In response to rising oil and food prices, Egyptian President Abdel Fattah el-Sissi recently hinted that Egyptians should “eat leaves” to survive under the country’s worsening economic situation. Sisi’s comments come as Egypt’s poor find it increasingly difficult to obtain essential goods due to soaring inflation, a shrinking middle class and soaring prices of subsidized goods. . The situation has been exacerbated by Russia’s invasion of Ukraine and the ensuing global wheat shortage, which has hit Egypt particularly hard as it imports most of its wheat supplies from abroad.
Despite Prime Minister Sisi’s 2014 pledge to revive the economy, rising inequality and a growing economic crisis are evidence that Egypt has effectively broken the long-standing social contract between the state and its people. It is. Egypt’s dire economic situation requires further investment by Sisi’s government, particularly in women and the poor, to reinvigorate the social contract. Egypt’s allies, particularly the United States, should also use its influence to condition economic aid on the Sisi regime and reallocate a larger portion of aid to social welfare programs.
pillars of the social contract
Considering that Egypt is the world’s largest importer of wheat, the consumption of its main bread product, eish baladi, is, It is seriously threatened by both domestic and global policies. In addition to its extraordinary cultural importance in Egyptian cuisine, eish baladi is an important part of the Egyptian economy and is also considered by many Egyptians to be the symbolic center of the social contract between the state and its people. Understood. From his important role in the government of former Egyptian President Gamal Abdel Nasser’s socialist-nationalist regime to the 1977 bread riots that erupted in response to former President Anwar al-Sadat’s attempts to abolish bread subsidies; and even the mass social movement that succeeded in overthrowing the former Egyptian president. In 2011, President Hosni Mubarak declared that subsidized bread has long been at the center of Egyptians’ economic and political grievances, and an important indicator of the state of relations between the government and its people. With more than 70% of Egyptians currently dependent on the state’s subsidized bread program, the government is targeting Egypt’s most vulnerable populations, especially women, who have disproportionately borne the brunt of the recent economic crisis and wheat shortage. If we fail to keep bread affordable for the poor – this bond between nation and people is broken.
egypt food crisis
Although Russia’s invasion of Ukraine did not cause a food crisis in Egypt, the war’s disruption of global wheat supplies certainly exacerbated the government’s existing inability to meet the population’s demand for the staple food. Russia and Ukraine together supply more than 80% of Egypt’s wheat imports. In the first 100 days of Russia’s war in Ukraine, world wheat prices rose by almost 60%, prompting Egypt to diversify its wheat imports and seek purchases through international tenders. And although wheat prices have since fallen, global supplies remain in short supply and a global food crisis remains a real possibility, experts say.
Bread subsidies have long been at the center of Egyptian economic and political grievances.
To replenish wheat supplies, the Egyptian state has relied on some of the most vulnerable sectors of the population. Egypt was able to secure a steady supply of wheat during the first months of the Ukraine war, but by October 2022 it was unable to meet the growing demand for subsidized bread. While the country has struggled to find alternative supplies internationally, it has increased its reliance on domestic producers, leaving many farmers in financial distress and leaving poor Egyptians struggling with food supplies. The burden of price increases was only slightly alleviated.
women and the poor
The Egyptian government’s willingness to exploit its often impoverished small-scale farmers is indicative of the deterioration of the social contract between the state and rural farmers. Last year, Sisi’s government launched a series of policies to encourage, and eventually force, domestic producers to sell their wheat to the government. In March 2022, the government increased the purchase price of locally produced wheat to encourage local farmers to increase the amount of wheat they sell to the state. The Cabinet also announced that it would provide subsidies for fertilizers to encourage sales to the government. However, the government-set procurement price for domestic wheat remains a fraction of what farmers would get if they sold it to private sector buyers, a factor that has prevented uncontrollable price increases. , which also harms local producers.
The government-set procurement price for domestic wheat is a pittance compared to the price farmers would get if they sold it to the private sector.
The government also combined its incentives with stronger measures, including a wheat export ban and restrictions on interstate wheat trade and movement of goods. Egypt’s Ministry of Supply and Internal Trade has also introduced a policy requiring farmers to supply at least 60 percent of their crops to government buyers, allowing domestic producers to sell to more profitable private sector buyers. In some cases, this may put pressure on profits. The portion of wheat that farmers typically grow for family consumption. At least 41 farmers were arrested for violating a law that requires them to sell their wheat to the government rather than selling it on the open market or storing it for home consumption.
Egyptian women also face a disproportionate burden from the country’s wheat shortage, exacerbating the situation they already face. In addition to many household chores, Egyptian women living in rural areas are often required to work long hours in the fields and walk long distances to obtain food, water, and fuel. And because women’s labor is essential to purchasing and procuring food, women in rural Egypt are often forced to compensate for the government’s inability to meet food needs. Therefore, they are responsible for allocating resources and managing the domestic budget to produce enough food for their households.
Bread making continues in rural Egypt, but state-run bakeries emerged in the 20th century.th This century helped free urban women from this time-consuming domestic responsibility. Access to cheap, subsidized bread is one of the many factors that enable urban women to enter the labor force and earn additional income. However, wheat shortages in Egypt have historically led to long lines for bread at urban bakeries. This means that the current wheat crisis is forcing Egyptian women and girls to spend extra time procuring food for their families, and are likely to neglect their education and education. impair the ability to participate in the nation’s workforce;
Despite the major role of women and girls in both the production and acquisition of bread in Egypt, women and children continue to suffer from high rates of malnutrition and provide adequate nutrition to men and boys. People are often expected to eat less because of this. For example, one woman in Egypt’s supplementary food program relies on drinking water to stave off hunger, she said, instead saving food for her children. With a staple food as important as wheat currently in short supply, Egyptian women are bearing the brunt of the crisis and are more likely than ever to go hungry. This situation is particularly dire for breastfeeding mothers, as the availability of subsidized bread rich in iron and folic acid is critical to the health and nutrition of both mothers and infants. Therefore, the current crisis may have negative effects not only on the current generation but also on future generations.
social contract helps reduce inequality
In recent years, the Egyptian state has sought to reduce the cost of its subsidy program, reducing the size of bread eligible for subsidies. Meanwhile, some officials are proposing ways to make more efficient use of the vital commodity, such as preventing wheat from being used to make sweets in bakeries or to feed animals. Implementing these policies would increase the supply of subsidized bread, but eradicating underlying economic inequality will require reforms beyond domestic bakeries.
Egypt has drastically reduced fuel and electricity subsidies to meet the IMF’s requirements.
Despite more than two-thirds of Egypt’s population struggling to afford basic necessities, instead of tightening its subsidy system, the country has recently borrowed from the International Monetary Fund. Fuel and electricity subsidies have been significantly reduced to meet the mandated conditions. And it continues to pour huge amounts of money into infrastructure development, mainly in the form of mega-projects that provide little value to the people. Egypt’s central bank has also devalued several currencies in order to meet the IMF’s loan requirements, resulting in a sharp decline in the value of people’s savings, leading to an increase in inflation.
Although Sisi’s government has shown no signs of pausing megaprojects, continued reliance on the IMF to sustain infrastructure investment will only worsen the poor conditions in which most Egyptians live. Rather than allowing Sisi’s government to pump huge sums of money into the civilian and military economic sectors and demanding that funds allocated to food, energy and fuel subsidies be reduced, the IMF will focus on growth and increase government revenues. Reform should be promoted. But don’t hurt the poor. For example, in 2016, the government succeeded in reducing the public deficit by increasing the VAT rate, which exempts basic goods and services, to protect the country’s poor. Similar proposals to impose capital gains and exchange transaction taxes could also be a viable means of raising revenue so that the Egyptian state can better finance social welfare programs without straining the state budget. .
As one of Egypt’s closest allies, the United States should also take more aggressive action to pressure the Sisi regime to pursue reforms that allow Egypt to continue investing in social services. be. U.S. support for IMF loans to Egypt must be accompanied by the recognition that rapid subsidy elimination and privatization efforts such as the one Egypt is currently undertaking will cause great harm to the majority of Egyptians. Furthermore, the Biden administration’s support for these efforts is sure to undermine U.S. credibility in Egypt, which is already undermined by the U.S.’s tepid response to gross human rights abuses in Egypt. Meanwhile, if Sisi’s government continues to ignore its most vulnerable citizens, it will further undermine the state’s already shaky legitimacy. And if Egypt’s revolutionary past is any indication, the Egyptian people will not tolerate further deterioration of their social contract.
The views expressed in this publication are the authors’ own and do not necessarily reflect the position of the Arab Center Washington, DC, its staff, or board of directors.
Featured image credit: Shutterstock/Natalia Milko