CAIRO - Hundreds of members of four unions that have organized (illegally ) over the past three years, as well as workers' rights activists, attended a planning meeting of the Egyptian Federation of Independent Labor Unions last Wednesday evening. The new labor federation is demanding a minimum monthly wage of 1,200 Egyptian pounds - about $200 - (in contrast to the rarely enforced current minimum of 400 pounds ) and new legislation guaranteeing the right to strike. Some activists appearing on Egyptian television talk shows have also raised the idea of instituting a maximum wage.

The meeting reflected a widely shared belief that strikes over the dozen years preceding the recent popular uprising, as well as the unionization of independent workers, played a key role in the ouster of President Hosni Mubarak and the shaping of demands for democratization. Until about two months ago, anyone who took part in political activity such as this in the workplace, universities, high schools and the organization of new political parties became a target of surveillance and persecution by the state security apparatus.

A prosperous former businessman, an activist in the broad movement that spearheaded the popular revolt, told Haaretz that "without changes in socioeconomic policies, this revolution cannot progress." He emphasized that "most of us [in the various movements] say that social justice is our top priority. In the face of tremendous poverty and the deterioration of social services, I, for example, cannot oppose taxing the wealthy, or instituting genuinely free education. Everyone is talking left-wing, including those who do not define themselves as left."

The army, the Egyptian business community and officially-sanctioned unions have demanded that workers stop the strikes and protests that have continued even after February 11 (the day of Mubarak's ouster ). The fact that the strikes were not suppressed by force is also indicative of the power of workers in the broader democratic movement.

According to the activist and former businessman cited above, the demand to end strikes is out of place. "Legislation permitting the establishment of independent labor unions must be enacted soon, and [these unions] will negotiate with employers and the state, he said."

Businessmen's government

In the same direction, Dr. Samer Soliman, an activist in one of the leftist parties formed in the last week, told Haaretz that "on the left we are not talking any more about nationalization; we are not ignoring liberal freedoms."

Soliman is professor of political economics at the American University of Cairo, and the author of the book, "Strong Regime, Weak State," published in Arabic in 2006 and soon to appear in English.

And from the other side, "Liberal Egyptians understand that they cannot ignore demands for social justice, but there is no agreement about what this means." he said. "Many people oppose the institution of a progressive tax, claiming that it will prevent businessmen from investing. But liberals know they need to mobilize the middle class and the poor, and this will not be possible without social policy."

A progressive income tax that rose to a 40 percent ceiling was supposed to be in effect in Egypt before 2005, but in practice direct taxation was rarely enforced. Businesspeople claimed that it was too high, and a compromise was reached on a uniform 20 percent tax, Soliman explained. Meanwhile, indirect taxes were raised in the mid-1990s.

Like many others in the January 25 movement, Soliman is unimpressed by the so-called "purification" (anti-corruption ) campaign being conducted by the Egyptian attorney general's office these days, which includes the arrest and interrogation of former government ministers and senior businessmen. "Mubarak began his regime with a 'purification' campaign aimed at Sadat's government," Soliman said. "Every new regime does the same. And the confiscation of funds does not solve problems either."

In 2004, a so-called "businessmen's government" was established. "The marriage between the old governmental bureaucracy and some sections of the business community was carried out in a vulgar fashion; corruption was an integral part of the system," Soliman said.

Wealthy people were appointed as ministers in charge of the areas of their business activities; for example, a land developer as construction minister, and a tourism minister who was in the tourism industry. "The impression was created that the country had been sold to them," he said.

A health system reformer told Haaretz that Egyptian families bear 70 percent of their health expenses, which means that low-income families are left out. "The former health minister, who invested in private healthcare, had a financial interest in private medicine, has no interest in tax reform and a different distribution of state revenues that would strengthen the government health system," he said. Similarly, a senior advisor in the education field told Haaretz that Egyptian families bear 50 percent of these costs.

Foreign funds and corruption

An official in development work in Egypt says that since 2004, loans from foreign development organizations to Egypt have been diverted mainly to big-business projects in the fields of railroads, energy and airports. These projects, chosen by the Egyptian government, suited the approach of the International Monetary Fund and the World Bank, which was to create jobs. However, this official says, the Egyptian government persistently rejected suggestions by the development organizations led by the World Bank to lend money for social service initiatives in health and education.

These organizations now expect that the new regime will favor aid in neglected areas, and that they will be allowed to cooperate with nongovernmental Egyptian organizations as well. The official said that foreign development groups were aware of the problem of corruption, "but if we condition aid on an absence of corruption, we will only be able to work with countries like Sweden and Norway."

In contrast, an advisor on education policy believes that organizations such as the World Bank and the IMF actually approved of the privatization campaign of the so-called "businessmen's regime," and, she said, aided in the detrimental shift from the concept of a welfare state to that of a pro-poor policy. Liberal and left-wing activists believe, as she does, that poverty is one of the key explanations for the rising power of political Islamic groups in Egyptian society. "A welfare policy is also necessary in order to check the power of the Muslim Brotherhood without resorting to the oppressive measures of the previous regime," they say.

A demand raised at the planning meeting on Wednesday was the immediate dismantlement of the officially-sanctioned Federation of Labor Unions, which numbers four million members in 24 trade unions. The officially-recognized labor association was one of the backbones of the old regime and the main organizing force of the ruling National Democratic Party when there was a need to bring voters to the polls or demonstrate support for the government. The attorney general has opened an investigation of its senior officials on suspicion of corruption, irregularities and neglect of their role as representatives of the unions' members.

On January 30, the respective unions of real estate tax collectors, medical technicians and retirees, and the independent teachers union announced the establishment of a new federation. It has been reported that thousands of workers in government and privately-owned industries have declared their intention to join. Now that legislation is suspended, the right to form new trade unions is based on the International Labor Organization agreement, which Egypt has ratified.