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Neoliberalism in Egypt's Informal Economy

Neoliberalism in Egypt's Informal Economy

Informal Economy Markets of Dispossession: NGOs, Economic Development, and the State in Cairo by Julia Elyachar; Duke University Press, Durham, 2005; pp 296, price not stated.

Neoliberalism in Egypt’sInformal Economy

Markets of Dispossession: NGOs, Economic Development, and the State in Cairo

by Julia Elyachar; Duke University Press, Durham, 2005; pp 296, price not stated.


lobalisation’s implicit promise of empowering the poor in a borderless world incites scepticism among serious social scientists. “Globalisation is Banker’s (IMF and the World Bank) Boast”; it is an ideological garb for the neoliberal desires of finance capitalists, trying to spread their influence across national borders, comments Fred Cooper [Cooper 2001:192]. However, the role of the “state” and “civil society” in globalising neoliberalism remains unresolved. Some scholars, such as David Harvey, emphasise that “to make the contemporary wave of neoliberalism work, the state has to penetrate even more deeply into certain segments of political-economic life” [Harvey 2000:65]. But, what happens when the World Bank and other international lending organisations (IOs), who have had nation states as their clients, tend to bypass the state and turn themselves into moneylenders to the poor, muddling the local, global and national scales?

Amending Harvey, Julia Elyachar’s Markets of Dispossession studies practices of diverse institutional forms, such as the state, IOs and non-governmental organisations (NGOs) together in “one common field of power” (p 29) to understand how neoliberal market practices are implanted among the poor. She traces the concrete ways in which IO, state and NGO practices, meant to empower the poor, steadily draw workshop masters in the outskirts of Cairo into the vortex of finance capital and dispossess them, economically, politically and physically. She looks at the outcomes of a project that tries to make “micro-entrepreneurs” out of workshop masters whose only asset, IOs notice, is “social capital” or networks, possessed individually (p 188). Experiences of Grameen Bank experiment in Bangladesh inspired the project.

The era of globalism, characterised by “global” as opposed to “national” development, forms the context of Elyachar’s ethnography (p 76). While social welfare programmes of the state face a cash crunch due to World Bank-imposed structural adjustment policies, “global” capital tends to reach the “local” by surpassing the “state”. The analytical levels – “local” and “informal” – which were earlier considered as obstacles to development are now valorised by the development bureaucracy against a “corrupt” state. Gupta and Ferguson (see Elyachar for reference) have called for treating such analytical levels and their evaluations as products of bundles of situated social practices. Consequently, state and non-state modes of power and practices have to be considered within a common frame without making any assumptions about their spatial reach or relations to the society. Consider mapping the informal as one such practice, a la Elyachar.

Mapping or accounting was crucial to implanting neoliberal practices in Egypt’s “informal economy”. Maps lend flesh and blood to official abstractions, such as “informal economy” or “social capital”. The process of map-making or accounting (i e, information gathering) entailed tensions between the Egyptian state and the IOs. The IOs tried to gather knowledge about life and practices of “individuals” who are not represented in the national statistics. Therefore, giving official status to the “informal” is stepping onto the state terrain. However, the “informal economy” was defined in terms of several objective criteria – low capital base, fewer than 10 people, simple labour tools – to avoid such state-IO conflicts, typical of globalisation. A production unit that fulfilled the latter attributes was called a “micro-enterprise” by the IOs. “Micro-enterprise” does not have the extra-legal connotation of the “informal” (p 82). Moreover, establishment of an aid-money-financed social fund headed by the Egyptian prime minister to gather data on and fund the microenterprise gave state agencies access to informal economy and information networks. On the other hand, emphasis on the informal found collaborators in NGOs, committed to social justice through selfempowerment and enfranchisement. Hence, the tropes of “social capital” and “informal economy” brought a multiplicity of dispersed wills of state agencies, IOs, bureaucrats and NGOs into one common conception of how to help the popular classes or alleviate poverty.

A new domain and agents of intervention emerged. Young graduates and workshop masters became potential “microentrepreneurs” and many unemployed graduates and workshop masters identified themselves with this new-born category. The agent or the location of such interventions and disciplining power was a hybrid of state, IOs and NGOs or roles that cut across such institutions.

Insightful Ethnography

To explain the role of this new kind of neoliberal governmentality in shaping the political-economic life of the Egyptian popular classes, Elyachar uses works on

Economic and Political Weekly September 9, 2006 value, property and actor-network theory. Elyachar argues that a liberal view of property and value undergirds the optic of social capital. Individual persons are seen to be storehouses of value, which can be cashed in at their will. On the contrary, the popular classes of Egypt rely on symbolic and material relationships of obligations among people, or on the “relational value” that is produced and realised, historically, situationally and performatively (p 145). The centrality of relationships – or relationality – is habitus shared by the popular Egyptian classes in general, and workshop masters in particular. However, Elyachar reminds us that the Egyptian craftsmen are by definition involved in markets; they sell services for money. Such transactions are calculative unlike the Maussian images of reciprocal giftexchanges (p 144). But maximisation of short-term individual benefit, inimical to the larger network, is looked down upon by the members of the popular classes. Thus, the lending practices of the NGOs and IOs set off tension-ridden interactions between the “micro-entrepreneurs” who tend to buy into the neoliberal market ethics and their wider network of fellow workshop masters, critical of the profitmaximisation motive.

Elyachar calls this process a dialectics between positive (relational value produced through building network) and negative value (maximisation of short-term gain). She rightly interprets such dialectics as a real world answer to the classical economic problem of explaining how maximisation of individual gain may lead to collective benefits (p 219). Adam Smith’s answer to the problem was that an economy of plenty and an invisible hand will solve the contradiction between property rights and moral rights of the poor. Practice seems to have falsified that time and again. But real life social formations devise practices to address such problems, as did the “dispossessed” popular classes in Egypt. Hence, Elyachar concludes: “there is a multiplicity of markets, each with its specific forms of labour, culture, technological mixes and modes of organisation specific to time and place” (p 26).

The project of empowering the poor through debt, like many other development projects, failed because it could not lift the poor from poverty. Workshop masters displaced from their original habitat by the IOs and the state could not find customers. Trying to maximise shortterm benefits brought disrepute to many workshop masters. The ones who could maintain their networks and relationships succeeded. The youth micro-entrepreneurs or businessmen could not succeed because they simply lacked the dispositions or habitus required for navigating the domain of workshops. Paradoxically, the project succeeded through its failure (p 209). Empowerment money generated a “field” of practices and expectations in which the poor remained poor but it created new economic subjects predisposed to accept the strictures of debt and to embrace empowerment through the market (p 210). These subjects came to view successes and failures as outcomes of their individual actions, even when enraged at others. To be good entrepreneurs, they realised that they have to understand the market and forced the bank to release the aid money. Thus, there were struggles but such conflicts reproduced the system, without challenging it at the systemic level.

Overlooking Exploitation

This insightful ethnography, however, looks primarily at relational value and exchange networks. Elyachar keeps “extraction of economic value” outside her analytical frame (p 143). However, a multiplicity of markets depends on multiple and culturally specific ways of mobilising cheap labour to produce goods and services or “value” to be exchanged or given. Thus, by separating allocation of labour or “value” from “relational value”, Elyachar deprives the reader of a holistic picture of the informal economy in Egypt.

Elyachar uses the concept of “structural power” to understand how the workshop masters’ incorporation into a free-market robs them off their power to evaluate or decide “what matters” or to “structure their possible field of actions” (p 8). Anthropologists [Eric Wolf 1990] and economists [Harris-White 2003] use concepts similar to “structural power” to not only ascertain how actors set their own priorities but also to explain how economy is embedded in social structures of caste, kinship and patriarchy. The concept of “structural power” helps them to emphasise that the headman, the caste leader or the dominant caste or male members in a family or community play crucial roles in allocating social labour in the economy by restricting the possible range of actions of their respective inferiors. Barbara HarrisWhite’s recent study – India Working – on the informal economy and labour in south Asia is a case in point.

The chief weakness of Elyachar’s study is that it informs us little about the positions of these workshop masters in the subaltern social hierarchy and thereby remains almost silent on role of the workshop masters in labour allocation. Although the networks of exchange can be sites of realisation of value and allocation (exploitation) of social labour simultaneously, Elyachar tends to overlook the exploitative aspects of subaltern social relations. It is unlikely that popular classes in Egypt do not have any such divisions within themselves. A consideration of hierarchies and differences within the popular classes may lead to a conclusion different from what the book argues. Rather than obliterating the power of the workshop masters, the empowerment debt may have enhanced or redefined their power vis-à-vis individuals and groups, lower in the social hierarchy.

Nonetheless, Elyachar’s ethnography vividly shows how concrete practices translate and instil the globally dominant value system of neoliberalism in particular contexts. Students of development studies, labour studies, and social scientists trying to understand the role of the state in neoliberal times will definitely find this ethnography useful.




Cooper, Frederick (2001): ‘What Is the Concept

of Globalisation Good for? An African

Historian’s Perspective’, African Affairs,

100:189-213. Harris-White, B (2003): India Working: Essays on

Society and Economy, Cambridge University

Press, Cambridge. Harvey, David (2000): Spaces of Hope, University

of California Press, Berkeley. Wolf, Eric (1990): ‘Facing Power: Old Insights,

New Questions’, American Anthropologist,

(92): 586-96.

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