Home > Arab World, oil, poverty > Proletarianisation under neoliberalism in the Arab world*

Proletarianisation under neoliberalism in the Arab world*

from Ali Kadri

Between 1980 and 2010 the share of the rural to total population in the Arab world dropped significantly from about 60 percent to around 40 percent. In absolute terms, an estimated seventy million people left the countryside to urban centres at home.[1] This conservative estimate is nearly equivalent to the total number of rural-urban migrants since the beginning of the twentieth century until 1980. While this exodus was occurring, the regional rate of unemployment was rising and the share of labour in the form of wages fell to around a quarter of national income.[2] By 2007, the Arab League declared that more than half the Arab population was living at less than the two-dollar per day benchmark.[3] Basic food production was decreasing and food imports were rising in this high per capita food dependent and scarcest-water area globally. Around half the population in the Arab world was spending more than half of its income on purchasing food.[4] When speculation reached the commodity market and basic food prices rose, scuffles before bakeries in Egypt resulted in several fatalities.[5] The agricultural sector was shrinking relative to the economy. The productive economy, in turn, was de-industrialising and retreating relative to oil and geopolitical rents.[6] The deconstruction sustained by the agricultural sector, in particular, led to massive dislocation throughout the neoliberal age.

The explanation of this phenomenon afforded by the class of neoclassical economy models known as dual-economy models are unfitting tools for understanding why and how this process could undergo unchecked for three decades. Dual-economy models purport to provide an explanation of migration from the less developed rural sector in relation to modern sector wages; however, in an Arab context, the rationale for migration on the basis of individual choice between two competing sectors is irrelevant. Moreover, the very idea that an individual residing in rural areas is afforded with the luxury of choice is insidiously ideological. Whatever choice was available to the individual was subsidiary to the choice that was made by the comprador/rentier class in respect to social and macro policy. The comprador/rentier class in charge of development in the Arab world, which personified a cross border alliance of local and foreign capital, had a choice between a neoliberal pattern universalising and facilitating the usurpation of national wealth, and a strategy based on the recirculation of wealth and the redeployment of real resources for development within the national economies. It chose the former. By doing so, it set in motion a whole dynamic accelerating the disengagement of direct producers from the land. Peasants and farmers were forcibly dislocated; the choice left to any individual was that of the necessity of bare survival. The alternatives, with which the individual is afforded as a result of this macro policy context, are further narrowed by successive violent encroachments on the rights of working people to two wretched conditions: the abjection of the countryside or misery of urban squalor.

Price and choice theoretic frameworks avert the study of migratory phenomenon not only by reconstructing a false reality from the summation of individual decisions, which is the common trap of the fallacy of composition, but because any reference to the development of the migratory phenomenon in real time may implicate the social class whose ends the neoclassical discipline serves. Neoclassical economics actually studies something else other than the migratory phenomenon; its subject matter is an arithmetic computation which bears no relevance to the fact that evictions and prices are socially construed. Had the neoclassical framework pursued the development of migratory phenomena in real time, it would have had to question two sacrosanct concepts: firstly, the terms of trade and power structure underlying the price system and; secondly, the social contradictions inherent in social systems. It would have had to tackle the kernel of the issue of proletarianisation, which is the creation of socialised and cheapened wage labour. The neoclassical framework analyses reality away and in order not to incriminate the class in power to which it is subservient. The neoclassical object of study becomes individual choice in a world of free competition, voluntary unemployment and scarcity. Notwithstanding that goods are scarce only to those who cannot afford them, chimerical assumptions such these are elevated to the standing of science, when in actuality they either have no referents in real events or they do not exist. 

What has really happened is that the Arab rentier/comprador classes deliberately eroded national agriculture and instilled food dependency in the rural sectors by opening up trade unconditionally, designing macro policy that accentuates unevenness and reducing investment in agriculture (see Table 1). Dependency on food imports was rising throughout the Arab world.[7] Instead of shifting resources from uncompetitive farming into areas of comparative advantage, as per the neoliberal mantra, these biased policies added to unemployment of the urban areas. The national agricultural base is no match for the protected, highly productive, and subsidized agriculture of the North. Depriving people of the independence that comes from self-sufficiency in food production is both necessary to lower wages and wear down any potential social base for the organisation of labour. In that sense, proletarianisation became inseparable from of the process of socialisation under capitalism or the destruction of forms of petty-private property.

 

Table 1: The Agriculture Sector’s Contribution to Employment and as a share of GDP (%)

Selected countries and years

 

Algeria

 

Egypt

Jordan

Morocco

Syria

Tunisia

West Bank

 & Gaza

 Employment  1977: 311995: 12   1976: 472000: 30  1979: 111993: 6  1971: 581999: 44  1970: 501991: 28  1975: 392001: 22  1980: 232000: 14
 Value Added   1977: 82000: 9  1976: 282000: 17  1979: 72000: 2  1971: 202000: 14  1970: 202000: 24*  1975: 182000: 12  1987: 192000: 8

Source: The World Bank 2004, MENA Development Report, Unlocking the Employment Potential in the Middle East and North Africa: Toward a New Social Contract.

* The decline of the Syrian agricultural sector began as of 2000 with the onset of the second generation of neoliberal reforms introduced by amending law number 10 on investment and the possibility of repatriation of profits by foreign capital.

 

Table2. Distribution of Rural and Urban Poverty
  Percentage of the poor in Percentage of the poor Percentage of rural poor
Country/territory urban areas in rural areas on total
Yemen 21  40 84
Egypt  10  27 78
Iraq 16  39 ..
Jordan 12  19 29
Palestine  21  55 67
The Sudan 27  85 81
Syrian Arab Republic 8  15 62
 Sources: The World Bank (2008); for Iraq, COSIT and the World Bank (2010); and, for the Sudan, IFAD and FAO (2007).

 

In the past three decades, most Arab countries joined the WTO. This period represents greater openness in agricultural markets and, hence, greater susceptibility to price fluctuations and import surges. An FAO commentary on the  impact of this liberal economic climate on the developing agricultural  markets maintains that ‘[as] countries reduce tariffs and bind them at low levels, they become increasingly vulnerable to external agricultural market instability and to import surges that could destroy viable, well established or nascent production activity.’[8] Intraregional Arab trade is at around ten percent of trade with the rest of the world despite a Generalised Arab Free Trade Agreement (GAFTA). A more interlocked and interdependent Arab food market provides an element to national and inter-Arab security that shifts the power platform making the base of international negotiations tilt towards Arab countries. Neither the Arab comprador-class nor their international partners would support empowering working people in the Arab world with the freedom that comes from food independence. The comprador class and its cross border allies ensure that all integration efforts remain ineffective.   

In the poorer countries of the Arab world (Egypt, Yemen, Sudan, etc.) with around forty percent of the population already suffering problems of malnutrition, the slightest decline in the level of domestic supply runs the risk of being translated into a reduction of consumption per capita. Over the past twenty years, average basic food consumption per capita declined. Notably as well for the same period, the production of basic foods per capita exhibited a downward trend, and the slack in the level of domestic supply was covered by higher imports (see Table 3).[9]

 

Table 3. Developments in Arab Agricultural Trade, In Millions of US dollars.

Year        Exports Imports                     

2001-5     28894      32756

2007        15129      52535

2008        18367      65278

Source: Arab organisation for Agricultural development, Statistical Abstract, no. 29.

 

For the majority of migrants, the choices were between two levels of historically-determined below decent subsistence living-standards. The historically relevant choices were not made by each individual at any one point in time. These important decisions were taken by the subject of history or the social class in power that decided to introduce violent and non-violent measures and policies aimed at eroding the very basis of the reproduction of rural life.  For countries developing under the onus of conflict such as Iraq, the process of expulsion from the countryside was materialised by outright military aggression, hunger, and forcible dislocation.[10] Similarly in Palestine, conditions in the Gaza strip are sometimes so severe that as many as sixty percent of children can be classed as malnourished.[11] Where outright occupation was not the case, trade openness treaties, dislocation-laws dispossessing farmers and macro policies allocating resources away from agriculture uprooted the peasantry en masse. Since 1980, the share of investment in agriculture from total investment fell continuously to reach a low 5 percent by 2009.[12] In Syria, neoliberal policies reduced real incomes and the rolling back of egalitarian land reforms resulted in lower output and a higher farmer eviction rate.[13] In addition to draconian laws dispossessing farmers, in Egypt, the most populated Arab country, the decline in agriculture was drastic. Within a decade, the share of agricultural investment from total investment fell from around 10 percent to about 4 percent (see Table 4).[14] The rates of malnutrition in Children in Egypt and Yemen reached 30 and 45 percent successively.[15] These were the results of a concerted and premeditated policy aimed at reconstituting social value for grabbing purposes by absolute and violent means.

 

Table 4. Share of agricultural investment from total investment in Egypt (percentages).

2003                        9.4 

2004                        9.5 

2005                        7.6 

2006                        6.9 

2007                        5 

2008                        4 

Source: National planning institute, 2009.

 

In most of the developing world, the proletarianisation process gained momentum as of 1980 or the onset of the neoliberal age.[16] The more easily universalised value became through pricing by the dollar on one end, the more self-particularising and repressive became the labour process of value creation, on the other. Increasingly, the remnants of the declining rural economy became the social support mechanism for the peasant who is a potential wage earner but is unlikely to ever find a decent wage paying job. The failure of the rural sector to deliver sufficient social support raised the spectre of crisis, especially as freer food imports from the North degraded the basis for local sustenance and reduced the share of the consumption bundle which is produced by local means.[17] There are social forces locked into a social relationship and shaping the process of lowering the amount of food produced for immediate consumption by the farmers and, subsequently, their removal from the land. These are unequivocally the autocratic regimes and their Western allies who, as value is held in the universal form of the dollar, become one and the same.

In the Arab world, matters took a turn for the worse pursuant to successive Arab military defeats. The conditions for surrender were cast in a structural and implicit way to guarantee the exposure of working class security and, consequently, a diminution of state sovereignty. Depriving the labouring classes of security, including food security, represented a necessary component that would ensure long-term erosion of state autonomy over policy. The Arab working population through the medium of the state no longer owned its policies for development. There was more than just a commodity mode of integration with the Western world underpinning this relationship. The co-opting of the Arab bourgeoisie- its metamorphosis into a pure comprador class, by the western financial elite was by the time of the Arab spring nearly complete and the resultant disarticulation within an Arab formation became acute to the point of explosion. 


* Summary of essay presented to workshop on ‘Agriculture & Food Production in the Shadow of the Arab Oil Economy,’ Amman, Jordan, 28 Jan., 2012

[1] These are very conservative estimates based on fixed coefficients of population growth and rates of rural-urban migration. These estimates do not include migration outside the Arab world. A middle range estimate would put this figure at around one hundred million. The rationale for my calculation has to do with the constancy of certain rural population characteristics. ‘In most Arab countries, there has been little change in rural fertility in the past and the prospects of its appreciable drop in the next 10 years are remote; despite a fall in infant mortality rates in rural areas, life expectancy is not projected to increase significantly in most rural populations of the region, and major declines in both fertility and mortality in Arab countries have been largely limited to urban areas; and  in the absence of reliable data, the best and perhaps the safest course for making rural population projections by age is to assume a constant rural population age structure for the period 1980-2015.’ The Demographic profile of Arab Countries Ageing Rural Population, United Nations, 2008.

[2] KILM, ILO, various years.

[3] Unified Arab Report, League of Arab States, 2007.

[6] Boudroua, Ahmed, Outlook for Industrialization of the Arab World, Journal of Asian and African Studies, Volume 21, Numbers 1-2, 1986 , pp. 32-43(12).

[7] FAO statistics, various years. http://www.fao.org/economic/ess/countrystat/en

[8] From the discussion paper ‘A special agricultural safeguard: Buttressing the market reforms of developing countries.’ FAO, Rome, 2001.

[9] FAO Stats, ibid.

[10] Louise Rouge, Times Staff Writer, June 16, 2005. Iraqis Endure Worse Conditions Than Under Saddam, UN Survey Finds, by Chris Shumway, The Standard, 2005-05-18; and, Daily living conditions in Iraq dismal, UN survey finds, UN news Centre.

[11] UNESCWA, 2008.

[12] Arab Labour Organisation, Workshop on agricultural rebirth, Damascus, 23-25 November, 2010, p.57.

[13] Ababsa, M., 2006. Contre-réforme agraire et conflits fonciers en Jazîra syrienne: 2000-2005. Revue des mondes musulmans et de la Méditerranée, No.115-116. La Syrie au quotidien. Cultures et pratiques du changement, Décembre 2006, pp. 211-230.

[14] Bush, RC (2007), ‘Poverty and neoliberalism: persistance and reproduction in the global South,’ Pluto Press.

[17] According to H. Kishk (National Centre for Social Research, Cairo), less and less of the dietary intake of the peasants in Egypt was produced on the farm. As a higher share of food was to be bought at world set prices, the peasantry, forced by this measure along with other draconian laws de facto dispossessing it from ownership of farming, undertook a gradual exodus from the land.

  1. April 24, 2012 at 1:23 pm

    Well done. We often overlook that practice for these policies was first done in the US, where land ownership has been corporatized and the people moved into town. My simple figures go to the minimum wage I earned working in lemon groves. There were few migrant laborers when I earned $1.65/hr moving heavy pipes in knee deep mud and wet clinging weeds. A candy bar and soda cost 15¢ then, less 2¢ for a bottle return, I could buy 13.75 candy bars and sodas per hour when I was fifteen years old. A soda and candy bar costs $2.25 now, multiply that times 13.75 to equal $30 per hour. Corporate agriculture is a criminal enterprise that uses semi-slave migrant labor to deprive US citizens of a living wage working the land; it poisons the air water and soil in the US while destroying traditional agriculture world-wide for the nefarious wealth centralization of oligarchic corporatism.

    • davetaylor1
      April 25, 2012 at 1:07 pm

      Well done you too, Garrett, but pre-“corporations” this probably started with feudal landlords farming sheep for profit in England, where Moore’s pre-Reformation “Utopia” is about so-called “Christian” England having become a land where “sheep eat men”. Post-Reformation, landed families enclosing church (i.e. community) and common land were followed by the Bank of England’s reserve banking (in conjunction with limited legal liability) financing grandiloquent estates, industrial share ownership and the development of corporate culture.

      Not that I want to let the US off the hook, but the UK is just as blameworthy, while empire-building by the agents of absentee principals is hardly unique to us.

  2. Podargus
    April 24, 2012 at 8:13 pm

    A quick scan of this article revealed zero mention of the biggest problem of all – population increase beyond sustainable levels.
    That invisible elephant is roaming around the Arab world as well it appears.

    • davetaylor1
      April 25, 2012 at 11:01 am

      But where’s your explanation and solution, Podargus?

      “Ill fares the land, to hastening ills a prey
      Where Wealth accumulates and Men decay”.

      But where in the countryside a peasant is able to store his surplus to see him through the winter,

      “The thriftless towns litter with lives undone,
      To whom our madness left no joy but one,
      And irony that glares like Judgement Day
      Sees Men accumulate and Wealth decay”. [G K Chesterton].

      Nor is the solution some combination of contraception, abortion, war and mass destruction. While we live in cities, our governments need to go to different schools in which they teach PID control theory and self-control. How can people control their own reproduction if they don’t know what is reasonable and the current local balance between births and deaths? I say this, Podargus, because I’ve suggested it before and you evidently haven’t taken the trouble to understand it.

  3. ali kadri
    April 26, 2012 at 1:00 pm

    The very shrinking of the productive base however, which was subjected to piecemeal neoliberalism since 1980, meant that the disengagement of people from production, which is inherent to capitalism, became a more pronounced systemic mark of the new Arab economy. Thus, when for every person finding a job in the eighties, there were two new entrants into the labour market reaching working age, by the late nineties, there were nearly four new entrants to every person finding a job.7 The rate of job creation fell much faster than the rate at which the labour force grew.

    Click to access Kadri59.pdf

  4. davetaylor1
    April 27, 2012 at 10:49 am

    “the disengagement of people from production, which is inherent to capitalism” …

    This is a very profound and – for me – new thought. Thank you, Ali.

    The irony is that Francis Bacon, in ‘The Advancement of Learning’ (1604) conceived modern science as a way of generating new forms of livelihood for the thousands dispossessed by land grabs in post-Reformation England. So is it capitalism per se, do you think, or its post-1694 banking system?

  5. Alice
    April 27, 2012 at 11:01 am

    The solution to the problems we face is the assumption that globalisation was the only answer to rising wealth. In fact those with the power and knowledge to look after domestic economies should do exactly that, because those very same people with influence – not one of them can manage the global economy and nor can the market given itrs prone to intervention when large financial institutions are leaning heavily on global policy, and if that means protection from exogenous influences…then that is what should happen.

    We globailised without any skills to manage globalisation and the market is not the Oracle and Delphi some clearly thought it was. Fail.

  6. davetaylor1
    April 27, 2012 at 3:40 pm

    But it’s not just incompetence, Alice, is it? Ali says “the Arab rentier/comprador classes deliberately eroded national agriculture … Depriving people of the independence that comes from self-sufficiency in food production is both necessary to lower wages and wear down any potential social base for the organisation of labour”. These guys neither know nor care what is needed, but know how to get what they want – not least by the Machiavellian art of concealing the truth by telling the people what they wish to hear.

    Thank goodness that’s beginning to backfire on them. I’ve been trying to cool down a guy whose liberal MP has been evading his questions about responsibility for the creation of money, and a conservative Parliamentary Secretary to the Treasury who simply denied the truth: “… banks maintain a fraction of deposits in cash reserves and lend out the remainder, although they remain obliged to redeem all deposits on demand”. [Note the ambiguities suggesting all deposits are cash rather than debt secured by means of the debtor’s bonds and mortgages]. “Commercial banks are responsible for extending credit to individuals and businesses and have no authority to print money, digital or otherwise”. [If they have no authority, why are they doing it]? So, who won’t this guy now vote for?

    http://www.greenbooks.co.uk/Book/414/Future-Money.html is James Robertson’s new book on banking reform, and let’s remind ourselves of the well-documented history of banking at http://video.google.com/videoplay?docid=-515319560256183936#.

    My own “solution” would be to tell the truth, not what we see in today’s Hall of Mirrors, wherein sterile homosexual relationships appear as “marriage” and “chrematistics” [money making] appears as “economics”. [See Herman Daly’s foreword in Wendell Berry’s ‘What Matters?’]. Money represents our indebtedness, and the more debt banks, executives and speculators acquire, the more they owe society and the more we need to call them to account.

  7. Alice
    April 28, 2012 at 1:30 am

    Agree Dave – every government, not just a few, not just those with surplus budgets, not just those with trade surpluses – every single government that exists anywhere owes a greater debt to its own citizens than it owes to financial firms foreign or otherwise, who may have bet on those nations, and then bet multiple times on the bets.

    That means creating the economic circumstances and conditions necessary, – public or private in method – it matters not at all, to employ as many as it can of their own citizens productively. To create the conditions for the earning of a living wage at the minimum.

    Unfortunately this “real debt” is rarely discussed.

  8. davetaylor1
    April 28, 2012 at 8:30 am

    Thanks, Alice, and I appreciate you are saying the same thing in different words as you said at #7. If I might just clarify one point of interpretation: I didn’t mention governments because, as I see it, they perform their money-collecting and using activities in the role of executives. We agree they are “failing” in their role of policy-makers.

    I hope others are reading if not joining in this. My interest is in WHY this real debt is “rarely discussed”.

    During my work c.1970 exploring what’s involved in the programming of computers, we realised that a computer can only do what it is already programmed to do. (That’s not so obvious now one buys pc’s already programmed). So my theory is along those lines. People who have not been taught otherwise see the sun going across the sky and not the earth turning on its axis. People who see others earning their living assume that bankers and speculators do too. Most people see debtors obliged to repay those who lent them credit and not a reality more like hitch-hiking, where the “lift” is given at no cost and the debt repaid to society (not our benefactors) when we can earn our living by doing likewise: very much a win-win arrangement.

    Even when one is assured this is a possible (and better) interpretation of what we see, it takes time to see it. In the familiar Gestalt experiment, we may have to keep looking for a long time at what looks like a vase before we see it as a picture of two people facing each other. Even to decode arguments takes time. So does trying them out to see if they are true, or seeing their implications.

    So please, dear reader(s), think about this carefully, because if it is right, it’s pointless moaning. We need to persuade our governors and teachers that there IS this alternative to what they’re now doing.

  9. Alice
    May 1, 2012 at 1:17 pm

    I dont like the look of this post above at 11 – Im not sure anyone should click on the link. It may be innocent. It may not be.

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