Feb 08 2011

Egypt: Six Million of the Especially Aggrieved

Hernando De Soto’s Op-ed in the Feb. 3rd Wall Street Journal rightly points out that “Egypt’s legal institutions fail the majority of the people. Due to burdensome, discriminatory and just plain bad laws…” Egyptians are marginalized and can’t operate and expand their businesses. He concludes, they “can do little to improve their lives.”

All this is true. But it is also true and important that Egypt is still a rural society. More than half, 57 percent, of Egyptians live in the countryside. And in the countryside Mubarak’s track record with regard to empowering his subjects is abysmal.

Under Mubarak’s watch, one in ten Egyptians lost their farms. Almost two decades ago, families who had been self-sustaining farmers became landless sharecroppers or migrant laborers with a stroke of Mubarak’s pen.

The history books are punctuated by the grievances of those who lack secure and stable rights to land and have sparked many of the civil upheavals of the past hundred years, such as the ones that brought revolutionary regimes to power in Russia in 1917 and China in 1949. And a special and poignant sub-class of these conflicts (including the Mexican Revolution and the Algerian War of Independence) involved the grievances of those who thought they had secure rights to land only to have that land snatched away with the connivance of the regime in power.

And that’s just what happened in Mubarak’s Egypt.

In 1952, Egypt went from one authoritarian regime to another—from a corrupt monarchy to a military regime. At the time, land ownership in Egypt was highly centralized. Forty-four percent of rural inhabitants were completely landless. And the top one percent of the population owned more than one third of the land. In that overwhelmingly agrarian society, the first and most important economic reform carried out by the new regime was the 1952 land reform: some of the landless poor became full landowners, but the biggest part of the reform was the creation of “registered tenancy”, which gave the large population of insecure sharecroppers new, perpetually secure rights to the land they were farming, together with much lower, fixed rent payments. If the land was sold by the owner for non-agricultural purposes, the registered tenant was to receive half the proceeds.

For most practical purposes, the registered tenants, from that time onward, functioned as though they were the owners of the lands they farmed.

And so things continued, through the successor regime of Anwar Sadat, and into that of Mubarak: the registered tenants remained pretty much like owners except that they paid a low annual rent. Meanwhile, most of the landlords moved to the cities and developed other sources of income.

When Landesa (then called the Rural Development Institute) carried out fieldwork in Egypt in the 1980s we urged then-Minister of Agriculture Dr. Youssef Wally ( in a letter dated July 12, 1984) that the government should buy out the landlords and confer full, formal ownership on the registered tenants.

Our fear was that the old owners might, at some point in time, gain the capacity to reverse the reform, even decades later. But our urgings found no support in the Mubarak government.

Soon, our fears came to pass. In 1992, with little fanfare, and the acquiescence of President Mubarak, the Egyptian legislature adopted a five-year phase out of the registered tenancy provisions of the 1952 land-reform law, beginning with an immediate tripling of rent levels. By 1997, tenants would once again be as they had been under the old monarchy: evicatable at the landlord’s pleasure, and subject to any rent the landlord wished to charge; or replaced by hired day labor.

There is no happy ending to this story. During the five years 1992-97 that is precisely what happened. Roughly one million tenant households (about six million people, or close to one in ten Egyptians) went from being secure, moderately prosperous farmers who enjoyed owner-like status and paid a low fixed rent, to being traditional insecure sharecroppers, or someone’s source of day labor.

Subsequent research by specialists in Egyptian agriculture found that this policy reversal caused widespread eviction of former registered tenants, increased rural poverty and indebtedness, and spurred an increase in urban migration by the young. Average rents eventually quadrupled.

Like their city cousins, Egypt’s rural landless see no way to improve their lives, save for one – bring down the man who took their land and their livelihood — Mubarak.

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