Economic Liberalization Policies and (Non-Islamic) Market Coalition in Egypt

Abstract

Why did economic liberalization program in Egypt simply reinforce the pre-liberalization structure, leaving Islamic business groups at the margins of political and economic power? This article analyzes the implementation of Egyptian economic liberalization, with special reference to the years between 1991and 2001, and examines its impact on the formation of a non-Islamic market coalition in Egypt. The central assumption is that the way the Egyptian state implemented economic opening –– characterized by political corruption and lack of transparency –– worked against the integration of small and medium size Islamic business groups with the market in the peripheral quarters. In the absence of the integration between Islamic business groups and the market reforms, economic liberalization policies sharpened class struggles which had empowered ideological rigidity within political Islam in Egypt. The deterioration of economic conditions, coupled with the state’s decreasing role in providing social services, provided an important avenue for the Muslim Brotherhood (MB) to become a legitimate rival to the regime. Motivated primarily by the sheer instinct of keeping its hegemonic role as opposition, the MB leadership maintained an ambiguous position regarding market policies in the group’s official electoral and party programs. Even though some members of the MB (especially in the leadership cadre) had strong business interests during the process of economic liberalization, the MB articulated its public discourse according to its main constituencies who were not benefiting from market transformation.