Occupation of an Egyptian factory: downsizing to increase efficiency or cutting people out
Under the previous Egyptian president, Hosni Mubarak, numerous public companies were sold off to the private sector. The process left many workers without employment from layoffs and factory closures. Here is a video of Egyptian workers explaining the situation they are in as they occupying an abandoned factory.
Privatization was represented as a move to efficient business practice. In that case, it should have helped improve the country’s economy, if we understand improvement to mean better standards of living that would support the basic life needs of people.
This sort of doing business, ‘rationalizing’ both private and public firms, is not unique to Egypt. The problem with its practice is that even if the GDP of a country grows, poverty is in most cases is increasing.
This is true in many countries, no matter the size of their economies. And the practice of buying existing companies (or factories) and shutting them down is not new. On paper, it might even be shown to provide a short-term increase in the nation’s profits, depending on how you like to calculate such things.
For example, a group buys a working factory at low cost, closes it, and sells off all of its assets (machines, land, etc.) for a nice profit over the initial cost of purchase. They might decide to keep a few factories open in the short to medium term with reduced number of employees and call this efficiency. In time, even these can be closed and sold off as social and political pressure from the initial round of mass closures eases up.
Downsizing is another word for this sort of efficiency, putting capital markets in control of business management. For an example of this in the US, during the Reagan’s presidency, see the video clip below. It’s from Adam Curtis’ documentary, The Mayfair Set. I recommend watching the video from about 2 minutes and 10 seconds in.
You can watch the entire four part documentary for free on Youtube .