Egypt’s al-Sisi is confronting one of the toughest challenges he has faced since seizing power five years ago, as rising prices linked to economic austerity measures take a toll on his core middle-class supporters, according to the Washington Post
While the economy is growing and winning applause from Western donors, Sisi’s austerity program is squeezing a broad spectrum of Egyptians and fueling heightened criticism of his rule.
In recent weeks, cost-of-living increases have triggered public outrage. Steep subsidy cuts have driven up prices for fuel, cooking gas and electricity. The government also has introduced a new value-added tax and floated the currency, which has subsequently lost value. A hike in fees for using the metro sparked protests.
Thousands of Egyptians have taken to Twitter and other social media services demanding that Sisi step down, voicing their frustrations using the hashtag #Sisi-Leave.
Sisi acknowledged in recent televised speeches that the economic changes are tough on the population, even as he insisted that the country is on the right track.
In a June 30 address commemorating the anniversary of the military coup that led to his seizure of power, Al-Sisi said,”The path of real reform is difficult and cruel and causes a lot of suffering.””But there is no doubt that the suffering resulting from the lack of reform is much worse.”
In exchange for a $12 billion loan from the International Monetary Fund, Sisi agreed in 2016 to put in place austerity measures. These included reducing government subsidies for fuel and other products and services, as well as devaluing the Egyptian pound by more than half in November of that year.
Last week, the IMF praised Egypt’s efforts in a review, projecting that economic growth will reach 5.2 percent this year and 5.5 percent next year.
But that expansion is accompanied by a dramatic rise in prices at a time when poverty and unemployment remain high. For long-suffering Egyptians, such as Nancy Attia, inflation translates into daily frustrations and dreams deferred.
Attia postponed her wedding — not because of illness or last- minute jitters but due to rising prices. In Egypt, tradition dictates that a couple live together in their own home after marriage, but that arrangement has become increasingly unaffordable.
“Rent, furniture, electronic devices, everything has doubled in price or even more. Every little step that drove us closer to our beautiful dream became harder and harder,” said Attia, 33, an unemployed journalist. Marriage now seems out of reach. “We can’t even set a date,” she said.
Khalid el-Sherbiny said the sharp devaluation of the Egyptian pound has jolted the tourism company he runs. While a cheaper pound has made it less expensive for foreign tourists traveling to Egypt, much of his business depends on Egyptians who take vacations and honeymoons abroad, and he said many can no longer afford these trips.
At the same time, Sherbiny said he has faced rising prices for services and steeper taxes. To pay his employees, he was forced to trade in his new car for a used one.
“Things got worse and worse,”Sherbiny said. “I received emails from . . . several airlines telling us that they will increase the prices even more. The fuel surcharges on the flight tickets nearly doubled, which led to an insane increase in prices. People stopped traveling.”
Now Sherbiny says he is looking for a new start. He is planning to sell his company and move to Canada.
Egypt’s economy imploded after the 2011 Arab Spring revolts, which overthrew President Hosni Mubarak and paved the way for Egypt’s first democratically elected president, Mohamed Morsi.
In 2013, Sisi orchestrated a military coup against Morsi, prompting protests and a police crackdown. Investors and tourists stayed away. Sisi, elected president a year later, inherited an economic crisis.
Sisi, who was won a slide victory in March to a second term after his main opponents withdrew because of fear, intimidation and other reasons, has launched several large infrastructure projects, including new roads and electrical capacity. Critics say money spent on large investments, such as developing a new branch of the Suez Canal, could have been used to alleviate economic suffering.
Noura Galal, 26, is struggling to maintain her small clothing factory, which employs mostly women from poor families. In recent months, the price of her fabrics and other raw materials has soared. But she fears that raising her prices could cost her clients. She also would like to boost her employees’ salaries but does not know how she could afford to do so.
“As a small-business owner, prices increase every single quarter, and we cannot keep up,” Galal said.
Other small-business owners have shut down their operations. Omar Abu Zeid, 27, used to sell computer supplies and electronics. Each time he sold a product, he would have to restock by buying its replacement at a higher price. It was untenable.
“I decided to change my whole career and field and work for another company,”Abu Zeid said.
Some middle-class Egyptians said they were considering removing their children from private schools and home-schooling them to save money.
“This year things are harder and harder,” said a 35-year-old speech therapist and mother of two school-age children. “The [children] deserve a better life. That is why I am trying to change plans and think outside the box,” said the woman, who spoke on the condition of anonymity because her husband does not know her plans for homeschooling
In preparation for marriage, Attia took out a bank loan, she said, and began to shop for furniture. She had her eyes on a dining room set but balked when it doubled in price last year. The price of a carpet increased tenfold, so she scratched that off her list. She managed to buy a few items but soon stopped.
“We have dreamed of a small house,” Attia said. “But as time goes by and the prices go up, we give up on a part of this dream little by little.”
Any chance of buying more furniture or having enough rent money for their own place means working two or three jobs, she said. “We have postponed the marriage until further notice — until we can afford it.”