16 April 2008: Towards the end of the Cold War, factory workers in Poland went on strike seeking better wages to offset skyrocketing food prices. In doing so, they began a revolution.  Today, workers in Egypt are rioting as bread grows unaffordable. Is history repeating itself?

Solidarity: from Riots to Regime Change

In the early 1970s, world food prices doubled. Communist Poland, which had kept food prices artificially low through subsidies, was forced to reduce its subsidies and allow prices to rise. But when Poland’s meagerly paid factory workers sought higher wages to afford rising food costs, they couldn’t call on their union for collective bargaining or organized strikes because the Communist Party controlled all unions.

So the workers rioted and initiated wildcat strikes. Tensions ran especially high in Gdansk, Poland’s principal port and home to enormous ship factories. In December 1970, shipyard workers in Gdansk went on strike, rioted, and set fire to the city’s Communist Party headquarters. As workers in other Polish cities began to strike and riot, the government cracked down, resulting in hundreds of arrests and 42 deaths. Simmering tensions boiled over again a decade later when, in July 1980, the Polish government further decreased subsidies and allowed the price of meat to rise. In response, the Gdansk shipyard workers held another strike, this time calling for the legalization of independent trade unions and a monument to the 42 shipyard workers who had been killed 10 years earlier. The government conceded to both demands with the 1980 Gdansk Agreement.

However, when General Jaruzelski became the new communist leader of Poland a year later, the government switched from conciliatory to confrontational and cracked down on the Solidarity trade union movement. Martial law was declared and riot police broke up strikes.  In 1982, Jaruzelski declared that Solidarity and other independent labor unions were once again illegal. But although it had been driven underground, Solidarity remained active. And when the government allowed food prices to rise by 40 percent in February 1988, Solidarity again initiated a wave of strikes. By August the ongoing strikes had stagnated the Polish economy and the government agreed to negotiate. The following year, Solidarity was again legalized. The group then won a huge victory in the legislative elections of April 1989, allowing Solidarity representative Tadeusz Mazowiecki to become the first non-communist Prime Minister of Poland since WWII.

Revolt of the Hungry

Thirty-five years after Poland’s government was beset by climbing food prices in the 1970s, a nearly bankrupt Egyptian government has similarly been forced to cut subsidies and allow food prices to rise. The giant Misr Spinning and Weaving textile factory in the city of Mahalla has been the epicenter of recent worker discontent. For the past several years, wildcat strikes by the factory’s 24,000 workers have been setting off waves of strikes and riots throughout the country. The Egyptian police have brutally cracked down on the demonstrations, but the strikes and riots have continued.

Egypt is not Poland, but the parallels are striking. For both Poland and Egypt, rising international food prices forced the government to lift unsustainable food subsidies. Workers seeking higher wages, unable to turn to the government-controlled union, begin rioting and holding strikes. Major industrial centers—Gdansk for Poland, Mahalla for Egypt—begin holding larger and larger worker demonstrations. The question is: will Egypt’s strikes be as victorious as Poland’s and bring about the legalization of independent labor unions?  Speculating even further, will the strikes and legalized labor unions bring about regime change through elections? Perhaps the best way to predict Egypt’s future is to look at Poland’s past.

Bankrupted by Bread

Rising international food prices were the catalyst for both the Gdansk and the Mahalla uprisings. In the early 1970s, wheat prices doubled because of changes in supply: regional droughts decreased the amount of food grown, and the Arab oil embargo increased the cost of transporting that food. From 2006 to 2007, wheat prices doubled because of increases in demand: China’s growing middle class began eating more meat and the U.S. government began buying more corn for biofuel production. The higher wheat prices were especially hard on Egypt, the world’s second largest wheat importer.

In communist Poland, leaders Edward Gierek (in power 1970 to 1980) and General Jaruzelski (1981 to 1989) kept food prices low through subsidies. The government would buy milk from farmers at ten zlotys per liter and then sell it in stores for four zlotys. The state would pay farmers 130 zlotys per kilogram for live hogs and then sell the butchered pork at 70 zlotys per kilogram. The system was regularly abused: farmers would buy low-grade bread, which the government had kept at 6¢ per pound throughout the 1960s and 1970s, and use it as animal feed because it was cheaper than the wheat it was made from. Price subsidies came to absorb a staggering one-third of the national budget.

Egypt’s dictator-president Hosni Mubarak, who has been in power since 1981, similarly uses subsidies to ward off civil discontent with similarly disastrous results for the national treasury. As of 2008, the Egyptian government subsidizes four foods: baladi bread, wheat flour, sugar, and cooking oil. The baladi bread (round loafs of bread similar to pita bread) is subsidized so that each round loaf costs only five Egyptian piasters (about one U.S. cent).  The actual market price of this baladi bread, which makes up over a quarter of the caloric intake for Egypt’s 81 million inhabitants, is two to three times the subsidized price. All that bread adds up: for most of the 2000s, Egypt’s subsidy program took up eight percent of the national budget. And in March 2008, in reaction to a rash of food riots, the Egyptian government immediately increased resources for the subsidy program from $3.6 billion to $6.1 billion and made further plans to add 15 million new names to the list of those receiving cheap rations of sugar and cooking oil. Should these plans be carried out, the government’s annual subsidy costs will spiral up to $13.7 billion for 2008—almost a third of Egypt’s $44.5 billion budget.

Both Gierek and Mubarak were forced to allow food prices to rise when food subsidies drove the state deeper and deeper into debt. In Poland, the increasing burden of subsidies caused external debt to rise from $100 million in 1971 to $4.8 billion in 1974 (and to $25.5 billion in 1981). The Polish government, no longer able to bear the burden, reduced its subsidies most drastically in 1980, allowing the price of meat to rise sharply. In 1981, General Wojciech Jaruzelski, Poland’s new leader, decreed retail price increases of 110 percent and an end to wage increases. Such drastic price increases would become regular occurrences for Poland during the 1980s. 

As of 2007, Egypt’s external debt stood at $29.9 billion. The increasing cost of subsidies has contributed to the annual deficit, piling on $7 billion of debt each year. Unable to sustain so much debt, the Egyptian government allowed subsidized bread and cooking oil to increase in price by 50 percent over the course of 2007. In an attempt to keep the prices of subsidized food from escalating too rapidly, the government waived import duties on rice, dairy products, and edible oils in April 2008. In spite of these measures, it is clear that food prices will continue to climb.

Useless Unions

In Egypt, as was the case in Poland, labor unions are controlled by the ruling party.  Therefore, workers are unable to turn to the government-controlled union to strike or negotiate. In communist Poland, all trade unions were part of the ruling Communist Party. In Egypt, the Egyptian Trade Union Federation (ETUF) is an arm of the ruling National Democratic Party (NDP). While on paper ETUF holds elections for trade union officer positions and allows strikes and collective bargaining, in reality the NDP appoints the officers of ETUF’s 23 trade unions and ETUF-organized strikes and collective bargaining do not occur. Other trade unions are illegal: workers acting outside the scope of ETUF can be fired.

In both Egypt and Poland, wildcat strikes in major industrial centers of the country led to a wave of strikes throughout the country. For Poland, the major waves of change began on August 14, 1980, when 17,000 workers of the Gdansk shipbuilding factory called for the legalization of independent trade unions. A ripple of strikes spread from Gdansk, first to the other port cities and then to the rest of the country. A month later, the Polish government gave into the workers’ demands. 

For Egypt, the industrial epicenter of the wildcat strikes has been the enormous Misr Spinning and Weaving factory in the Nile delta city of Mahalla. Over 20,000 of the workers from the factory went on strike and occupied the mill in December 2006. They were seeking the large bonuses that typically are given in the summer to offset the increasing prices of food, which had been denied them that year. The Misr Spinning company offered to grant the bonuses if the workers would call off the strike and an agreement was reached. However, the wave of strikes had already begun to spread from Mahalla: over the following year, more than 200,000 workers went on strike as part of 650 workers’ protests across Egypt. And when the Misr Spinning company failed to live up to its side of the bargain, the Mahalla workers again hit the picket lines and occupied the building in September 2007. 

Eight months later, again facing rising food costs and insufficient wages, the city of Mahalla rioted. While the usually rebellious factory workers were initially placated with a $50 bonus (the equivalent of a month’s wages), the unemployed youths of the city began a riot that swelled to over 50,000 participants. The Egyptian government responded with tear gas and rubber bullets, arresting hundreds and killing at least four. The April 2008 Mahalla riots are especially threatening to the state because the typically stable Mubarak regime is showing cracks. The rising cost of food, the lack of a clear successor for the 79 year old Mubarak, and insubordination within the government have made the new vulnerability of the regime clear.

So the pieces are all there in Egypt: food prices rising with no end in sight, a debt-ridden government with few options, ineffective state-controlled unions, and citizens desperate enough to risk their lives by rioting. It remains to be seen how the pieces will fall. The world does not yet know how the results of the Mahalla uprising will compare with the results of the Solidarity movement because Egypt is still in the throes of riots and police crackdowns. But one thing is certain: Egypt is going to enter into a new period of its modern history, because the former formula for stability no longer adds up.