It turns out that Egyptian President Abdel-Fattah al-Sissi recently tried to mount a barricade that proved too high for him. He dropped the bombshell in remarks to the guests at the dedication of a Silo Foods food production complex near Cairo.
“The time has come to examine the price of bread in Egypt,” the president said. “It’s inconceivable that for 20 pitas, people pay the price of a single cigarette.”
The hint was clear and stinging. Over the course of more than 44 years, three presidents, a peace agreement with Israel, the Arab Spring and dramatic global events, the price of a pita in Egypt has remained unchanged – five ersh, or less than half a cent.
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The subsidy on pita may be one of the few remaining government subventions since Sissi launched a courageous campaign of economic reforms that included a major reduction in subsidies for gasoline, electricity and various foods. But bread was always the glaring red line.
When then-President Anwar Sadat tried to raise the price of bread in 1977, hundreds of thousands of people joined stormy demonstrations that ended with more than 70 killed and hundreds wounded. Sadat was forced to repeal his decision, and none of his successors had ever dared touch the dangerous issue.
Sissi’s desire to abolish the subsidy is understandable. Egypt spends some $2.9 billion a year, around 1.8 percent of total expenditures, to subsidize bread. The International Monetary Fund, which gave Egypt a $12 billion loan in 2016, attached various conditions to it, one of which was canceling the subsidies.
To circumvent this landmine, the government decided last year that instead of canceling the bread subsidy, it would cut the size of pita from 130 grams to 110. Today, after another cut, pita weighs 90 grams (about 3 ounces).
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On the day that Sissi ordered his trade and economy ministries to draft new regulations on a new price for bread, a storm erupted – not in the streets, but in the tried-and-true venue of social media. One Twitter account that has attracted thousands of followers is even called “Except a loaf of bread.” Its users haven’t spared the government and the president their scathing criticism.
Another Twitter account called “The bread intifada” detailed the government’s spending on Sissi’s grandiose construction projects: "350 billion Egyptian pounds [$22 billion] for New Cairo, 350 billion Egyptian pounds for the El Alamein train line and one floor of the presidential palace costs $2 billion,” it read. “And after all that, they want to raise the price of bread.”
“What do we need huge projects like this for?” a rickshaw driver asked in an interview with Al-Hayat television that went viral. “We have nothing to eat, failed education and antiquated medicine. What will these projects give us?”
“Soon, we’ll be eating each other,” someone else commented. “And the president doesn’t care about anything.”
Sissi tried to explain that cutting the subsidies is necessary for the government to meet its commitment to fund additional meals for some 13 million schoolchildren. The meal is just a dry cookie or one filled with date jam, but for many children it’s their only meal of the day. “Where will we get the money for these meals?” Sissi asked rhetorically.
That’s an interesting question, because the food factory complex that he inaugurated last week is due to produce millions of these meals “according to the highest international standards and regulations.”
But Silo Foods isn’t part of the private sector. It’s another huge economic project of the Egyptian military and is expected to earn the army at least 8 billion Egyptian pounds a year in addition to revenue from sales on the free market. And there is no parliamentary, public or legal oversight of the revenue that the army earns from its civilian enterprises.
If the bread subsidy is canceled, the price of the meal will rise accordingly. And parents will pay this extra cost into the state’s coffers – via the military-owned production plant. Egyptians are already very familiar with this routine.
The reactions on social media haven’t been music to Sissi’s ears. According to Egyptian media, the president convened an urgent meeting with the heads of the security and intelligence services, who warned him that the public outcry could spark violent clashes.
Therefore, like his predecessors, Sissi announced over the weekend that he has suspended the plan in order “to reconsider its effects.”
This isn’t the first time that Sissi has backtracked on decisions that would have boosted state revenues by harming the country's population. A year and a half ago, a law that established rules for settling cases of illegal construction came into effect. The draconian legislation imposes heavy fines on anyone who builds without a permit and obligates the offending residents or owners to pay compensation for such violations.
That was also a courageous move by Sissi, an attempt to solve a serious problem that has plagued Egypt for decades. The law gave the army the power to oversee implementation and allowed violators of the law to be tried in military court.
But the public outcry, coupled with a ponderous bureaucracy that couldn’t handle the job, recently caused the cabinet and parliament to “reconsider” the law’s provisions and find a solution. The prevailing view is that this reexamination will result in major changes to the law.
Sissi has discovered that it’s easier to build a new city or widen the Suez Canal than it is to tinker with the outmoded system that has been keeping most Egyptians’ heads just above water.