How Wall Street banks impoverished Egypt’s small farmers

More than 85 percent of Egypt’s poor live in rural areas. Like all Egyptians, they are participating in the protests held throughout the country, and are expecting that a new Egyptian government will meet their urgent needs.

Farming communities were not always so poor. They suffer because the regime of former President Hosni Mubarak caved into the demands of Wall Street banks.

In 1991, Egypt signed an agreement with the International Monetary Fund and the World Bank to privatize the public sector. This process of selling off nationalized industries and inviting the biggest and most predatory foreign banks to make “structural adjustments” to the Egyptian economy was vastly accelerated in 2004.

Public factories were privatized and parts were sold to cronies of then-President Mubarak at discounted prices. Markets were opened to exploitation by foreign companies. Meanwhile, the cost of necessities like bread and cooking oil skyrocketed, while both the standard of living and working conditions in Egypt plunged.

This was especially devastating for the countryside, where farming communities relied on government subsidies to guarantee the economic viability of their fields. These crucial subsidies for small farmers were discontinued and agribusiness was subsidized instead.

Saad Taweed, an engineer and a founder of the Egyptian Socialist Party, explained, “Fertilizer and insecticide that farmers used came from cooperatives. Now they come through commercial companies with U.S. and international companies being the dominant ones. This has lead to a doubling of the price.