“America’s Egypt”: A Flawed Critique

Tim Mitchell’s article “America’s Egypt” (MER 169) offers a sweeping critique of USAID, World Bank and other development agencies’ perspectives on and programs for Egyptian agriculture. Although he makes a number of interesting and useful points, his analysis of recent Egyptian agricultural changes is seriously deficient, and cannot withstand serious scrutiny. Mitchell is a political scientist, but his political arguments are equally suspect. His own (and much other) evidence belies his claim that development agencies are unconscious of their political role in Egypt, and throughout the article he adopts what amounts to an instrumentalist view of state action.

Finally, as “deconstructionists” would insist, “what is not said” is just as important as what is. It is not obvious what alternative model of development he would adopt. Egypt must create a minimum of 6 million jobs during the coming decade (compared to a current labor force of about 15 million). If this is not done, either unemployment will rise, real wages will fall, or both; any combination means that the condition of the poor will deteriorate. The only hope (however slender) of creating this huge number of jobs is the path of private-sector led, labor-intensive manufactured and agricultural exports.

Egypt must indeed follow something similar to the path of Taiwan, Korea, and Singapore -- precisely what the (quite conscious) “reform-mongers” of the IMF/World Bank/USAID have been trying to promote. Mitchell misconstrues the implications of the East Asian model for Egypt, and offers us few clues as to how he would create the necessary jobs. His implicit call to give every rural household two thirds of an acre seriously underestimates the amount of land needed to keep a rural Egyptian family out of poverty, and overlooks the history of land reforms which expropriated middle-class peasants rather than large, often absentee and sometimes foreign landlords as in Korea and Taiwan. Expropriating “kulaks” is a recipe for profoundly disrupting agricultural production, and often, for famine. Such a redistribution would in any case offer no solution to problems such as urban food supply, more efficient water use and the provision of food to the next generation of farmers.

The core of Mitchell’s article is a description and analysis of changes in Egypt’s agriculture during the past two decades. He rightly criticizes simple-minded Malthusian views and then proceeds to argue that Egypt’s dependence on food imports is the result of local farmers’ shifting from human to animal food production. He attributes the “livestock boom” to a “growing disparity in income” which “has enabled the better off to divert the country’s resources from the production of staples to the production of luxury items.” Livestock production, he asserts, is “particularly concentrated on large farms, those over ten feddans.” Meanwhile, he argues that USAID, motivated by the need to unload US farm surpluses, “supported the massive shift to meat consumption among the better off by financing...Egyptian grain purchases from the United States.”

This argument is simply wrong. Let us begin with the least inaccurate portion, the description of events. There is considerable debate on the rate of growth of Egyptian farm production, but it is probably true that Egyptian agriculture is producing more food per capita now than in 1980. (The World Bank estimates that food production per capita in 1988 was 11 percent higher than in 1980.) During the 1970s, however, the growth of agricultural production was likely less than that of population, while the rate of growth of livestock products far outstripped that of crops, at least since the mid-1970s.

Mitchell conflates income growth with income redistribution. If consumers prefer wheat to maize, and enjoy meat and dairy products, then increased incomes will generate strong demand for wheat and animal products. Mitchell misunderstands the income elasticity of demand, which tells us how consumption of a particular good rises with income. The concept of income elasticity is important if we want to understand why the demand for meat and dairy products grow rapidly: The rate of growth of demand for a product is the sum of the rate of population growth plus the rate of growth of income per capita, times the income elasticity of demand. This is not the same as saying, &tdquo;there is an extremely high variation in the value of food consumed by the rich and that consumed by the poor,” a statement which refers exclusively to the numerator of the income elasticity of demand (defined as the percentage change in consumption divided by the percentage change in income).

How fast did demand for, say, meat grow in Egypt? From 1974 to 1981, Egyptian population growth was roughly 2.7 percent per year, and per capita income expanded at 6.3 percent per year. The income elasticity for meat and dairy products is about 1.0. It follows that the demand for livestock products grew at roughly 9 percent per year from 1974-1981 (2.7 percent + 6.3 percent), and at roughly 6 percent from 1982-1987. (The rate of per capita income growth decelerated in 1982-1987, to roughly 3.3 percent growth. From 1987 to the present, the growth rate of GDP has been less than that of population.) Since the price of meat was uncontrolled, and since government policy further increased its profitability by placing quantitative controls on imports, farmers responded to this rapid growth of demand. A similar story can be told for dairy products, entirely independent of any statement on income distribution.

The poor could have been excluded from the benefits of the 1970s boom only if there had been a truly massive redistribution of income away from them. The data on income distribution in Egypt, as in most Third World countries, is admittedly of poor quality. The best evidence is for expenditure, not income, and comes from two Household Budget Surveys conducted by the government in 1974-1975 and 1981-1982. (The results of the 1989 survey have yet to be published.) According to Karima Korayem, an economist at Cairo University closely associated with the left opposition, absolute poverty in rural Egypt fell between those years and the distribution of expenditure became more equal! Real farm wages rose some 350 percent from 1973 to 1985. Other, indirect indicators, such as infant mortality, confirm the general picture of poverty reduction down to 1985.

It is correct that the poor (who remain numerous) could not and cannot afford to eat meat. But the poor nevertheless improved their diets precisely by the shift from maize to wheat which Mitchell disparages. Everywhere in the world, when people are given a choice between maize (or sorghum or cassava) and wheat bread, they choose the latter -- if they can afford it. A diet of nothing but maize bread, imposed by poverty, causes the niacin deficiency disease known as pellagra; the protein structure of wheat makes it a far healthier and more desirable basic staple. In Egypt they could afford it because their incomes rose and because subsidized wheat flour became widely available in the rural areas.

Mitchell is correct that American aid helped to make this possible. Consumer subsidies create an unsustainable and unacceptable burden on Egypt’s economy: Egypt spends about as much on subsidies as on investment. However, whatever their cost, the food subsidies have undeniably protected the living standards of the poor, comprising some 14-16 percent of their total expenditure.

Mitchell’s analysis of changes in production is as erroneous as his explanation for changes in demand. He implies that there has been a shift of land toward fodder production. Yet the birsim (clover) area has fallen since 1973, and the maize area has been roughly stable. Birsim has highly desirable agronomic properties (i.e., nitrogen fixation and tilth formation) and would very probably be retained in the crop rotation even if all Egyptians converted to vegetarianism. Of course, more cuts of birsim are now taken, while farmers divert land and variable inputs away from cotton. But all this is hardly news and has a straightforward explanation: the misguided pricing policies set up by the Nasser regime and perpetrated by the Sadat government. However, with the assistance of constant prodding by the World Bank/USAID, the Mubarak government began relaxing price controls in the mid-1980s. Wheat prices were decontrolled in 1988 and the production response has been strong.

Mitchell asserts that livestock production is concentrated on large (i.e., greater than ten-feddan) farms, based on Simon Commander’s 1984 survey of three Delta villages. This result is strongly contradicted by two more broadly based sources: 1) Fitch and Soliman’s analysis of a subsample of ten villages from the Ford Foundation Farm management survey of 1977, and 2) the National Agricultural Census of 1982, which covered the entire country. Both sources show that small farms are far more livestock intensive than large farms. Indeed, the “livestock boom” has been one of the forces shoring up small farm viability in Egypt, benefiting the poor as producers and as consumers.

In short, Mitchell misconstrues the demand-side forces driving the expansion of the livestock market. He is poorly informed as to the actual structure of livestock production in Egypt. He also presents a very partial analysis of other agricultural issues (e.g., the causes of mechanization, the alleged inverse relation between farm size and output per unit land). In general, his discussion of recent Egyptian agricultural change should not be taken seriously.

Mitchell asserts that development agencies are “unconscious” of their role, yet he cites USAID reports which he claims show that “acquiring at every level of the Egyptian bureaucracy this sort of ‘policy leverage’...has now become the principal criterion according to which USAID development projects in Egypt are evaluated.” How can USAID simultaneously both be oblivious to its role in Egyptian politics and also evaluate its projects on Egyptian domestic political criteria?

USAID, the World Bank and the IMF are perfectly aware of their role as political institutions. They have a set of views on what they are doing, whether it is promoting international financial stability (IMF), alleviating world poverty (World Bank) or protecting the national interests of the United States (USAID). Many World Bank officials, for example, see their role not as supporting local elites, but rather as cutting through the web of public incompetence and private cupidity which impedes growth and poverty reduction. One may disagree with these institutions’ perspectives or be skeptical as to their success: Mitchell is certainly correct to assert that many USAID programs “far from encouraging a ‘private sector’...make the state an even more powerful source of funds and site of patronage.” But I have never met a World Bank or USAID official of any stature who was not consciously political. Typically, though, they have a far greater sense of the limitations of their institution’s leverage than do their critics, who, by blaming outsiders for economic problems, implicitly exculpate the stupidities and venalities of local governments.

Mitchell seems to argue that USAID policies fundamentally aim to protect the interests of specific sets of US capitalists, and that American agricultural aid to Egypt is determined by the need to find markets for US grain surpluses. He views the pre-Gulf crisis difficulties of Egypt’s military debt in the same way, and he applies a similarly instrumentalist analysis to Egyptian government policy.

There is a vast literature criticizing such a perspective on economic policies. US farm aid is far more realistically seen as the outcome of the interplay of the US farm lobby, US strategic interests, the state of US macroeconomic and trade balances, and other factors. The case of Egyptian military debt is equally complicated; if US “private interests” (presumably arms manufacturers) were behind the military loans to Egypt, one wonders why Congress, the principle point of entry for special interest groups in the American political system, was upset. It is rather inconvenient for any instrumentalist vision of US aid to Egypt that the entire military debt was canceled in the aftermath of the Gulf war.

Mitchell finds it “curious” that “agencies like the IMF and USAID promote the growth of exports as the solution to the country’s economic problems” or the notion that “solutions from East Asia provide a model for other Third World states.” He disparages the East Asian model’s applicability, because Egypt could match the per capita exports of Korea only if Egypt’s non-oil exports increased forty-fold. But it is not necessary for Egypt suddenly to achieve the per capita income or exports of Korea for a more outward, market orientation to contribute to poverty reduction (not merely to servicing the debt, which is the least of Egypt’s economic problems). True, such a strategy will be difficult if OECD protectionism is not contained, but it is false that Egypt cannot do it if other countries do likewise. The international division of labor and comparative advantage are alive and well. Increasing competition heightens efficiency, and typically also growth, creating larger incomes, and even more demand.

Mitchell asserts that an export orientation will yield no benefits to the poor “in the absence of the kind of far-reaching land reform carried out in South Korea.” Of course, the benefits of rapid growth would be most widely shared if such a land reform had been carried out earlier; the absence of such a reform is one of the many tragedies of modem Egyptian economic history. But if the price system is not biased against exports, and if capital is not cheapened by government policies, the evidence is overwhelming that the demand for labor will rise sharply as labor-intensive farm and factory products are produced for export. Such an increase in the demand for labor is essential in the coming decade in Egypt: Every year, just under 500,000 new jobs need to be created simply to prevent poverty from worsening.

Mitchell’s only concrete policy proposal is a call for land redistribution. Mitchell asserts that “the minimum farm size required for a family to feed itself...by 1988 (was) only 0.625 feddan”: He posits a minimum grain consumption level (250 kg per person), assumes a 30 percent tax, and then makes the calculation. But rural people do not merely eat, and if all grain were consumed on the farm, urban food supplies would be reduced. Let us instead ask, “How large a farm is necessary, on average, to keep a farm family above the poverty line?” Using Korayem’s 1984 rural poverty lines (1,354 Egyptian pounds to 1,645), adjusted conservatively (by 10 percent) for inflation, yields a poverty line of 1,982 pounds to 2,408 in 1988. Using 1988 data from USAID’s Agricultural Data Base, the typical three-year Delta crop rotation would generate an average revenue of 626.38 pounds per feddan per year. If the livestock production that Mitchell so dislikes is omitted, it follows that a farm of 3.16 to 3.84 feddans (some five to six times more than Mitchell’s estimate) is needed to avoid poverty.

In 1977, livestock production on a small (i.e., less than three-feddan) farm would produce an average of 212.5 pounds per feddan. Again assuming a 10 percent inflation rate, the adjusted 1988 return for small farmer livestock production would be 604.69 pounds -- nearly as much as from crop production! With a combined farm revenue of 1,231.07 pounds per feddan, a farm of 1.6 to just under 2 (1.96) feddans was needed to avoid poverty -- still some two and a half to three times greater than Mitchell’s estimate. There are perhaps 4 million farming families and roughly 6 million feddan of farm land -- not enough to lift them all out of poverty by giving them 1.6 to 2 feddans each. Malthusianism may be wrong-headed, but land scarcity is a reality in Egypt.

Even if there were enough land to go around, such a procedure would do little for the next generation of farmers. Ultimately, poverty can fall in Egypt (as in Korea) only if manufacturing employment absorbs rural population growth and if educational and health levels rise. This is precisely what the current reform package, the “structural adjustment” which the development agencies “have tried to impose” on Egypt is intended to achieve.

In the end, it is not really clear whether Mitchell has any alternative. Greater organization and political participation by the rural poor would certainly be a welcome development. But what programs, what policies, what strategies would provide the jobs, the food, the foreign exchange, the infrastructure, the education and the health care which the nearly 70 million Egyptians of the year 2000 will require? What replaces the “artifact” of the nation-state, integrating into the “misleadingly named ‘world market’”? Until Mitchell and like-minded thinkers have answers to these questions, their analyses of agricultural development and rural poverty will deserve to be ignored.

Alan Richards
Santa Cruz, CA

Tim Mitchell Responds:

“America’s Egypt” criticized the tendency to begin the analysis of Egypt’s economic problems with the visual image of too many people crowded into too little geographical space, arguing that this trope transforms political questions of power and inequality into technical issues of natural resources and their management, and helps obscure the involvement of the American development industry in creating the problems it seeks to solve. To oppose this imagery, I showed that Egypt’s food crisis could be attributed not to population increase and land shortage but to switching the use of crops from feeding people to feeding animals.

Many of Alan Richards’ objections to my argument are beside the point, for they address arguments I never made. Nowhere did my article advocate a diet of maize alone, or suggest that the area of maize or birsim cultivation increased. Other points he makes are without evidence. Declining infant mortality, for example, reflects the spread of immunization and rehydration therapies and does not “confirm” any reduction in poverty. Levels of malnutrition, a more reliable measure of poverty, have stayed the same or worsened since 1978.

Richards prefers to explain the switch to meat production by observing that demand for meat increased at about the same rate as population and income. A correlation between meat production and growth in population and income does not explain the switch; it simply describes it in different terms, terms that eliminate the politics. Acquiring extra income, why did Egyptians spend it on transforming food supplies into animal fodder? “Demand factors” record the fact that they did so. The actual occurrence of such demands in a market is not the starting point for an explanation, but the result of political arrangements that structure the market and determine which social groups have the resources to make demands.

These arrangements include a redistribution of wealth toward the rich (Richards himself has published figures showing the jump in income share of the top 5 percent of urban households after 1974, from under 22 percent to almost 29 percent), government pricing policies that reflected the interests of the agrarian elite by subsidizing meat and other high-income food production while penalizing the production of staples, and USAID’s dumping of US grains as part of its global marketing of meat-centered diets. The demand factors that Richards sees as “driving” the food crisis were themselves the product of these political forces, including USAID. Thus US AID is part of the problem it portrays itself as solving.

Richards objects that World Bank and USAID officials are “consciously political” in their efforts to address Egypt’s problems -- again missing the point. His comment about the “stupidities and venalities” of Egyptians and the need for Americans to cut through their “incompetence” and “cupidity” reproduces the development discourse substitute for analyses of the structure of political power in Egypt and its dependence on US aid and other interests.

We both agree that US aid is shaped by the intersecting concerns of the farm lobby, arms manufacturers, strategic interests, trade policy and other political forces. It is surprising to have to defend the suggestion that these forces represent the interests of US capital, still more surprising to read the naive accusation of “instrumentalism.”

State policy is a complex outcome of these interests, but my account of US policy leaves Richards unnecessarily confused. Congress was “upset” at the Reagan administration’s illegal diversion of USAID funds to finance Egypt’s military debt because it felt deceived and embarrassed -- and it preferred that Egyptians rather than Americans subsidize US arms makers. Yet it did no more than slap USAID’s wrist, especially after USAID officials pointed out that in the case of Israel, Congress itself allow all economic aid to be unlawfully diverted to pay military debts. Nor is it “inconvenient” to my argument that Egypt's military debt was subsequently forgiven: Egypt was unable to make payments, and wiping out the debt offered the only legal means of enabling Egypt to incur new debts. The only inconvenience is to US taxpayers, forced to write off yet another subsidy to the arms makers, and to Egyptians, forced to live under the military rule of those generously donated weapons.

Richards’ final criticism is that I do not offer alternative strategies that the American development industry can “take seriously.” Once that industry is seen as part of the problem, however, there can be no such strategies. Perhaps the tone of Richards’ attack indicates some dim awareness of this desperate fact. Development economics has no more answers. Its practitioners spent the 1980s dealing with the crisis of Third World debt, and as the crisis appears to recede they see no road ahead.

Richards offers the landless and propertyless majority of Egyptians the prospect of Korean-style work discipline, with the assurance that conditions for their super-exploitation (that innocently named “international division of labor”) are “alive and well.” Yet he knows that the local, regional and international circumstances that made Korean development possible do not exist, and that the remedy is no more than a "slender hope." He also maintains the silence of development experts regarding the military core of US aid to Egypt. No doubt he is aware of the coercion that Korean-style solutions will require.

This is the context in which Richards’ reaction to my comments on land reform should be understood. His particular objections are again misplaced (I discussed limiting landholdings to three acres, not 3/4 acre). His larger objection, that land reform would be too “disruptive” and is therefore unthinkable, makes my point. The implication is that his solutions would not be disruptive, whereas in fact market-based remedies threaten the livelihoods, social benefits and affordable food supplies of the poor. At issue is not disruption but who is to be disrupted. Speaking the depoliticized discourse of development, he thinks only within the existing political order and assumes solutions must the form of managerial and technical remedies imposed on the Third World poor by Western expertise.

Too Simplistic a View

Although Joel Beinin’s review of my book, Sexuality and War: Literary Masks of the Middle East (MER 171), provides some sensitive understanding of major points, overall it falls short of giving an accurate picture of it, doing what he accuses me of doing: “being too circumscribed,” simplistic, showing only one aspect of what I was saying, therefore giving the wrong picture of my views on certain extremely touchy subjects. For example, I do not portray the Palestinians as “the main villains in the affair.” This is certainly not my view nor what I intended to say. Rather, I say that all armed groups in Lebanon brought about the devastation we are witnessing and that to portray one group (as some of the writers -- male and female -- did) as innocent or mainly victims is inaccurate and short-sighted. I am careful to show that there is not one armed militia that is innocent or better than the other. They are all ruthless and willing to collaborate with any group or outside force able to provide them help at the time they need it. This is what I am denouncing.

Also, my reading of Elias Khoury’s Little Mountain is much more subtle and complex than Beinin makes it out to be. Through more than 30 pages of analysis, I go into what I call “a complex novel with several interlaced layers of meanings.... It gives dialectical visions.” I do a thorough analysis of this novel in terms of both form and content, which Beinin has certainly overlooked. But I also believe that Khoury, one of today’s Arab intellectual idols, needs to be demythified and criticized for his shortcomings and some of the dangerous, destructive aspects of his views.

And this leads me to talk about my commitment in trying to find solutions for my country and for that part of the country I love and feel deeply for. When Beinin takes out of context the sentence in my book that says that my vision for Lebanon “may sound simplistic, overly optimistic and naive,” without adding the most important line that “utopia is the exploration of the possible,” I find it unfair and depressing. I hope you will rectify these misunderstandings.

Evelyne Accad
Urbana, Illinois