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Egypt Under Empire, Part 3: From Nasser to Mubarak
By: Andrew Gavin Marshall
Originally published at The Hampton Institute
Part 2: The “Threat” Of Arab Nationalism
Between 1952 and 2011, Egypt was ruled by three military dictators: Nasser, Sadat, and Mubarak. Nasser placated labour unrest and imposed many social programs that benefited the population. Sadat subsequently began to break down the ‘social contract’ with Egyptian society, and when Mubarak came to power in 1981, the following three decades witnessed the imposition of a neoliberal order, complete with crony-capitalists, corrupted bureaucracies and a repressive police force. Three decades of increased poverty, polarized wealth and power, and increased labour unrest all laid the groundwork for the 2011 popular uprising.
As Nasser came to power in Egypt in 1952, he successfully crushed labour militancy in the country, and even executed two labour leaders as a symbol of the new regime’s lack of tolerance for radical labour actions. Nasser engaged in a power struggle for a brief period, before assuming complete power in 1954, at which point independent political organizations were banned and he “ushered in a populist-corporatist pact between labour and the state,” in which “the state controls the bulk of the economic, political, and social domains, leaving little space for society to develop itself and for interest groups to surface, compete, and act autonomously.”
Labour groups were organized “into a limited number of singular, compulsory, non-competitive, hierarchically ordered and functionally differentiated categories.” In 1957, the government created the General Federation of Egyptian Trade Unions (GFETU), monopolizing labour unions under the government, purging the radical leaders and co-opting the moderates. Since this period, “trade unions have functioned as an arm of the state rather than as democratic representatives of workers.” Thus, labour activism and actions largely subsided throughout the 1950s and 60s.
Despite violent repression of independent political organizations, communists and militant labour groups, Nasser became incredibly popular both within Egypt and across the wider Arab world. He established a one-party state and a large security apparatus “to crush any and all dissent.” However, his articulation and actions related to Arab nationalism and Arab socialism – the twin pillars of his ‘revolution’ – sought to free Egypt and the Arab world from imperial domination, and to undertake a social revolution domestically as “part of an informal social contract where the population accepted constraints on its political freedom in exchange for the promise of higher living standards and a stronger nation.”
A large network of social services was established, which “provided employment, education and healthcare, as well as subsidized transportation and food.” This program also entailed “spending large sums of money on the military, which was seen as the protector of the nation from external enemies.” These social programs helped to “create a modern middle class” in Egypt. The allegiance of the middle class to the authoritarianism of the regime was secured by the government guaranteeing state employment to all university graduates.
Nasser also implemented major agrarian reforms, which between 1952 and 1961, “redistributed about one seventh of the country’s cultivable land from large landowners… passed on to the landless and near landless fellahin rather than kept for direct use by the state.” This led to an “improvement of rural incomes and agricultural production,” and attempted to undermine the influence of the large landowning class of Egyptians.
With the defeat of Egypt in the 1967 Arab-Israeli War, Nasser’s government suffered a humiliating defeat, and Nasser’s death in 1970 led to the emergence of a new dictator, Anwar Sadat, also emerging from the military, who ruled the country from 1970 until 1981. Undertaking a policy of ‘de-nasserisation,’ Sadat sought to undo many of Nasser’s more progressive policies, earning him the favour of the West. Among such policies were to return the “confiscated” land to the large landowners within Egypt by employing an ‘open door’ market-oriented program called infitah. The intifah helped to create the conditions for a real estate and credit boom, ultimately adding to Egypt’s foreign debt as the country became increasingly dependent upon foreign financing and ‘investment.'
The infitah – or “opening” – wrote Hibbard and Layton, “offered an alternative vision of economic development to that of Arab socialism;” beginning a process of liberalization and an influx of Western capital, “to integrate Egypt into the Western capitalist system.” Sadat’s policies also oversaw the gradual elimination of Nasser’s social programs and “the abandonment of Nasser’s anti-imperialism.” The country quickly became more trade dependent, having to import staple foods, and foreign financing was limited to non-productive sectors of the economy. Egypt increasingly exported its labour to the Persian Gulf, which helped to reduce the problems of unemployment at home, and increased the country’s reliance upon remittances from its foreign workers sending their wages back home. In 1974, labour remittances, oil exports, tourism, foreign aid and the Suez Canal accounted for nearly a third of Egypt’s foreign income, a number that exploded to 75% in 1980. A new commercial elite developed with extensive ties to the state, while economic inequality between the rich and the rest of society accelerated.
Such policies did not occur without resistance, however, with opposition emanating from academics, state bureaucrats and workers, with strikes and “popular unrest” occurring throughout the mid-1970s, with a major transport worker strike in 1976 and large bread riots in 1977. Sadat responded to the labour unrest and food riots by sending in the military to crush the protests. Sadat oversaw the construction of an alliance between the large landowning class, the business class, and the conservative religious elite, and even sought to build ties with the Muslim Brotherhood. Further, Sadat rebuilt ties with the United States, and even established an alliance and peace treaty with Israel, negotiated by the Carter administration in the U.S. as the 1979 Camp David Peace Accords. With that, Sadat lost a great deal of popular support, and Egypt’s Islamists rejected him. Sadat was ultimately assassinated by an Islamist group in 1981.
In 1981, Hosni Mubarak then took control of Egypt, also emerging from within the military and continuing the trend of maintaining the military dictatorship established since 1952, and deepening the economic ‘reforms’ begun under Sadat. Under Mubarak, the military and economic elites became more closely integrated, and with the imposition on the Emergency Law following Sadat’s assassination, Mubarak wielded more authoritarian power, suspending the constitution and dismantling the rights of citizens, also allowing for “detention without charge, press censorship and other restrictions on civil liberties.” A new – parallel – legal system was constructed, relying upon military courts, purportedly for use against ‘terrorists’ but used to persecute any and all forms of political opponents.
Mubarak oversaw – during the 1980s and 1990s – a massively expanded entrenchment of neoliberal economic and social reforms in Egypt. Mubarak also pursued a major campaign against Islamists, who were making political gains with segments of the population by capitalizing on the poverty and popular anger toward the government, largely brought on as a result of the economic reforms. Mubarak’s Egypt thus became a major human rights violator, all the while receiving immense financial and military aid from Western governments, namely, the United States. The role of the security services – in particular the police forces under the control of the Interior Ministry – became more predominant throughout Mubarak’s rule, with torture and other abuses widespread.
The military plays a very large role in the economy as well, and under Mubarak, military officials were appointed as regional governors, village chiefs and put in charge of state-run companies. The military itself has undertaken large land expropriations, runs companies and factories, giving it a major role to play in manufacturing, agriculture, construction, gas and consumer industries. The military, however, keeps most of its economic activities secret, and does not pay taxes while often using “conscripted labourers” for its workforce.
Mubarak began to implement further ‘reforms’ to the agrarian sector along neoliberal lines during the 1980s. The Agriculture Minister Yusuf Wali began implementing agriculture sector liberalization policies in 1986, working “hand in hand with USAID and the World Bank.” The U.S. stressed “market-oriented” reforms and promoted export-led growth, as USAID invested $1.26 billion in the agricultural reforms. These reforms continued over the 1990s, and resulted in widespread dispossession of small farmers and a further alliance between economic and military-political elites.
The major neoliberal reforms in Egypt arrived under Mubarak with the signing of a 1991 Economic Restructuring and Adjustment Program with the IMF, demanding liberalization of trade and prices, privatization, and labour ‘flexibility,’ as well as the removal of several social safety net measures.
The ‘new economic elite’ that emerged in Egypt as a result of the IMF’s programs of the 1990s were closely tied to the ruling party, the National Democratic Party (NDP), and Mubarak’s son, Gamal, who headed the NDP. Prominent businessmen became more influential in policy-making circles and “the number of businessmen elected to Egypt’s parliament increased from 8 in 1995 to 150 by 2005.” Public spending on social services was dramatically cut, state-owned industries were privatized and employees fired, resulting in “staggering hardships for the majority.”
As labour was under sustained attack, they fought back, with twice as many labour protests in the 1990s than took place during the 1980s. With the 1991 IMF program, Egypt was firmly entrenched in a neoliberal ‘order,’ which would accelerate over the following two decades. Fifteen years following the IMF program’s beginning – by 2006 – Egyptian workers had been subjected to continuous hardships and exponentially increased their resistance to it.
The privatization program led to the unprecedented plundering of the Egyptian economy into the hands of relatively few economic elites. Out of 314 state-run companies, 209 were privatized by 2005, “leading to a massive displacement of public sector workers, and with it a further weakening of the struggling labour movement.” The number of workers employed by public sector companies was cut in half between 1994 and 2001. The IMF praised the privatization program in 2006 for having “surpassed expectations.” Wealth and power was concentrated “in the hands of a tiny layer of the country’s elite,” and a few large conglomerates dominated the major sectors of the economy. As Henry Veltmeyer wrote, “Mubarak – and the Egyptian state as a whole – represented an entire capitalist class.”
Neoliberal reforms were further implemented under Prime Minister Ahmed Nazif (2005-2011), which saw businessmen take a more direct role in managing the state, with six major government ministries being run by six major businessmen in the areas of trade and industry, housing, transportation, health, agriculture and social welfare. Taxes were dramatically cut for corporations and elites and dramatically increased for the rest of the population. Corruption and embezzlement of public funds was rampant as the privatization programs effectively subsidized “the private sector at the expense of the nation as a whole.”
The costs of food, fuel and transportation skyrocketed, while Prime Minister Nazif instructed protesting Egyptians to “grow up.” Thus, in 2006, Egypt witnessed a new wave of labour unrest. Independent forms of worker organization re-emerged and in 2006 alone, “there were 220 major strikes involving tens of thousands of workers in the largest strike wave that Egypt had seen in decades,” and which were increasingly linking up with peasant movements protesting against the large landowners.
In 2006, a three-day strike of workers at a weaving and spinning factory in El-Mahalla was “a major turning point in the history of the Egyptian workers’ movement,” marking a total work-stoppage and for a much longer duration than strike action prior and helped in the formation of new workers associations with more democratic accountability, directly challenging the state monopoly over unions.
The strike was “the largest and most politically significant industrial strike since a dispute in the same workplace in 1947,” having roughly 24,000 workers participating, with over 10,000 occupying the factory for three days and nights, and on the fourth day the government granted a concession by offering a 45-day bonus. This set off a wave of worker protests and strikes across the country over the following years. Between 2006 and 2009, an estimated 1.7 million workers participated in protest actions, including private and public industrial workers, postal workers, educational administrators, workers in transportation, tax collection, healthcare, and other sectors. The recent years of labour unrest has been referred to as “the largest social movement in over half a century” taking place within Egypt.
Between 2006 and 2008, Egypt recorded annual growth rates of 7%, and in 2009 – while much of the world was experiencing negative growth – Egypt recorded a 4.6% growth rate. However, between 2008 and 2009, poverty in Egypt increased from 20% to 23.4%, while roughly 40% of Egyptians live on less than $2 per day, one-third of the population is illiterate, and youth make up roughly 90% of the unemployed. Thus, while the neoliberal reforms of the previous three decades produced high growth rates, “it has [also] led to worsening living standards for the majority of the population and the increased concentration of wealth in the hands of a tiny minority.” Between 1998 and 2010, there were between 2 and 4 million workers who took part in between 3,400 and 4,000 strikes and other labour actions. There were 266 strikes and labour actions in 2006, 614 in 2007, and they reached roughly 1,900 in 2009.
As strikes escalated, the demands for higher wages and more democratic union representation evolved into demands for the end of the Mubarak regime (and the neoliberal reign of Prime Minister Nazif). One strike organizer in 2007 told a radio program, “We are challenging the regime.” At strikes, workers were chanting, “We will not be ruled by the World Bank! We will not be ruled by colonialism!” Images of signs at protests circulated, reading, “Down with the Government. We want a Free Government.” One strike leader who was arrested in 2007, said upon his release: “We want a change in the structure and hierarchy of the union system in this country… The way unions in this country are organized is completely wrong, from top to bottom. It is organized to make it look like our representatives have been elected, when really they are appointed by the government.”
The second Palestinian Intifada in 2000 helped spawn new social movements within Egypt. The Cairo Conference was held in 2002 in an attempt to organize disparate social groups around two main shared positions: anti-neoliberalism and anti-war. In 2004, this led to the formation of the Kefaya (“Enough”), the Egyptian Movement for Change. This was aided along by a major demographic change within the country, where by 2011, roughly 52% of Egypt’s population was under the age of 25, and it was this group which disproportionately lacked employment, with roughly 95% of post-secondary educated youth being unemployed or working in fields unrelated to their education with very low pay. It was this demographic which became increasingly mobilized around non-ideological movements such as Kefaya, organizing a series of anti-Mubarak protests between 2004 and 2005, demanding democracy and accountability. The younger members of this group then established the April 6 Movement, “an organization that emerged in support of the 2008 strike by textile workers in Mohalla al-Kubra.”
A number of other social groups and protests organizations emerged from 2004 onwards, including Students for Change, Youth for Change, University Professors for Change, Workers for Change, Artists for Change, and the People’s Campaign for Change, among many others. In 2005, as Kefaya organized a massive anti-Mubarak protest, an organization of Egyptian intellectuals was formed as the National Assembly for Democratic Transition. Lawyers, journalists and other professions increasingly took part in protests.
The April 6 Youth Movement began to support the Mahalla workers’ strike in 2008, with founder Ahmed Maher having started a Facebook page that quickly reached over 70,000 members. As support grew, the government crack down ensued, with roughly 500 activists arrested over the following two months, including Maher (who was also tortured).
Since the Mubarak government made it illegal to hold meetings of more than five people, with a heavy-handed approach to information control and news censorship, Facebook and other Internet-based social media platforms quickly became very popular among young Egyptians. Roughly one in nine people in Egypt have Internet access, and 9% of those who have access used Facebook, making it the most visited website in the country, following Google and Yahoo. The Facebook page for the April 6 movement, reported the New York Times in 2009, was the page “with the most dynamic debates” among young Egyptians, “most of whom had never been involved with politics before joining the group.” The Facebook page provided a venue for young Egyptians “to assemble virtually and communicate freely about their grievances.”
The United States has been a major sponsor of the Egyptian dictatorship, giving it extensive leverage with the regime. Between 1948 and 2011, the U.S. provided Egypt with a total of $71.6 billion in bilateral foreign aid (most of which consisted of an annual aid package of $1.3 billion in military aid from 1987 to present), and since the peace treaty with Israel was signed in 1979, Egypt has been the second-largest recipient of U.S. ‘aid’ in the world (after Israel).
Another large international sponsor of the Egyptian dictatorship was the International Monetary Fund (IMF), which also heaped praise upon the Tunisian dictatorship of Ben Ali prior to its overthrow. In a 2010 report on Egypt, the IMF noted that the country had been following the Fund’s advice on economic reforms, though continued to recommend “phasing out energy subsidies” and increasing privatizations. The IMF further noted that, “the relationship between Egypt and the World Bank Group has been transformed and markedly improved over the last few years as a result of the progress Egypt has made in implementing reforms.”
In 2010, labour unrest continued throughout the country, with one strike organizer telling the press in May of 2010, “The government represents the marriage between authority and money – and this marriage needs to be broken up… We call for the resignation of Ahmad Nazif’s government because it works only for businessmen and ignores social justice.”
Egypt was clearly on the edge of an uprising, all that was required was a ‘spark’ – which came in the form of the Tunisian uprising in December of 2010 and January of 2011. With the overthrow of the long-time dictator, Ben Ali, in Tunisia, Egyptians were motivated to mobilize against Mubarak.
Andrew Gavin Marshall is an independent researcher and writer based in Montreal, Canada. He is Project Manager of The People’s Book Project, head of the Geopolitics Division of the Hampton Institute, Research Director for Occupy.com’s Global Power Project and hosts a weekly podcast show at BoilingFrogsPost.
 Rabab El-Mahdi, “Labour protests in Egypt: causes and meanings,” Review of African Political Economy (Vol. 38, No. 129, September 2011), page 390.
 Scott Hibbard and Azza Salama Layton, “The origins and future of Egypt’s revolt,” Journal of Islamic Law and Culture (Vol. 12, No. 3, October 2010), pages 198-199.
 Ibid, page 199.
 Rabab El-Mahdi, op. cit., page 390.
 Ray Bush, “Coalitions for Dispossession and Networks of Resistance? Land, Politics and Agrarian Reform in Egypt,” British Journal of Middle Eastern Studies (Vol. 38, No. 3, December 2011), page 395.
 Scott Hibbard and Azza Salama Layton, “The origins and future of Egypt’s revolt,” Journal of Islamic Law and Culture (Vol. 12, No. 3, October 2010), page 200.
 Ibid, pages 200-201.
 Ibid, pages 201-202.
 Ibid, pages 202-203.
 Angela Joya, “The Egyptian revolution: crisis of neoliberalism and the potential for democratic politics,” Review of African Political Economy (Vol. 38, No. 129, September 2011), page 372.
 Ray Bush, op. cit., pages 396-397.
 Angela Joya, op. cit., page 370.
 Scott Hibbard and Azza Salama Layton, op. cit., page 202.
 Rabab El-Mahdi, op. cit., page 395.
 Henry Veltmeyer, “Unrest and Change: Dispatches from the Frontline of a Class War in Egypt,” Globalizations (Vol. 8, No. 5, October 2011), page 612.
 Angela Joya, op. cit., pages 370-371.
 Rabab El-Mahdi, op. cit., page 395.
 Henry Veltmeyer, op. cit., page 612.
 Rabab El-Mahdi, op. cit., pages 397-399.
 Ibid, pages 387-388.
 Henry Veltmeyer, op. cit., page 611.
 Joel Beinin, “Egyptian Workers and January 25th: A Social Movement in Historical Context,” Social Research (Vol. 79, No. 2, Summer 2012), page 326.
 Ibrahim Awad, “Breaking Out of Authoritarianism: 18 Months of Political Transition in Egypt,” Constellations (Vol. 20, No. 2, 2013), page 278.
 Joel Beinin, op. cit., page 331.
 Angela Joya, op. cit., pages 368-369.
 Scott Hibbard and Azza Salama Layton, “The origins and future of Egypt’s revolt,” Journal of Islamic Law and Culture (Vol. 12, No. 3, October 2010), pages 206-207.
 Angela Joya, op. cit., page 369.
 Ellen Knickmeyer, “Fledgling Rebellion on Facebook Is Struck Down by Force in Egypt,” The New York Times, 18 May 2008:
 Samantha M. Shapiro, “Revolution, Facebook-Style,” The New York Times, 22 January 2009:
 Jeremy M. Sharp, “Egypt: Background and U.S. Relations,” Congressional Research Service, 27 June 2013: page 9.
 Patrick Bond, “Neoliberal threats to North Africa,” Review of African Political Economy (Vol. 38, No. 129, September 2011), pages 483-484.
 Joel Beinin, “Egyptian Workers and January 25th: A Social Movement in Historical Context,” Social Research (Vol. 79, No. 2, Summer 2012), page 339.
Meet the Next Country That Might Explode into Protests Against Corporate Plunder and Slave Labor Working Conditions
Meet the Next Country That Might Explode into Protests Against Corporate Plunder and Slave Labor Working Conditions
Will the wave of global unrest crash on Indonesia next?
By: Andrew Gavin Marshall
Originally published on AlterNet
Indonesia – a Southeast Asian archipelago that is home to the largest Muslim population on Earth – is a key global hot spot for corporate plundering, worker exploitation, land grabs and environmental devastation. Simultaneously, the country is becoming a tinderbox for militant labour unrest, peasant rebellion and indigenous resistance. After 500 years of domination by imperial powers, the population of Indonesia is organizing and resisting the ‘new order’ of global corporate colonization. Much like Brazil and Turkey, Indonesia has been praised by the imperial powers as a “model democracy” and the IMF hails its progress as an “emerging economy.” The illusions of Turkish and Brazilian state-capitalist ‘democracy’ have been revealed by massive urban uprisings. The conditions are present for Indonesia to become home to its own national uprising, the only question may be: what will be the spark?
Indonesia: A “Model Democracy” and “Emerging Economy”
Indonesia has been roundly praised by the major imperial powers as a “model democracy” – assuming they have any legitimacy to judge what that may be, with former World Bank president and Pentagon official in the Bush administration, Paul Wolfowitz, having written that Indonesia was “an example for other aspiring democracies,” having shown a “remarkable” achievement in “building democratic institutions.” Then-Secretary of State Hillary Clinton praised the “great transformation” of Indonesia since the dictatorship of Suharto, stating: “If you want to know if Islam, democracy, modernity and women’s rights can coexist, go to Indonesia.”
President Obama even praised Indonesia’s “extraordinary democratic transformation” which demonstrated “that democracy and development reinforce one another.” British Prime Minister David Cameron proclaimed that Indonesia could “inspire” young Muslims around the world “to choose democracy as their future.” German Chancellor Angela Merkel said that Germans “view Indonesia as a model of peaceful and tolerant development,” and even suggested that the way in which Indonesia tackled its debt was “an example of what can be achieved and what Europe has to achieve.” Perhaps, Greece and Spain – in time – could become what Merkel views as “model democracies” along the lines of Indonesia.
Indonesia is the largest economy in Southeast Asia and one of the top 20 economies in the world – listed among the major “emerging economies” – with one of the cheapest labour forces in Asia, which the New York Times explained was “a main reason [corporations] are attracted to Indonesia.” In 2013, Indonesia was listed as the world’s 12th largest exporter of textile products, with the minimum wage averaging $80-160 per month (as determined by local governments), compared with $75 in Cambodia and $37 in Bangladesh.
In a country of 240 million people, roughly 120 million live on less than $2 per day, though the government maintains that only 12% of the population – 30 million – live in poverty (which it defines as less than 86 cents U.S. per day), while 40% of children under the age of five suffer from moderate to severe ‘stunting’ due to malnutrition.
Despite the mass poverty and increasing growth of slums, a small section of Indonesian society has witnessed a remarkable growth in wealth, with the explosion of shopping malls, luxury cars and goods, and high-rise buildings. For Indonesia, “wealth and poverty are both on the rise.” The combined wealth of the country’s 40 richest individuals equaled that of its 60 million poorest citizens. Standard Chartered Bank noted that, “despite the rhetoric about middle classes contributing to growth in Indonesia, 82 percent of the population is living on less than four dollars a day.” Further, most of the economic ‘growth’ was experienced only by the consumer elite within the country.
A Pew Research Poll released in 2013 noted that only 37% of Indonesians felt their economy was “doing well,” with the number one concern needing to be addressed was that of rising prices, ranked above economic disparity, unemployment and sovereign debt. Roughly 75% of Indonesians felt that the economic system “generally favors the wealthy,” with 60% saying inequality had increased in recent years.
A Human Rights Watch researcher noted that with the “routine” trampling of rights for religious and ethnic minorities in Indonesia, along with brutal repression of peaceful protests, the imprisoning of political prisoners, along with torture and denial of medical care for prisoners, “the country is by no means a bastion of tolerance.” A former Indonesian economic minister recently noted that “the outlook for Indonesia becoming a well-functioning democracy is fast deteriorating,” with a tiny elite controlling the country while most people “have few prospects for improving their lives.” A former Indonesian foreign minister suggested that the country was fast in need of “a second wave of democratic reforms,” as when economic conditions worsen, “we will have a reaction on the street” since there existed within the country, a “dissatisfaction at a deeper level with the current state of democracy.” Even the Wall Street Journal noted that with the country’s continuous economic growth, “underneath lies a restlessness for real change that would affect the common person.”
But let’s not let facts get in the way of further praise; the IMF certainly doesn’t.
The Rising “Restlessness” from “Underneath”
The IMF has written in glowing terms of the success of Indonesia’s “structural reforms” which have led to “healthy” balance sheets for corporations and financial institutions. Growth forecasts remained above 6%, though more work could be done, noted the IMF: ending fuel subsidies, investing in infrastructure (meeting the demands of corporations), and to continue with “reforms” to labour laws, allowing for reduced wages, less benefits and protections for workers, and thus, attracting “foreign investment.”
In April of 2013, the IMF warned that “emerging Asia” needed to be careful about asset bubbles – like those that helped plunge the U.S. economy into crisis – and recommended the countries of the region “liberalize rigid labour and product markets,” thus allowing for cheaper labour in what is already a region for some of the cheapest labour on Earth.
Being the 12th largest exporter of textile products in the world, Indonesia is home to a significant sweatshop economy, marred by pervasive exploitation of labour. One Taiwanese-owned sweatshop employs nearly 10,000 people, mostly women, who work for 50 cents per hour making shoes for Nike, where the employees were verbally and physically abused. Indonesia is home to Nike’s third largest manufacturing base, following China and Vietnam, exploiting roughly 140,000 workers.
Indonesia’s ‘labour law’ – which was passed several years earlier – provided for slightly increased wages and severance pay in the event that a company decides to ‘downsize’ its workforce. Corporations have gotten around this law by hiring labour as ‘contract workers’ and firing them without benefits (what Indonesians call “outsourcing”). While corporations have been able to find legal loopholes – or simply ignore the law altogether – they have been facing increased pressure from labour unrest in recent years, and not merely in the textiles sector.
As the economy boomed in recent years, the labour force wanted a greater share of the benefits. Strikes had been increasing with demands for higher wages by mine workers, supermarket clerks, pilots and others who have “disrupted business operations – and could potentially deter foreign dollars.” The country had 53 strikes in the first seven months of 2010 alone, and they were continuing through subsequent years.
A strike took place at a plant owned by the French retail giant Carrefour in 2011 in protests against the company’s avoidance of adhering to Indonesia’s labour laws and in demand of higher wages. The strike was organized by one of the country’s largest trade unions – Kasbi – which represents 130,000 workers and has as its slogan, “Young, brave, militant.” Increasingly, labour organizers and workers have been connecting through social media, gaining access to more information than ever before and facilitating new ways to organize.
During the strike wave of 2011, Indonesia’s investment chief complained about the labour unrest in his country in an interview with the New York Timeswhere he expressed his fears that it would “reduce profit margins and competitiveness,” adding: “My concern is this will trigger a domino effect … it may trigger pressure for a rise in wages that not all companies can afford.” In May of 2013, Basri would go on to be appointed as the country’s finance minister.
In early 2012, Nike paid a $1 million out-of-court settlement for not having paid 4,500 workers at a factory for over 600,000 hours of overtime over the course of two years. The chairman of Indonesia’s trade union Serikat Pekerja National noted, “This has the potential to send shockwaves through the Indonesian labour movement… We have only just begun.”
In October of 2012, roughly 2.8 million factory workers across the country went on a one-day strike supported by several unions in 24 cities. In the capital of Jakarta, more than 700 companies were shut down for the day, while the government deployed 11,000 police officers and 4,000 military personnel to “secure” the rallies throughout the city. The mass protests were in opposition to companies hiring labour as “contract workers” and in demand of higher wages. Rallies were held across Jakarta and the country, where trade union leaders gave what the Financial Times referred to as “fiery speeches,” while the managing director of the American Chamber of Commerce in Indonesia complained that corporations viewed the existing labour laws as “counter-productive.”
The mass protests continued into November, at which point the government announced it was considering a minimum wage increase of up to 50%, though corporations were warning they would move their factories elsewhere. Following continued agitation over the course of the month, which saw demonstrators entering factories, urging workers to join them and shutting down production, the new governor of Jakarta approved a 44% increase in the province’s minimum wage. Tens of thousands of workers continued to protest, while business leaders complained that, “the minimum wage should be lower.” As the protests threatened the President’s major infrastructure development plans, one large corporate group warned: “The frequent protests are obstructive… They are getting to be too much and must be stopped.”
As the Asian Development Bank (ADB) warned earlier in 2012, while many governments in Asia had been experiencing rapid economic growth, rising inequality had become a major problem that could lead to social unrest and create “pressure to take on populist policies that are economically not very wise.” It advised Asian countries “to do something about it.”
In December, President Susilo Bambang Yudhoyono (commonly known as SBY) declared an end to the “era of cheap labour,” noting that wages were set to increase in a few provinces, though added that the government could not tolerate “disturbances in the production process.” A government economic minister stated in a speech that, “We should also take sides with businesses. Companies unable to comply with the minimum wage increases should immediately file a report with the government to demand a wage freeze. We will definitely facilitate them.” The threat of unrest and resistance had prompted several Asian countries – including Indonesia, Thailand, Vietnam, Malaysia and China – to begin increasing their minimum wages by the end of the year.
As 2013 arrived and the wage increases were set to take effect, companies were finding their way around the new laws. Several Nike plants hired police and military officials to intimidate workers into signing away their rights to higher wages. Even before the New Year, roughly a thousand companies were seeking exemptions from the government in paying the higher wages. By mid-January, 941 companies had sought exemptions, by which time the government had granted 47. Thousands of workers took to the streets in protest, often met with police brutality or violence from “organized thugs.”
By early February, the government announced that of the total of 941 companies wanting exemptions, “we will grant about 80 percent of them.” Instead, 500 companies were given a “delay” in paying higher wages, with more expected. Labour groups were increasingly threatening action and agitation in response. Tens of thousands of workers continued to take to the streets in protest, demanding companies adhere to the law, that the government enforce it, and requesting a health insurance and pension system. Business groups were threatening to layoff up to a million workers and close 1,300 factories if they were forced to follow the law. One business group complained that companies were “facing tough times.”
On May 1 – the international labour day known as ‘May Day’ – tens of thousands of workers in Jakarta went on a one-day strike and march, bringing the city to a “standstill.” Roughly 50,000 people protested outside the Presidential Palace, not only demanding better wages and conditions, but also opposing the government’s new plan to raise fuel prices (by cutting subsidies). The Indonesia press reported that roughly 135,000 workers joined the May Day marches, as business groups complained such protests were a threat to “economic growth.”
Like any good state-capitalist ‘democracy,’ Indonesia went on to ignore the will of the people and bow to the will of the IMF. Following the advice of the IMF and World Bank, the government of Indonesia passed a law in mid-June to reduce fuel subsidies and increase the cost of fuel by 44% over the coming weeks. Thousands of protesters took to the streets over several days, met with tens of thousands of police and security personnel. Students and other groups joined demonstrations across the country, noting that increased costs of fuel raise the prices of other goods and services, such as food, clothing and public transportation. The cut to subsidies was designed to “ease investor concerns” about Indonesia’s finances. During the protests, the police used excessive force – as well as hiring “local thugs” – to attack protesters, and arrested 229 students in 62 cities, with roughly 118 students injured during protests, often by being fired upon with rubber bullets.
Can it really be said that Indonesia is a “model democracy” when so much of its economic “growth” is built on the backs of the mass exploitation of workers, and for the benefit of undemocratic global corporations? Indonesia is a model, perhaps, but not of democracy: it is a model for the global corporate plutocracy.
Though it has been fifteen years since the end of dictatorship, Indonesia’s transition to democracy has barely begun. The democratic aspirations of Indonesians are not seen in the luxury cars, shopping malls or high-rises that span the cityscapes – as the idolatries of economic ‘growth’ – but rather, it is seen in the workers who emerge from the factory sweatshops and take to the streets en masse, demanding the promises of democracy and economic growth be realized at long last.
Extractive Industries and Exploited Communities
Suharto’s ‘New Order’ witnessed the carving up of much of Indonesia’s wealth for American, British, French, German, Japanese and other corporations from the powerful countries of the world. The neoliberal era – from the 1980s onward – witnessed an exponential increase in corporate colonization, a process that accelerated with Indonesia’s transition from dictatorship to ‘democracy.’
In the early 1970s, the American oil company Mobil Oil discovered one of the world’s largest natural gas fields at Arun, located in Aceh province. For three decades, the Indonesian military waged a battle against the Free Aceh Movement (GAM), which sought autonomy from the country, leaving 10-30,000 people killed. When Mobil merged with Exxon in 1999, it retained control of the Arun project, and the military continued to attack local villages with the direct support of ExxonMobil. A lawsuit against Exxon alleges that the company “supervised, controlled and directed” military personnel who committed major human rights abuses between 1999 and 2001.
The region of West Papua was not part of Indonesia, but was a separate Dutch colony struggling for independence in the early 1960s. The U.S. and U.N. negotiated an agreement in 1962 where West Papua would be under the “interim control” of Indonesia for six years, at which point the country would vote for independence or to be part of Indonesia. When Suharto took full power in 1967, he negotiated an agreement with Freeport to grant a mining concession in the region. When the election in 1969 saw overwhelming support for independence, Suharto declared the area “a military operation zone” and sent in the military to crush the people’s local movement. Repression was rampant for decades, with up to 100,000 West Papuans having been murdered since 1969 in what some have referred to as a “slow-motion genocide.” Despite the region’s immense natural wealth, it remains as Indonesia’s poorest province. The Freeport mine itself has created “irreversible ecological devastation” to the region, with hundreds of thousands of tons of waste dumped into waterways and valleys daily.
The U.S.-based Freeport mine in West Papua – the largest copper and gold reserves in the world – experienced a three-month strike in 2011, where workers were demanding higher wages. Workers were paid as low as $1.50 per hour, while the mine made the company $5 billion in 2010 alone. Eventually, after a great deal of violence and injuries, including one death, the workers agreed to a 37% wage increase (far from their demands for a five-fold increase), but one union official noted, “This is not the end of our struggle.” Freeport had been paying millions of dollars directly to the police which guard its facilities, who had – on occasion – opened fire on the workers as they were protesting against the mine. In the ten years between 2001 and 2011, Freeport had given $79.1 million to Indonesian police and military forces.
As Amnesty International has noted, the police and security forces in Indonesia were often implicated in “torture, excessive use of force and unlawful killings.” Freeport’s chairman in 2005 explained: “There is no alternative to our reliance on the Indonesian military and police… The need for this security… as well as the decisions regarding our relationships with the Indonesian government and its security institutions, are ordinary business activities.”
Tin mining on the Indonesian island of Bangka has been popular among imperialists since the Dutch colonized the country in the early 19th century. Combined with the neighbouring island, Belitung, tin mining on these islands accounts for 90% of Indonesia’s tin, with the country being the second-largest exporter of tin in the world, used largely for consumer electronics. Indonesia supplies companies such as Samsung, Foxconn, Apple, Sony and LG with tin from these islands. The miners get paid low wages and workplace injuries (and deaths) have been on the rise in recent years. Further, the “lucrative but destructive trade… has scarred the island’s landscape, bulldozed its farms and forests, [and] killed off its fish stocks and coral reefs.” This destruction has often resulted in protests, some numbering over tens of thousands of locals.
In November of 2012, the U.S. Undersecretary of Commerce for International Trade Francisco Sanchez, stated that the United States hoped to “double its trade with Indonesia over the next five years,” as U.S. corporations were getting “excited about the opportunities” in the country for ‘growth.’ Sanchez traveled to Indonesia to encourage more trade between the countries, and he was accompanied by a delegation of corporate leaders from Cisco Systems, General Electric, and Honeywell International, among others.
Among the “opportunities” for growth – inspiring the ‘excitement’ of multinational corporate plunderers – is the profit that can be extracted from partaking in major land grabs and the destruction of the environment, with the added bonus of displacing thousands of peasant and indigenous communities in the process.
Land Grabs Lay Waste to Indonesia
Massive land grabs have been accelerating around the world since 2009, driving Indigenous peoples and farming communities off the land as foreign investors lay waste to the environment and create cash crops for export to rich countries. Oxfam noted in 2011 that the global land grabs were “already leading to conflict, hunger and human rights abuses,” since the ‘investment’ deals ignore the rights of those who live on the land, “leaving them homeless and without land to grow enough food to eat and make a living.” Land grabbing has been encouraged by the World Bank and IMF, most aggressively in Africa, but have spread across the world, from Central America to Indonesia.
In April of 2013, a Canadian mining company – East Asia Minerals Corporation – announced that it was working with the Indonesian government to “re-zone” nearly 2 million hectares of protected forest in Aceh for “industrial activities,” including mining, logging, and palm oil plantations. The company announced in a press release that they were working with the government to reclassify zones from “protected forest” to “production forest.”
Environmental groups warned that the reclassification could put biodiversity at risk, including endangered rhinos, elephants, orangutans, and tigers. Scientists from the Asia chapter of the Association for Tropical Biology and Conservation released a declaration stating: “Aceh forests are essential for food security, regulating water flows in both the monsoon and drought seasons to irrigate rice fields and other cash crops… Forest disruption in Aceh’s upland areas will increase the risk of destructive flooding for people living downstream in the coastal lowlands.” Despite opposition from environmental groups, scientists, human rights groups and local communities, the “model democracy” government said it hoped to approve the plan “as soon as possible,” which the mining company said was “positive news.”
This “positive news” has the effect of not only destroying what’s left of the third largest rainforest on Earth – and causing irreversible harm to its biodiversity – but it is also displacing the Indigenous and small farmer communities that live off the land and forests, most of whom are not compensated and forced to either migrate to urban slums or work for minimal wages at the companies that stole their land. Many communities resist, but are met with the “heavy-handed security and paramilitary forces.” In the previous ten years, more than 10 million hectares of land was “given away and converted to plantations,” destroying thousands of communities and laying waste to the environment in the process.
Over 600 conflicts over land in Indonesia were reported in 2011, including 22 deaths and hundreds of injuries. A national human rights commission in Indonesia reported over 5,000 human rights violations in 2012, largely linked to companies involved in deforestation. The founder of the Indonesian Peasant Union – with a membership of 700,000 – noted that the rapid expansion of palm oil plantations “has spawned a new poverty and is triggering a crisis of landlessness and hunger,” marred by forced evictions, violence, torture and even death.
A director of Friends of the Earth in Indonesia noted: “Who controls the land in Indonesia controls the politics. Corruption is massive around natural resources. We are seeing a new corporate colonialism. In the Suharto era you were sent to prison for talking about the government. Now you can be sent there for talking about corporations.” The police presence around plantations has been increasing, as has violent repression as the government “is trying to clamp down on mass protests.”
In the span of thirty years, global agribusiness, pulp and paper companies have turned the islands of Sumatra and Borneo – the third and sixth largest islands in the world – into near wastelands, threatening the incredible biodiversity – including endangered tigers, rhinos and elephants – to develop biofuels, vegetable oil and toilet paper. Scientists and environmentalists recently warned that “one of the 21st century’s greatest ecological disasters is rapidly unfolding.” In a matter of years, more than half of the third largest rainforest on Earth has been destroyed, and 70% of what remains is marked for “transition” into plantations. Nearly one million hectares of rainforest are destroyed every year in Indonesia, with scientists suggesting the endangered wildlife on the region will be extinct within a couple decades.
One Greenpeace official in Indonesia explained: “This is the fastest, most comprehensive transformation of an entire landscape that has ever taken place anywhere in the world including the Amazon. If it continues at this rate all that will be left in 20 years is a few fragmented areas of natural forest surrounded by huge manmade plantations. There will be increased floods, fires and droughts but no animals.” A director of Indonesia’s largest environmental group, Walhi, noted, “The legacy of deforestation has been conflict, increased poverty, migration to the cities and erosion of habitat for animals. As the forests come down, social conflicts are exploding everywhere.” Coal, copper, and gold mining companies are moving into Sumatra and Kalimantan, causing widespread deforestation and violent conflicts with local communities. The rare of deforestation is also increasing rapidly in the poorest province of West Papua.
In May of 2013, the United Nations Development Program (UNDP) reported that Indonesia – with the third largest tropical forest coverage in the world – was “not doing enough to protect its forests.” While Indonesia passed a moratorium on deforestation in May of 2013, a number of loopholes make it almost meaningless.
Due to its rapid rate of deforestation and the draining of peatlands, Indonesia is one of the world’s largest emitters of greenhouse gasses, ahead of Saudi Arabia, Australia, Brazil and France. The large paper company – APRIL (Asia Pacific Resources International Holdings) – has come into conflict with multiple villages in Sumatra as it undertakes a project to destroy 450,000 hectares of rainforest, an area which holds roughly 1.5 billion tons of carbon. A local village leader noted: “We would die for this [forest] if necessary. This is a matter of life and death. The forest is our life. We depend on it when we want to build our houses or boats. We protect it. The permits were handed out illegally, but now we have no option but to work for the companies or hire ourselves out for pitiful wages.”
The devastation to rainforests has not merely been confined to Indonesia, but has spread at an alarming rate across much of Southeast Asia, including Vietnam, Thailand, Laos, Cambodia and Burma, largely being driven by export-led growth, monoculture plantations, and the construction of dams and other large-scale infrastructure projects. The increasing rates of deforestation are exacerbated by the global explosion in land grabs, with the World Bank and other financial institutions like Deutsche Bank funding land grabs across Southeast Asia in which Indigenous people “are bearing the brunt of the seizures.”
In late June, fires started on or near major palm oil plantations owned by large companies became so large that the pollution spread across Malaysia and Singapore, causing a “hazardous” pollution warning in Singapore in the “worst haze” the country ever faced. Soon after, the Indonesian government announced it was investigating eight companies that might have started the fires on Sumatra, though the companies immediately blamed small landholders. An official from the Rainforest Action Network noted, “This recent smog is just the most visible part of the serious deforestation and human rights crisis sweeping Indonesia… Widespread, illegal burning to clear rainforests and peatlands for palm oil and pulp and paper plantation expansion is unfortunately a well-established yearly ritual in Sumatra.”
Farmers, workers, Indigenous people, women, youth, students and NGOs have been forming groups in which they pledged “resistance” in an “alliance against land grabbing” by the government and international corporations. Police have been using excessive force against protesters and Indigenous communities, and several peaceful activists have been imprisoned for opposing land grabs, deforestation and the construction of plantations.
The Indonesian People’s Alliance (IPA) formed in 2013 as an alliance of dozens of civil society groups, seeking to unite forces across Indonesia and internationally to oppose trade “liberalization” and respect national sovereignty. An IPA coordinator declared: “We have been told to preserve our forests, but large industry continues to wreck our environment and marginalize our own people. We cannot continue washing their dirty laundry.”
In June, a “militant peasant organization” – the Alliance of Agrarian Reform Movement (AGRA) – protested in the thousands against land grabbing in Indonesia, stating that the land “needs to be distributed back to the peasantry through genuine agrarian reform.” An official from the Asian Peasant Coalition (APC) – a regional Asian alliance of peasant organizations – noted that resistance was growing not only within Indonesia, but across much of Asia, where peasants were working to launch an “anti land grabbing campaign.”
Is an Indonesian Revolution in the Making?
The circumstances certainly exist – with 120 million people living on less than $2 per day, mass exploitation of workers, labour unrest, violent state repression, land grabs and corporate plundering, peasant and indigenous resistance, environmental devastation, and political corruption – for Indonesia to potentially witness a mass uprising. Workers are organizing across the cities against labour exploitation, while peasants and indigenous communities are organizing across the countryside against land grabs and environmental degradation, and increasingly, they are organizing and working together.
While the leaders of the imperial powers and institutions of the world praise Indonesia as an “emerging economy” and “model democracy,” the population of Indonesia is rising up against the corrupt, plutocratic elites, violent repression, environmental devastation, widespread exploitation and plundering that comes with those buzzwords. In short, the people of Indonesia are struggling to turn their country into a real model for democracy, and for the economy to emerge in respect of that ideal, not against it.
The demolition of a park in Istanbul sparked the urban uprising in Turkey, and the plan to raise bus fare sparked the urban uprising in Brazil. So perhaps the question is not ifIndonesia will experience similar circumstances, but rather: when, and what will be the spark?
Only time will tell, and no doubt, the Indonesians will let us know when it has happened.
Andrew Gavin Marshall is an independent researcher and writer based in Montreal, Canada. He is Project Manager of The People’s Book Project, head of the Geopolitics Division of the Hampton Institute, the research director of Occupy.com’s Global Power Project, and has a weekly podcast with BoilingFrogsPost.