abolish Egypt’s foreign debt and to work to bring down the micro-debts from the poor citizens, abandon policies of stabilization and structural adjustment, counter microcredit policies aimed at citizens and advocate equitable economic and development policies in favor of the masses.
2. The network works first to establish audits of public debt, through the involvement of Egyptian citizens and their trade unions, parties, popular and student unions. The goal of this networking is to abolish all forms of illegitimate debt.
3. To struggle against the policies of micro-loans directed to citizens; to call on all institutions and NGOs working in the field of development to confront them and advocate alternative development policies that build the capacities of marginalized and vulnerable groups in the society; to struggle to replace the general economic policies favoring businessmen with economic policies that are in favor of the poor and the marginalized.
4. The network struggles for the abolition of all agreements with the International Monetary Fund and the World Bank.
5. The network will denounce all agreements (economic, political, military, etc.) which impinge on the sovereignty of the people and perpetuate the mechanisms of dependence.
6. The network will work together with the social and political forces to make the notion of illegitimate debt recognized in international law.
7. Rejection of all forms of conditions imposed by the creditors.
8. To struggle for recovering the assets and funds stolen by corrupt dictators with the collusion of local and international banking institutions and governments in the current and previous periods.
9. To take action to sue these financial institutions.
10. To struggle to eradicate hunger, poverty and inequality.
11. To struggle to ensure equality between women and men in all spheres of life.
12. To work towards the establishment of new financial policies through the strict control of the movement of capital and goods, the enactment of taxes on capital (comprehensive fees, taxes on wealth), the lifting of banking secrecy, the prohibition of tax heavens and of speculation in the financial markets.
13. To work towards establishing a mobilization of national resources that does not create indebtedness.
14. To work with all local, regional and international popular forces to establish alternatives freeing humanity from all forms of oppression: social oppression, patriarchal oppression, neo-colonial oppression, racial persecution, class oppression, political persecution, and cultural, sexual and religious oppressions.
15. To work towards an ambitious environmental policy aimed at restoring climate stability.
16. To struggle for the guarantee of economic, political and food sovereignty.
17. To struggle in order to replace the capitalist system focusing on the search for maximum profit, growth and individuality, by a new society in which social and environmental needs are at the heart of political choices.
18. To work with all social forces to confirm the superiority of human rights over commercial law and to force governments, international financial institutions and corporations to respect various international instruments such as the Universal Declaration of Human Rights (1948), the Convention on the Political Rights of Women (1952), the International Covenant on Economic, Social and Cultural Rights (1966), the International Covenant on Civil and Political Rights (1966), the Convention on the Elimination of All Forms of Discrimination against Women (1981), the Declaration on the Right to Development (1986), the Convention on the Rights of Migrant Workers and Members of their Families(1998), the Declaration of the Rights of Indigenous Peoples (2007).