Fueling us

Around four months ago I was on a bus going from Dokki to the Mohandiseen end of Sudan Street. The bus was one of the privately-owned, medium-sized (i.e. not a microbus and not a big bus) vehicles which shuttle people around Cairo. That it was privately-owned is relevant here because of the fracas which developed when a woman got on insisted that she would only pay 25 piastres for her trip.

As far as I can tell, there is a degree of negotiation involved in the setting of fares on this buses which is absent from state-run bus services (the green buses of an identical size to the vehicle involved in this scenario charged a fixed fare of 1.25 LE for a ticket two weeks ago. This has no doubt changed after the fuel price increases. In contrast, privately-run buses and microbuses stagger fares according to the length of the passenger’s journey.) Flustered, and laden with bags, the woman got on and sent a 25 piastre note to the taabi3, the fare-collector, who in this case also happened to be the driver’s 12 or 13 year-old son.

The taabi3 – who was possibly the only endearing, non-surly, pubescent teenager in the world – politely told the woman that the fare was 50 piastres, prompting the woman to set him straight, in no uncertain terms. Baba, he said to his father, the woman says it’s only 25 piastres to Boula2. At this point the driver got involved via the medium of the inclined mirror above the windscreen which runs the width of the bus and which allows drivers to simultaneously drive, admonish passengers, talk to their taabi3 and ogle girls’ bottoms .

A noisy, tense discussion ensued between the driver and the woman, conducted through the mirror. The driver’s son, who clearly idolised his father, followed attentively, his eyes darting back and forth between the woman and his father as he chewed his fingernails. The woman – who found support in other passengers – would not be moved, and the driver eventually conceded defeat. I remembered the times as a child I had witnessed my own father involved in tests of will and thought how terrible it must have been for the kid to watch his father suffer such a public humiliation.

Interestingly, a woman got on a few minutes later with two kids in tow, one of whom had a birth defect in his hand and was unable to form words, communicating in sounds intelligible only to his mother. The family seemed to be friends with the driver, who resolutely refused to accept the woman’s attempts to pay their fares. The boy stood at the front of the bus behind the driver, smiling and fascinated by the view out of the windscreen, periodically calling out a sound to which his mother responded from the back of the bus aywa ya 7abiby, ana hena [yes darling, I’m here]. He made sounds at the other passengers, too, and at the driver, who smiled and laughed with him before helping him into the seat next to him where he pointed at things excitedly.

This is a long-winded illustration of what 25 piastres means, and why recent increases in the price of solaar (the fuel used to fill up buses) which have translated into a 25 piastre increase in the price of fares are such bad news. A seminar I went to yesterday said that the increase will add up to an extra 15 LE per month (0.25 x 2 x 7 x 4) on the transport costs of regular microbus users. Probably a conservative estimate, given that many commuters use more than two microbuses a day.

While my ability to comment on the sagacity of the price increases is to some extent compromised by an incomplete understanding of economics, I think even a moron could tell you that:

1. To increase the price of a transport fuel will cause the price of everything to increase. This is disastrous in the context of already high inflation.

2. To raise public sector wages by 30% one day and then two days later wipe out the notional benefits of this wage increase with a package of price-increase measures is at best contradictory, at worst insulting. The government claims that it has had to raise revenue in this way to cover the 30% wage increase. This is either duplicitous or stupid or both. An economist in the seminar yesterday suggested that it was intended to send the message, ‘look what happens if we raise wages.’

3. The notional 7 percent growth of the economy brought about by neo-liberal economic policies has not translated into better standards of living for all. The World Bank estimates that 23% of Egyptians live below the poverty line.

4. The government individuals who made this decision don’t know the meaning of 25 piastres. Other than when they hand a 25 piastre note to the child cleaning their windscreen at a traffic light, possibly.

I spoke to an investment economist the other day and he was telling me about how Egypt’s economic policy is primarily focused on attracting foreign direct investment into the country. Now proponents of FDI champion it because, they say, it’s a cheap way of bringing industrial expertise and infrastructure into the country and raising revenue i.e. the foreign company builds a factory using local material and then employs, trains and passes on skills to the local workforce. Furthermore, they argue, unlike other forms of investment it’s less easy for the foreign investors to pack up and bugger off at the first signs of economic or other forms of instability in the host country.

Here comes the however.

However, sharing skills with the developing world is never the motivation of a multinational which sets up shop abroad, as is self-evident. It is seeking low production costs, cheap labour and weak or non-existent labour regulations which allow it to suck its workers dry without having to worry about troublesome health insurance payments or toilet breaks or severance remuneration or workers’ need to rest or earn enough to send their children to hospital. Unsurprisingly, it is usually countries with repressive political regimes which attract multinational investors.

Industrial zones in Egypt such as the QIZ areas are highly non-unionised: I’ve heard that there is not a single workers’ union in the 6th October industrial zone – can anyone confirm this? A compliant workforce is all part of the game plan of course, and it is unlikely that strong labour regulations will be put in force to protect the ever growing numbers who will join the private sector as Egypt continues to sell off its public sector.

It will be interesting to see how the Egyptian labour movement responds to this new threat and how it changes the dynamics of employer – syndicate negotiations. (Syndicates are all members of the state-controlled Federation of Egyptian Trade Unions).

I asked the economist why the allegedly growing economy had not translated into a better standard of living for Egyptians whose economic suffering is increasing. He was phlegmatic, and pointed to the depreciation of the pound, the international wheat crisis and the wave of inflation and said that Egyptians wouldn’t feel the benefit of Egypt’s new economic policies immediately.

It’s become trendy in recent years to talk about ‘responsible, ethical capitalism’, Adherents of this theory suggest that capitalism is capable of being a force for good, capable of changing people’s lives. The problem is that even before we get to the economic, mathematic calculation reasons why this is mostly stuff and nonsense, we have to acknowledge that human beings and their troublesome profit-reducing needs don’t even enter into the capitalism equation. The evidence of this is currently being felt in microbuses across Egypt.

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