No module named pkg_resources

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I’m deploying a Django app to a dev server and am hitting this error when I run pip install -r requirements.txt:

Traceback (most recent call last):
  File "/var/www/mydir/virtualenvs/dev/bin/pip", line 5, in <module>
    from pkg_resources import load_entry_point
ImportError: No module named pkg_resources

pkg_resources appears to be distributed with setuptools. Initially I thought this might not be installed to the Python in the virtualenv, so I installed setuptools 2.6 (same version as Python) to the Python site-packages in the virtualenv with the following command:

sh setuptools-0.6c11-py2.6.egg --install-dir /var/www/mydir/virtualenvs/dev/lib/python2.6/site-packages

EDIT: This only happens inside the virtualenv. If I open a console outside the virtualenv then pkg_resources is present, but I am still getting the same error.

Any ideas as to why pkg_resources is not on the path?

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