Egyptian Workers Protest Against Privatization

AL-MASRY AL-YOUM
Egyptian workers protest privatization
Wed, 03/03/2010

Ekram Ibrahim

Protesting workers from the Tanta Flax and Oils Company ended a 15-day sit-in this week after reaching a compromise with Manpower Ministry representative Wael Allam. They were offered a sum equivalent to two months’ salary and an early retirement package of LE40,000, which they accepted.

This strike is the latest in a series of workers’ actions seen since mid-2004. The current wave of protests emanates from the largest social movement Egypt has witnessed in more than half a century. Over 1.7 million workers engaged in more than 1,900 strikes and other forms of protest from 2004 to 2008.

On 8 February, approximately 400 workers began a sit-in in front of the Egyptian cabinet to protest the government, which they say is ignoring their demands for their fundamental rights as workers.

The strikers requested the reinstatement of several workers that were fired; an increase in their meal allowances in line with those received by workers in public-sector textile factories; and payment of back wages and bonuses.

Company employees had two options: either they could accept things that would enable them to resume their work-- such as increased meal allowances, reinstatement of fired workers and bonuses--or they could accept early retirement packages. "This way, the government has chosen the getaway option by giving them the early retirement package," said Mostafa Bassiouni, one of the foremost experts on the contemporary Egyptian labor movement.

The Tanta Flax and Oil Company is one of the largest Egyptian companies to have been privatized. According to Bassiouni, the company conveys the “worst” picture of privatization. The government sold it to a Saudi businessman for LE83 million, even though its original value was over LE3 billion, says Bassiouni

This raises serious questions about the process by which the company was sold off and whether its value was even evaluated before the sale.

According to a recent report by the Solidarity Center, a non-profit US-based organization that assists workers around the world who are struggling to build democratic and independent trade unions, workers have been actively striking against rising prices; inadequate wages; delays in payment of bonuses, profit shares and other wage supplements; and the negative results of privatization of public-sector firms.

The report, entitled “Justice for All: The Struggle for Worker Rights in Egypt,” found that fears of job loss and an unwillingness on the part of private investors to pay fringe benefits--such as share dividends and retirement funds--motivated a wave of labor actions that began in the early 2000 and accelerated after pro-business Prime Minister Ahmed Nazif was appointed in July 2004. The labor unrest continues today.

Two strikes in particular have stood out as the largest and most politically important since these labor actions began. In December 2006, workers in the Nile Delta town of Mahalla conducted a three-day strike involving more than 20,000 workers, inspiring a series of copycat strikes after their demands for unpaid bonuses--promised by Nazif to public sector workers--were eventually met.

In a book coauthored by Bassiouni and labor writer Omar Said, argue that the Mahalla strike is a watershed in the modern Egyptian labor movement. This was not due to the size of the strike, its impact on the media, or even the fact that it triggered the biggest wave of strikes since the 1940s. Rather, it lies in the fact that the workers’ movement after December 2006 bore the imprint of the Mahalla strike in several key ways. The September 2007 strike was marked by its high level of organization and low level of spontaneity, which had been largely absent in workers' organizations.

The Mahalla workers won substantial economic gains, but, as of April 2008, their negotiated gains had not yet been fully realized, according to the Solidarity Center report.

On the other side, Kamal Abbass, director of the Center for Workers and Trade Union Services (CTUWS), thinks the core of the problem can be attributed to the absence of bona fide trade union organization in Egypt.

The need for an Egyptian union is what the Mahalla workers have been trying to establish since January 2007, without much success--but they managed to inspire other blue- and white-collar workers in different sectors to launch similar actions. Only employees of the Real Estate Tax Authority have been successful so far in founding Egypt's only independent union in December 2008.

But in Mahalla, the local trade union committee remains pro-government, representing the government’s interests and not those of the workers, Bassiouni told Al-Masry Al-Youm. The fact that Hussien Megawer is the head of the Egyptian Trade Union Federation (ETUF) and negotiates with striking workers in the name of the government proves how the union is not a real trade union committee devoted to safeguarding workers’ rights. Moreover, Bassiouni points out that Megawer is a member of the board of Torah Cement Company. So how can the employer represent the employees?

This is considered a violation of Egyptian law No. 35 of 1976. Yet labor activists are working hard to change this legislation, which they consider an impediment to organizing “true” trade unions.

Khaled Ali, head of the Egyptian Center for Economic and Social Rights, sees this law imposing a single, institutionalized trade union system, while the workers lack the right to establish or join organizations outside the "official" trade union structure. Forming more than one trade union for each industry or groups of similar or related industries, meanwhile, is prohibited. The union organization takes a pyramid form, whereby power is concentrated at the top while workers at the base of the pyramid are stripped of any authority.

The report sees these recent workers’ actions as the most powerful movement for democracy in Egypt in more than half a century--a movement that deserves far more support and recognition from the international community than it has garnered so far. Such support and recognition would demonstrate a commitment to the democratic transformation of Egypt by its own people, and significantly contribute to this process of transformation.

The dilemma largely stems from the new shape of the labor market in Egypt. The neoliberal era--and how the government and the ETUF respond to it--will represent a major factor in determining the future of workers' rights in Egypt.

The solidarity report sees the record so far as not very encouraging. Egypt’s privatization program and other neoliberal measures have won accolades from international financial institutions. The IMF, World Bank, and World Economic Forum all rank Egypt high among the “global economic reformers”--i.e., countries that make it easy for private-sector enterprises to do business in them.

According to statistics provided by the Solidarity Center report, the Nazif government’s economic policies resulted in high levels of economic growth--about 7 percent a year from 2005 to 2008--but workers have paid a high price for the achievement.

The neoliberal project is creating a new Egypt, which many believe is benefiting only the top 10 percent or so of the population. It leaves behind most industrial workers, clerical employees and virtually all workers within the informal economy.

The series of recent strikes have been prompted by more than just demands for wage rises, in an economy where it is not unusual for even professionals to hold two jobs in order to feed their families.

But some strikes have taken on a political edge, as workers protest privatization under President Hosni Mubarak's sweeping economic reform program.