Neoliberal globalization asserted itself into the world after the Cold War ended in 1991, and took dominance over more conservative political and socioeconomic practices worldwide. Its ideologies were gradually assimilated to reform political and socioeconomic practices due to the inequities mounting and multifaceted challenges and tensions in global capitalism, and manifested disarray worldwide.
Neoliberalism (a resurgence of ideas associated with laissez-faire economic liberalism), easily adopted by countries due to its introduction of fresh “liberal” ideas, and to maximize entrepreneurialship as a means to correct mounting global issue, and improve and maintain economic stability and growth.
Neoliberalism also introduced Transnational Corporations (TNC), companies that operate in more than one country at a time. Many believe this is a maneuver to restore power and wealth back to the upper class and promote private capitalism, increase exploitation, and circumvent internal economic strengths. On the other spectrum globalization supporters feel free market capitalism is the driving force in economic globalization and increasing global wealth (Economic Globalization, 2013).
Entrepreneurs and transnational corporations are supposed to conduct business within the governmental infrastructure regarding private rights, individual liberties and free enterprise. However, frequently the infrastructure is manipulated and breeched. The growth of TNC’s in Africa in the recent decade has had profound consequences, with the growth rate of three times the number as in advanced industrial countries. There is considerable debate regarding TNC’s ethical practice and social injustices in Egypt, and human rights organizations feel that free trade rules or lack thereof are insufficient to promote economic justice. There have been many protests regarding their practice of cheap labor, lower standards on working conditions, environment regulations and worker rights.
Starting in the 1990’s Egypt under Muhammad Hosni El Sayed Murbarak, had a rapid economic growth introducing major neoliberalism and privatization (a process of transferring an enterprise or industry from the public sector to private sector), policies transitioning previously public owned companies into domestic and international business networks. This lead to a lot of inequities as Egyptian neoliberalism reform was very vulnerable, their organized labor was severely suppressed; the public education and the health care systems were devastated by a combination of neglect and privatization.
Much of the population suffered stagnant or falling wages relative to inflation. Unemployment was estimated at approximately 9.4 percent in 2011, and about 20% of the population is said to live below a poverty line defined as $2 per day per person (The World Bank, 2011). For the wealthy, the rules were very different. Egypt did not so much decrease its public sector, as neoliberal supporters would have it, instead it reallocated public resources for the benefit of the affluent. Privatization provided benefits for politically well-connected individuals who could purchase state-owned assets for much less than their market value, or monopolize rents from sources such as tourism and foreign aid. Huge proportions of the profits made by companies that supplied basic construction materials came from government contracts, and a proportion was related to aid from foreign governments.
Ultimately twenty-years later in 2011, a major Egyptian Revolution in Tahrir Square, Cairo, where protestors descended to overthrow the Mubarak dictatorship due to these neoliberalism and privatization policies and their inequitable effects. This protest went on for 18 days where approximately 800 lives were lost and it shut down their major tourism business, detouring visitors and losing approximately $310 million dollars a day in revenue, it also threatening the viability of their economic stability, (Schwartz, 2011).
See clip below entitled “Egypt’s Burning”
Where once a good idea may come from goodness, pure and just reasons or secular ones. One cannot know what effects or how it will be utilized within a structure or its ultimate intent or effect, and will it be for the good or the bad of a nation.
Economic Globalization. (2013). Introducing Globalization, 51-78.
Neoliberalism. (2015). In Wikipedia. https://en.wikipedia.org/wiki/Neoliberalism
Privatization. (2015). In Wikipedia. https://en.wikipedia.org/wiki/Privatization
Schwartz, M. (2011, October 16). The Egyptian Uprising: The Mass Strike in the Time of
Neoliberal Globalization. Retrieved from http://newlaborforum.cuny.edu/?s=the+egyptian+uprising
Statistics Overview. (2011). Retrieved 2011, from http://data.worldbank.org/country/egypt-arab- republic