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‘Catastrophic’ it is!

Amnesty International said last week that Egypt is witnessing a “catastrophic” decline in human rights. Indeed, human rights conditions in Egypt are currently a disaster, but the “catastrophe” Egyptians are witnessing these days is all-encompassing. On Friday, the government announced an increase in fuel prices – a step every government has struggled to take and …


Rana Allam
Rana Allam

Amnesty International said last week that Egypt is witnessing a “catastrophic” decline in human rights. Indeed, human rights conditions in Egypt are currently a disaster, but the “catastrophe” Egyptians are witnessing these days is all-encompassing.

On Friday, the government announced an increase in fuel prices – a step every government has struggled to take and none could, for fear of public rage. Al Sisi’s government can, however – just as they can send hundreds of people to death without proper evidence, imprison journalists on bogus charges, and detain tens of thousands in a few months.

The problem with raising fuel prices in Egypt and cutting subsidies is, quite simply, that the government is targeting the poor with the increase without providing any alternatives. No one can argue that the increase isn’t needed, and fuel in Egypt is very cheap relative to any other country. But “any other country” also has proper public transportation; cars in Egypt are not a luxury, but a necessity. Anyone who has visited Egypt knows this very well; you cannot use public transportation if you want to keep your dignity and your sanity. Egyptians pay an average of 200% customs on cars they buy, and they accept that only because they have no choice!

How is this increase targeting the poor? Just a quick look on the percentages of increase tells all: a 78% increase in mainstream fuel used for transportation (people and goods) and only a 7% increase for Octane 95 used for high-end cars. Octane 92, used mostly by the middle class, increased 44%.

On top of that, a 64% increase in diesel fuel, used mostly in the processes of production (specially agriculture products) means that production, transportation and storage costs of food products will be greatly affected.

Add to that the 30% increase in electricity prices, and the 30 to 75% increase in natural gas for some industries like cement, iron and steel, and you will get price hikes like never before. These increases, when not coupled with measures to increase the citizens’ income, and with an over 13% unemployment rate and 25% poverty rate, are disastrous. Not only is there no increase in income, there is actually a decline, given that most employers are decreasing salaries, laying off people, or simply closing down. Put this altogether, and we don’t just have a problem on our hands – we have a crisis.

The Consumer Protection Agency said the increase in electricity and fuel prices will result in a 200% increase on all products, while some experts say that food in particular will increase by at least 20%. Yet following some logic unknown to the public, the prime minister said on Friday that “fuel prices will not affect food products”. How this is possible, however, he did not say.

Consider this: in May 2013, the UN World Food Programme (WFP) along with CAPMAS issued a report based on the CAPMAS 2011 Household Income and Expenditure and Consumption Survey (HIECS). The report stated that “an estimated 13.7 million Egyptians or 17% of the population suffered from food insecurity in 2011”and that “twice as many people moved into poverty as moved out, with less money to spend on food”. Imagine, then, what will happen now!

According to the economist DNE interviewed today, there exists a category just below the middle class that accounts for 20% of the population, and this price increase has impoverished members of this class while simultaneously dragging the middle class to just above the poverty line. Originally, Egypt’s poor represent 25% of the population, with the rich making up 10%, the middle class 45%, and those “just below the middle class making up the remaining 20%”. These percentages will now change, dragging millions to poverty, and millions more to just above it.

No measures are being taken to alleviate the financial status of the citizens, be they poor or middle class. In fact, many Egyptians would now move to the “poor” category, given the increase in their cost of living. Egypt has 25% poverty rate, but it’s worth noting that even this percentage does not include those holding permanent jobs, millions of whom have been struggling to receive a minimum wage of EGP1,200 for years now, without success. Meanwhile, as per 2013 numbers, a family needs a minimum income of EGP 1,620 to fulfill its basic needs. Are these not considered poor? And how much would they need now to simply buy food?

The cherry on top of all this is that the prices of electricity and water are increasing, yet the power outages and water outages are an everyday problem for almost all Egyptians… or at least for those who can’t afford to build solar panels and buy water generators for their villas.

Al-Sisi said in an interview before his election: “We cannot decrease subsides because the Egyptian citizen cannot afford it. We need to increase income by 50 to 100% before we can decrease subsidies.” Today it seems this has changed somehow!

Most of us, Egyptians, understand the need to cut subsidies but we also believe that the government should not deal with this in isolation of other measures. Social justice guarantees, opening the market and revisiting customs, restructuring of the economic system, end the corruption that costs us billions of pounds, and above all improve government services. Without giving the people any services in healthcare, education, security and a proper implementation of social justice, subsidies cuts are unacceptable.

For many Egyptians, the story is the same every day: wake up in the morning to find no water and no electricity, leave the house to get to work (if he is lucky to have a job to begin with), get into an undignified and completely chaotic transportation, get stuck in horrendous traffic, suffer from a 40% increase in his transportation cost, a 20% increase in the cost of food, a 30% increase in  his electricity and natural gas bills, get paid in peanuts –  and all this while risking death in a traffic accident (from which 20 people die every day).

If this man thinks about objecting in any manner, even a small sticker or joining a peaceful protest, he risks being arrested and tortured in detention facilities, or facing trail and getting a 15 year in prison sentence. Or maybe he would be charged with belonging to a terrorist group, get life in prison or a death sentence, depending on what happens on the day he protested.

With these kinds of everyday catastrophes becoming endemic, it’s no wonder we see strikes, protests and violence  in the news every morning!

 

Rana Allam is the Editor-in-Chief of the Daily News Egypt. Follow her on Twitter at @Run_Rana or email at r.allam@thedailynewsegypt.com

 

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  • Name me

    You lost my attention when you said cars are a necessity in Egypt. That you need them to keep your sanity! Are you joking??? Who would want to actually drive in Cairo? Are you sane to drive in Cairo? I come from the United States and I cannot even begin to tell you how superior the public transport is in Egypt. You can get to any tiny village of the country via various forms of public transport. The buses are far more comfortable than any bus you will find in the United States. Seats with plenty of legroom, and passengers that are courteous and hold bags for those who don’t find a seat. You won’t find that in other countries. Sure the metro is overcrowded, but look at Japan-it is worse. The microbuses may be a wild ride but the point is you can get anywhere you need to using them.

    I live in Cairo and I think that a car would be nothing but a waste of money and time and a cause of discomfort. I blame elite car drivers like you for a lot of our problems. The traffic is horrendous because so many of you rich people who buy cars because you can afford them and want to avoid rubbing elbows with the rest of the public will not lower yourselves to ride public transport-even though it reaches all the places you need to go-and you insist on driving cars and clogging the streets and polluting the air with them, both with fumes and noise. Not to mention the fact that the economy is depressed 3% because of the time lost stuck in Cairo’s traffic.

    Shame shame shame for you to suggest a car is at a necessity.

    • Khaled Basha

      Nice one ,she is writing from her a/c climate controlled elegant office, didn’t bother to calculate how could the prices be affected that much while cost of transportation equals a very low portion of the cost. 1 ton of beg. Transported 100 km (assume it will consume 50egp) that will cost 5 piasters / kg of veg ..I believe that even 50% increase will cost 3 PS more

  • sam enslow

    The poor do not have cars. Those that have cars can schedule their trips to use less petro.

  • BMH

    I am not really a specialist but I am a tax payer. For me I wouldn’t like to see my tax money spent on subsidizing everyone ( to me who ever owns a car and consumes more than 1000 watts a month is not really a poor). Instead I would like to see my tax money spent on increasing the productivity of the Egyptian individual. So maybe cutting the energy subsidy and spending a little more on education, creating a support system and infrastructure would do it.

    I do not think that subsidy should continue until we have a better transportation system. End of the day money has to come in from one source or the other ( increasing taxes or cutting cost), so may be some of the subsidy money should go to fund a better transportation system.

    I believe that subsidy and other old laws ( like rent control law, labor law) has made us the Egyptians unproductive and even unreasonable in how we use depleting resources like energy ( why economize on something that is dirt cheap?). Rent control law made so many people immobile. Coupled with cheap energy it made it economical to live in an inherited flat under rent control law in hiliopolis and drive all the way to work every day to 6th of October.

    As for cement and steel prices, they will keep on goin up whether the government remove the subsidy or not on energy. The reason is that these two industries are still some how protected industries. Local prices for these commodities are much higher than the international prices and that’s why these industries do not export. On the other hand the government protect them by putting Hightower customer on imports. I believe that this would need to change going forward if the government is really serious about an economic reform.

    I totally agree with you that the customer are really high on vehicles and also the annual licensing which has increased dramatically as far as iremember some time in 2008. At that time it was justified that this is to compensate the cheap energy. Guess if we will buy the energy at it’s fair value now, these two additional taxes should be out of our system.

    I totally agree with you that so many other things should change like getting rid of corruption and improving government services. I would also like to see less government employees ( now 7 million), more people paying taxes ( not just the same people paying higher tax rates), and some of the informal economy gradually becoming formal. But I do not believe that we should wait until we see all that happen before the restructuring of the subsidy system. If private cars makes us more dignified and sane, it’s probably worth paying for that!

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  • crescent5

    yep- the author seems a bit out of touch here. Most cars where I live are put together from used car parts- forget the “import tax” and even so they are a luxury- we can’t afford the “dignity” and “sanity” of not riding the public transportation system.

  • Anonymous

    Why don’t you read the rest of the article and leave the one line about the cars? The author discusses poverty and food prices and the struggle of egyptians everyday.

    • BMH

      Not really sure what the author wants to say.
      If she sees that lifting the subsidy is a bad thing?
      Or that the rich should pay more for than the poor when they buy energy.
      Or that Egyptians are struggeling, or may be the decline of human rights as they can’t protest against the governement action of jacking up the petrol prices.
      Or is hse offering a solution for the economic reform.
      May be all the above?!.

    • sam enslow

      It will get worse. There is no money. I hope the new smart cards will help the poor get by. But broke is broke. I hope Egypt is able to avoid the conditions faced by the people of the USSR collapsed. Egypt can no longer play let’s pretend. If it is to get out of this current t mess, it must start producing goods and services someone wants to buy. Government employees moving papers from one pile to another produce nothing but cost a lot.Egyptians face hard times, but hard, productive work, fighting corruption’ and allowing advancement on the basis of merit will start the journey to a better life. It is important that working people see financial rewards for their efforts. When the people prosper, Egypt will prosper. Egypt has it all, but poor management has wasted many opportunities.

    • Name me

      Get a life! She lost my attention and I made my comment. It doesn’t mean I didn’t read the rest of the article afterward.

  • Al Masry

    Amourah Rana: Thanks for insight and brilliant argument. even that it is wrong. The court threat of death sentence is intended to help prosecutors to get people talk and identify the hardcore criminals. As long as there is a Safety Net and unemployment compensation, Egypt will spring out of the Dark Age to modernity. The media should educate Egyptians about the benefits of those acts i.e. better environment, less smog, preservation of our natural resources, people get healthier by walking, we need to address human bomb explosion in Egypt. It is the root cause of all our problems.

    • sam enslow

      You are right about population. It makes progress almost impossible. Look at the subsidy problem, andthat will give you an idea of the reaction to family planning. I know young people who cannot fInd works whose mothers are always telling them to marry, ‘ ..because I want grand babies.’ Then there are the men who believe having babies shows they are strong, even if the cannot feed them or buy papers for them. As the saying goes,’ Any male can make a baby. It takes a man to be a father.’

  • Al Masry

    Why we bread like rabbits? Because of ignorance and antiquated Family Law. Egyptian, simple women intend to have more children to secure their future life, i.e. tie the man down. As you know a man can divorce his wife and she will be helpless in streets. Solution: Anyone who receives welfare should register in a Family Planning program that include birth control option. As a fact, women want birth control to protect their health and have less children deep in their hearts. Population explosion is against Islamic teaching sand merits.

  • Jamela Radwan

    It would appear that the editor’s overwhelming need to slam any reforms instituted by Sisi has not been well thought out, it was a knee jerk reaction.

    The army is going to fill the transition period by providing discounted food and transportation.

    This is critical, just as this editor decided to opt for hyperbole instead of waiting for the facts, it will take time for those business sectors affected to digest the true costs. At every opportunity the market has responded with gouging for the past 3 years, it has become a way of life. Knee jerk reactions rule. The bottom line, and Sisi has been clear we are going to have to take less profit as businesses for the next 2 years.

    The micros bus industry, and the taxis have a choice, either take less profit or be eased out of business. Transportation costs for food products are distributed for literally 10,000s of items – you don’t fill up a truck and transport 100 tomatoes.

    This country is at critical mass, a tipping point that has been decades in the making, and exacerbated by the incompetence of the Muslim Brotherhood for a year and an additional year of transition.

    Time has been wasted, time we don’t have. Nobody likes the idea of prices rising, it is the price we are paying for decades of neglect and denial.

    • Truth..

      Well said!!
      People must begin to understand! It’s time to wake up from this nightmare, by accepting the reality!
      Sisi understands Whats must be done.
      Thank God for him, and God bless those who voted for him!!

  • Al Masry

    Amourah Rana Allam: With your vision and advocacy of Human Rights; I suggest to initiate a national, grass-root campaign about Population Explosion. It is touring apart our social fabric and destroying our limited resources. It is against religions intended to value human life. You will be amazed of how many religious/social leaders will act with you. It is as veiled act against women welfare and health. DO IT! (I saw how in Brazil they shoot Street Children resulting from over population and rigid religious believes.)

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