Islamists in Power Adopt Economics of Old Regimes

Is Egypt's emerging economy better suited to upholding the government of the Brotherhood or true Islamic values? Khalil al-Anani comments on the failure so far of new Arab governments to develop an economic model that is distinguished from authoritarian predecessors or that is even uniquely Islamic.

al-monitor Street vendor Ayman, 25, leaves Tahrir Square after clashes with supporters of Egyptian President-elect Mohamed Mursi, in Cairo June 28, 2012.  Photo by REUTERS/Amr Abdallah Dalsh.

Topics covered

finance, business, tunisia, political islam, muslim brotherhood, muslim, islamic economy, egypt, arab spring, arab

Aug 23, 2012

Despite the importance it holds, the issue of the economy has not been placed on the table by Islamists. Paradoxically, although Islamists have risen to power in more than one Arab country, we have not yet heard of an economic policy on the part of Islamists that would set them apart from other political or ideological forces. What is even more surprising is that there have been no fundamental differences between the economic policies adopted by Islamists and those that prevailed under the authoritarian regimes. Thus, the pertinent question is: Do Islamists have an actual economic vision that may be different from the one put forth by their predecessors? And if they do, do they have the capacity to apply it?

Away from any normative judgments that do not relate in any way to reality, this question must be answered by examining the current situation and testing the economic policy (should such term be appropriate to use) adopted by Islamists, particularly in Egypt. One must also examine statements made by Islamist leaders and, most importantly, observe the decisions and measures they have taken thus far.

Four important points must be highlighted in the Islamists’ political economy.

First, Islamist parties continue to describe their programs and economic visions as based on Islamic teachings and curriculum. They attempt to apply what has come to be known as the “Islamic economy,” which is a controversial term in academic and intellectual circles. In a nutshell, this term has emerged as an attempt to escape the “capitalist and socialist ideologies,” and not as a result of an integrated economic theory inspired by Islamic values. It should be noted that there is a clear dichotomy between Islamic values and the practices involved in this kind of economic activity. For instance, there is not much of a difference between the activities of the so-called “Islamic banks” and the other normal commercial banks. In fact, some terms were only replaced with others such as riba (interest), gharar (a hazardous sale), sukuk (Islamic bond) and many other terms.

Ironically, the Islamic economic terms were not created at the hands of Islamists. For these terms first emerged in the early 1960s in the regions of Ghamr and Zefta in the Delta in Egypt, through the cooperative saving operations between the poor and the family in rural Egypt. This was the first step to establish Nasser Social Bank during the era of former President Gamal Abdel Nasser.

Islamists have tried to use such terms in order to gain legitimacy and social acceptance. Other Islamists employ the economic terms for speculation purposes and more profit, unaware of the economic and mathematical implications. The concept of Islamic economics has turned into a source of profit and wealth amplification. Islamist clerics and scholars are not far removed from such practices, as they participate in laying down the legal and doctrinal basis of the economic transactions, which are in direct conflict with the values of justice and asceticism that ostensibly constitute the basis of the Islamic economy.

Second, there is an unmistakable dichotomy between what is stipulated in the Islamists’ economy and their actual policy. While in the program of the Freedom and Justice Party one can notice the overuse of terms and language that are based on what has become to be known as “the Islamic economic system,” the actual economic policy applied by the Party on the ground is not much different from the capitalist practices that prevailed during the era of the former regime. (Today, negotiations are under way with the International Monetary Fund so that Egypt can obtain a $4 billion loan, which was strongly rejected by the Brotherhood before Mohammed Morsi came to power).

This prompted some researchers to describe the Brotherhood's economic vision as a right-wing, "neo-liberal" vision that does not differ much from that of the regime of Hosni Mubarak and his men.

This is also the case with Tunisia's Ennahda Party, whose leaders never miss a chance to call for more capital, stimulation of the private sector and engagement in economic partnership that is based on international free market principles and commitment to international conditions, in reference to economic liberalization programs, which are often applied at the expense of the poor and low-income people.

Islamists fail to realize that such policies were among the major causes behind the revolts against the previous regimes. Such policies caused social and economic disparities between the rich and the poor and the tragedy of Mohamed Bouazizi is a lesson to be learnt.

Third: There is a state of schizophrenia and separation between the Islamist religious and ideological discourse on the one hand, and their economic behavior on the other. Excessive talk about transparency, asceticism, social justice and fair competition is met with an accumulated capital, an inflated wealth and interest in "Islamist" businessmen at the expense of the poor. Businessmen in the Brotherhood group are a clear example of this duplicity. These thoroughly apply the "market economy" model by acquiring dozens of companies and factories and trying to monopolize and grab a lot of economic sectors during the post-revolution phase.

Worse still, there is an attempt to silence those opposing this economic trend, such as laborers and marginalized people, through the control of labor unions and professional associations and unions.  Amazingly enough, businessmen who support Islamists adopt the same political and economic arguments and calculations to justify their behavior, most notably the increase of growth rates and the attraction of foreign investment at the expense of development and equitable distribution of income and resources.

Many Islamists are seemingly dazzled by the economic model provided by the Turkish Justice and Development Party (AKP), which succeeded in transforming the Turkish economy from the brink of collapse and bankruptcy to a strong economy. However, a closer look at this model reveals that it has crushed a lot of poor and marginalized people in order to achieve the interests of the bourgeois class that is related with the party, such as the middle class city dwellers. But let us leave this issue for a different article.

Fourth, and most importantly, there is the Islamists' insistence on the adoption of a "welfare state" model in their economic policy. This model is similar to an economic exploitation, which deals with individuals as employers or "passers-by" who deserve grants and affection, not as citizens who have rights.

In other words, one of the Islamists’ economic activity mechanisms does not stem from the fact that there is a structural flaw in the prevailing economic system, but on the fact that the problem lies in those who are in charge of it. (Perhaps this explains the statement made by the Brotherhood leader and the famous businessman Hassan Malek, in which he tackles the efficiency of the Mubarak regime economic policy and criticizes some monopolistic and financial corruption practices.)

Islamists believe that they can manage the country's economic activity as they manage their social pastoral activities. The Brotherhood's social, service and economic networks, for example, represent a kind of a parallel or informal economy that supports the principle of "subsidies," not partnership between equal citizens, let alone transparency and accountability.

These networks play an important role in providing political and electoral support for the Islamists in the face of their competitors. Therefore, the adoption of this policy at the macro level infers the transformation of the entire society into a constituency for Islamists that ensures their permanent survival in power.

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