Egyptians buy bread from a bakery in Cairo, Egypt.
Egyptians buy bread from a bakery in Cairo, Egypt.
Egyptians buy bread from a bakery in Cairo, Egypt.
Egyptians buy bread from a bakery in Cairo, Egypt.

Why ending Egypt's bread subsidies holds great significance


Hamza Hendawi
  • English
  • Arabic

In Egypt, bread is called “eish" in Arabic, meaning life.

The name reflects the significance that the staple holds in every meal of the nation's poor majority. Egypt is the world’s biggest consumer of bread and the largest importer of wheat.

It is little wonder, then, that the nation of 100 million felt a shudder go down its spine when President Abdel Fattah El Sisi talked about raising bread prices.

Maintaining low prices through costly subsidies has been a pillar of socio-economic policies adopted by successive governments over the past half century.

So much so that the inexpensive flat bread loaf called “eish balady” is widely thought to have played a significant role in seeing the nation through trying times.

“Keeping bread affordable to the poor has for 60 years been something of an informal social contract between citizens and the political authority,” sociologist and author Ammar Ali Hassan said.

“The symbolism associated with the loaf of bread goes well beyond it being just a consumer item. In reality, it defines the bond between people and the state.”

Mr El Sisi’s government spends 87.5 billion pounds ($5.57bn) subsidising food items for the 66.7 million Egyptians covered by state-issued ration cards.

Half of that money goes into bread subsidies, with each person entitled to five loaves at 0.05 pound apiece a day.

Meeting demand for bread has meant that Egypt is annually topping up its wheat production of 9 million tonnes with about 12 million tonnes it imports.

The nation consumes between 150 and 180 kilograms of bread per capita, well above the global average of 70 to 80 kilograms.

A bakery worker delivers bread in Cairo, Egypt's capital. EPA
A bakery worker delivers bread in Cairo, Egypt's capital. EPA

Egyptian officials have for years complained that bread subsidies burdened the national budget, denied successive governments scarce funds to overhaul the economy and encouraged waste and abuse.

An attempt to raise the price of bread in 1977 by president Anwar Sadat sparked days of deadly riots across much of Egypt, leading him to order the army to patrol the streets of Cairo and other major cities.

Successive governments have since used other methods to try to reduce the subsidies bill, such as reducing the size of the loaf, curtailing its production or suspending ration cards if their holders were found to be making enough money.

Mr El Sisi, in office since 2014, has been the architect and driving force behind an ambitious and far-reaching economic reform programme.

His government has zealously lifted subsidies on a wide range of goods and services, including fuel, electricity and drinking water.

It also introduced taxes including value-added and property tax, along with higher charges for items such as phone connections, passports and driving licences.

While the reforms won accolades from bilateral donors and international financial agencies, they added significantly to the hardships faced by most Egyptians.

This was despite government efforts to cushion the poorest from what amounted to the steepest rise of prices in living memory.

The reforms, as far-reaching as they were, did not touch bread, a reflection of the political sensitivity associated with the item.

Protests against the price rises led to some protests, but they were small and swiftly dealt with.

“Some might say, ‘Leave this to the prime minister or the minister of supplies',” Mr El Sisi said of his plans to raise the price of bread. “But no, this one is on me.”

Mr El Sisi refrained from specifying the extent of the increase under consideration. He only reassured Egyptians that the rise would not be steep.

His Cabinet, meanwhile, is reviewing the issue and will make recommendations to him on how to proceed, pro-government media reports say.

Commentators still voiced their concerns.

Workers drive past a billboard bearing an image of Egyptian President Abdel Fattah El Sisi. Reuters.
Workers drive past a billboard bearing an image of Egyptian President Abdel Fattah El Sisi. Reuters.

One such commentator, Ashraf El Barbary, said the assertion that raising bread prices would ease the financial difficulties contrasted with the huge state spending on mega projects.

Mr El Barbary also questioned the argument that money saved from reducing bread subsidies would be used to fund meals for school children.

“Will those school meals compensate for what the pupils eat for the rest of the day, after the number of bread loaves their families are able to buy shrink due to higher prices?” he asked in an unusually outspoken column published at the weekend in Cairo’s daily El Masry El Youm.

“The real problem in Egypt is not raising the price of subsidised bread or even lifting bread subsidies altogether, but it’s rather the government’s vision, which often only sees collecting tax and reducing the services it offers to citizens."

Mr El Barbary’s viewpoint is borne out by some of the widespread eating habits long embraced by the country’s poor majority.

These include stuffing bread with cheap pasta or fried potatoes, which is designed to fill stomachs. Some even eat two or three loaves with just two small pieces of falafel or some cheese.

But the policy of reducing subsidies also has its supporters.

“My words are in the public’s interest and I am prepared to endure all the abuse I will get because … there is a need for reviewing subsidies on all goods,” said Hussein Abu Saddam, the pro-government head of the farmers’ union.

“The time for temporary solutions is up. The Egyptian body needs to be remedied.”

High profile Al Shabab attacks
  • 2010: A restaurant attack in Kampala Uganda kills 74 people watching a Fifa World Cup final football match.
  • 2013: The Westgate shopping mall attack, 62 civilians, five Kenyan soldiers and four gunmen are killed.
  • 2014: A series of bombings and shootings across Kenya sees scores of civilians killed.
  • 2015: Four gunmen attack Garissa University College in northeastern Kenya and take over 700 students hostage, killing those who identified as Christian; 148 die and 79 more are injured.
  • 2016: An attack on a Kenyan military base in El Adde Somalia kills 180 soldiers.
  • 2017: A suicide truck bombing outside the Safari Hotel in Mogadishu kills 587 people and destroys several city blocks, making it the deadliest attack by the group and the worst in Somalia’s history.
What can victims do?

Always use only regulated platforms

Stop all transactions and communication on suspicion

Save all evidence (screenshots, chat logs, transaction IDs)

Report to local authorities

Warn others to prevent further harm

Courtesy: Crystal Intelligence

Benefits of first-time home buyers' scheme
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  • Mortgages with better interest rates, faster approval times and reduced fees
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In numbers

Number of Chinese tourists coming to UAE in 2017 was... 1.3m

Alibaba’s new ‘Tech Town’  in Dubai is worth... $600m

China’s investment in the MIddle East in 2016 was... $29.5bn

The world’s most valuable start-up in 2018, TikTok, is valued at... $75bn

Boost to the UAE economy of 5G connectivity will be... $269bn 

PROFILE BOX

Company name: Overwrite.ai

Founder: Ayman Alashkar

Started: Established in 2020

Based: Dubai International Financial Centre, Dubai

Sector: PropTech

Initial investment: Self-funded by founder

Funding stage: Seed funding, in talks with angel investors

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BIGGEST CYBER SECURITY INCIDENTS IN RECENT TIMES

SolarWinds supply chain attack: Came to light in December 2020 but had taken root for several months, compromising major tech companies, governments and its entities

Microsoft Exchange server exploitation: March 2021; attackers used a vulnerability to steal emails

Kaseya attack: July 2021; ransomware hit perpetrated REvil, resulting in severe downtime for more than 1,000 companies

Log4j breach: December 2021; attackers exploited the Java-written code to inflitrate businesses and governments

Global state-owned investor ranking by size

1.

United States

2.

China

3.

UAE

4.

Japan

5

Norway

6.

Canada

7.

Singapore

8.

Australia

9.

Saudi Arabia

10.

South Korea

The specs

Engine: 2.0-litre 4-cylinder turbo

Power: 240hp at 5,500rpm

Torque: 390Nm at 3,000rpm

Transmission: eight-speed auto

Price: from Dh122,745

On sale: now

The specs: 2019 GMC Yukon Denali

Price, base: Dh306,500
Engine: 6.2-litre V8
Transmission: 10-speed automatic
Power: 420hp @ 5,600rpm
Torque: 621Nm @ 4,100rpm​​​​​​​
​​​​​​​Fuel economy, combined: 12.9L / 100km

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Essentials

The flights

Emirates and Etihad fly direct from the UAE to Geneva from Dh2,845 return, including taxes. The flight takes 6 hours. 

The package

Clinique La Prairie offers a variety of programmes. A six-night Master Detox costs from 14,900 Swiss francs (Dh57,655), including all food, accommodation and a set schedule of medical consultations and spa treatments.

THE SPECS

Engine: 3.9-litre twin-turbo V8

Transmission: seven-speed dual clutch

Power: 710bhp

Torque: 770Nm

Speed: 0-100km/h 2.9 seconds

Top Speed: 340km/h

Price: Dh1,000,885

On sale: now

Key facilities
  • Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
  • Premier League-standard football pitch
  • 400m Olympic running track
  • NBA-spec basketball court with auditorium
  • 600-seat auditorium
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  • AR and VR-enabled learning centres
  • Disruption Lab and Research Centre for developing entrepreneurial skills
MATCH INFO

Karnataka Tuskers 110-5 (10 ovs)

Tharanga 48, Shafiq 34, Rampaul 2-16

Delhi Bulls 91-8 (10 ovs)

Mathews 31, Rimmington 3-28

Karnataka Tuskers win by 19 runs

If you go:
The flights: Etihad, Emirates, British Airways and Virgin all fly from the UAE to London from Dh2,700 return, including taxes
The tours: The Tour for Muggles usually runs several times a day, lasts about two-and-a-half hours and costs £14 (Dh67)
Harry Potter and the Cursed Child is on now at the Palace Theatre. Tickets need booking significantly in advance
Entrance to the Harry Potter exhibition at the House of MinaLima is free
The hotel: The grand, 1909-built Strand Palace Hotel is in a handy location near the Theatre District and several of the key Harry Potter filming and inspiration sites. The family rooms are spacious, with sofa beds that can accommodate children, and wooden shutters that keep out the light at night. Rooms cost from £170 (Dh808).

Company%20Profile
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UAE currency: the story behind the money in your pockets
Company%20profile
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The specs
  • Engine: 3.9-litre twin-turbo V8
  • Power: 640hp
  • Torque: 760nm
  • On sale: 2026
  • Price: Not announced yet

 

 

UAE currency: the story behind the money in your pockets
GAC GS8 Specs

Engine: 2.0-litre 4cyl turbo

Power: 248hp at 5,200rpm

Torque: 400Nm at 1,750-4,000rpm

Transmission: 8-speed auto

Fuel consumption: 9.1L/100km

On sale: Now

Price: From Dh149,900

Tearful appearance

Chancellor Rachel Reeves set markets on edge as she appeared visibly distraught in parliament on Wednesday. 

Legislative setbacks for the government have blown a new hole in the budgetary calculations at a time when the deficit is stubbornly large and the economy is struggling to grow. 

She appeared with Keir Starmer on Thursday and the pair embraced, but he had failed to give her his backing as she cried a day earlier.

A spokesman said her upset demeanour was due to a personal matter.

W.
Wael Kfoury
(Rotana)

Sole survivors
  • Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
  • George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
  • Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
  • Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
The biog

Favourite books: 'Ruth Bader Ginsburg: A Life' by Jane D. Mathews and ‘The Moment of Lift’ by Melinda Gates

Favourite travel destination: Greece, a blend of ancient history and captivating nature. It always has given me a sense of joy, endless possibilities, positive energy and wonderful people that make you feel at home.

Favourite pastime: travelling and experiencing different cultures across the globe.

Favourite quote: “In the future, there will be no female leaders. There will just be leaders” - Sheryl Sandberg, COO of Facebook.

Favourite Movie: Mona Lisa Smile 

Favourite Author: Kahlil Gibran

Favourite Artist: Meryl Streep

Sukuk explained

Sukuk are Sharia-compliant financial certificates issued by governments, corporates and other entities. While as an asset class they resemble conventional bonds, there are some significant differences. As interest is prohibited under Sharia, sukuk must contain an underlying transaction, for example a leaseback agreement, and the income that is paid to investors is generated by the underlying asset. Investors must also be prepared to share in both the profits and losses of an enterprise. Nevertheless, sukuk are similar to conventional bonds in that they provide regular payments, and are considered less risky than equities. Most investors would not buy sukuk directly due to high minimum subscriptions, but invest via funds.

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Updated: August 13, 2021, 5:43 AM`