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Ed Webb

Egypt increases food prices for second time in three months | Middle East Eye - 0 views

www.middleeasteye.net/...d-time-three-months-1814861743

Egypt economy prices food politics subsidies

shared by Ed Webb on 06 Feb 17 - No Cached
  • Egypt has increased the prices of subsidised sugar and cooking oil for the second time in three months, amid rising inflation and a struggling economy.The decision, announced last week, increased the price of subsidised sugar by 14.3 percent – from seven to eight Egyptian pounds a kilo (about 40 cents), and increased the price of subsidised oil by 20 percent, from 10 to 12 Egyptian pounds.Last November, Egypt suffered a sugar crisis that increased tensions in the country.Egypt imports about one million tonnes of sugar annually, but an acute shortage of dollars has cut the imports by private traders, leaving the market short as the government scrambles to fill the gap
  • the government supports about 70 of its 90 million people through more than 20 million ration cards that give recipients access to subsidised goods
  • annual urban consumer price inflation had jumped for the second month since the Egyptian pound was floated last year to reach 23.3 percent in December from 19.4 percent in November
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  • “There are many other alternatives, including tax dispute settlements with business owners, the settlement of tax evasion cases, as well as stopping the corruption in various state institutions, saving the resources of officials’ extravagance, and finding economic development alternatives in various economic sectors,”
Ed Webb

Egypt's Coming Revolt of the Poor | Foreign Policy - 1 views

foreignpolicy.com/...ypts-coming-revolt-of-the-poor

Egypt military economy military-industrial_complex Sisi poverty IMF riots food

shared by Ed Webb on 04 May 17 - No Cached
  • The bread riots are symptoms of a crisis tracing back to last November, when the International Monetary Fund approved a loan of $12 billion to Sisi’s regime. The loan agreement requires Egypt to fix its chronic budget deficit through substantial cuts in subsidies and other forms of public spending. The agreement also necessitates steps to encourage the private sector to boost job creation and growth.
  • the Egyptian army has used the agreement to punish the lower classes while maximizing its commercial gains. The military establishment, which fully controls the economic reform plan, has selectively implemented the loan’s conditions. While it enthusiastically reduces subsidies to impoverished civilians, it has expanded its domination of many economic sectors and reaped huge profits at the expense of the private sector.
  • generals in uniform manage monopolistic conglomerates of unaudited, untaxed enterprises, such as commercial farms, food packaging mills, construction companies, pharmaceutical plants, gas stations, fisheries, and cement and steel factories
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  • former officers occupy key government positions in charge of running the national economy
  • The IMF loan agreement failed to fully account for the military’s domination of the economy and the state bureaucracy
  • the military positioned itself as the savior of a crisis of its own creation and further squeezed its private sector competitors. Alexandria’s military governor pledged to end the sugar crisis, blaming it on greedy private merchants. Meanwhile, the Defense Ministry’s “al-Salam Company to Sell the Armed Forces’ Products” sold 3,000 tons of affordable sugar in poor neighborhoods of the city. Sugar eventually resurfaced on the market — after the military minister of supply doubled its price.
  • Although seeking to shrink the bureaucracy, the regime enhanced its ability to place loyalists in key positions. One article in the new legislation retained a rule from the Hosni Mubarak era by reserving the authority to appoint officials in leadership positions to the president. Sisi has energetically exploited these powers, placing an increasing number of fellow former officers in top civilian jobs in the government and the public sector as soon as they retire
  • In the past three years, Egypt’s president issued six decisions to raise military pensions by a total of 35 percent. Furthermore, the parliament supported a new fund to provide medical and social services to military judges
  • These cascading crises called for urgent poverty-alleviation efforts. The military stepped in with mega-construction projects that the government’s propaganda machine portrayed as designed to lift up the lower classes — social housing for inhabitants of slums and reclamation of new land for distribution to lower-class youths. Military contractors took charge of executing these over-ambitious projects, while the army’s Department of Morale Affairs made uplifting videos on their progress.
  • although the project was advertised as an initiative to support the rural poor, the reality on the ground was far different. Army soldiers confiscated the desert land of numerous farmers in Qina, a poor province in southern Egypt, which they had reclaimed and cultivated for decades. The army accused the farmers of encroachment on state property and evicted them in order to annex their land to the project. Qina’s governor, a former general, used heavy loaders to demolish farmers’ properties on 100,000 acres. Helpless civilian owners could only send complaints about the governor to Cairo’s General Authority for Agricultural Development Projects, then chaired by yet another fellow former general.
  • Cutting public expenditures on basic goods, for instance, didn’t stop the military from lavish spending on arms procurement. From France alone, it struck deals worth over $2 billion last March. The Defense Ministry didn’t pay for those arms from the accumulated revenue of its commercial activities, but rather took loans from French banks. The military usually insists that its lucrative commercial enterprises are aimed at securing its self-sufficiency in goods and weapons, but in this case the army didn’t pay for its large shipment from its own accounts. Rather, it asked the civilian Finance Ministry to guarantee the large loan and foot the bill if the army defaults
Ed Webb

Tunisia: The battle of Sidi Bouzid - Opinion - Al Jazeera English - 0 views

english.aljazeera.net/...20101227142811755739.html

Tunisia riots demonstration analysis

shared by Ed Webb on 28 Dec 10 - No Cached
  • The tacit contract that has defined the North African country since its independence in 1956 is the ‘bread’ provision - mostly subsidies - in return for political deference. With modest resources, Tunisia has historically funded subsidies of strategic commodities - bread, sugar, tea, coffee, kerosene - and education, health, housing in some cases, and even recreational activities, such as sport. The National Solidarity Fund and the National Employment Fund, still under centralised control, have had some successes. They have partly shifted the burden of providence from the state to society. Tunisians dug into their pockets to volunteer what little of their non-disposable income they have to the cause of poverty alleviation, and improvements of the so-called ‘shadow zones’ (bidon-villes), the misery belt suffocating the rich towns and suburbs. But even this system of quid pro quo bread and political deference has failed many Tunisians, leaving many hopeless and jobless.
  • The state is a control-freak to the point that it disallows the existence of any hint of an informal economy. There is one in Italy - even in America - but not in Tunisia. If the state is partly failing in its provision of jobs, then it is unwise to ban informal trade and work. A youth empowered by education but disempowered by marginalization can be the spark that ignites social upheaval and social tension. In Tunisia, marginalization is today being translated into irrational and tragic suicides.
  • the notion of ‘total state’ and ‘total politics’ may not be apt for successful social engineering and re-distribution. Total control can translate into loss of control.
Ed Webb

Toughing It Out in Cairo | by Yasmine El Rashidi | The New York Review of Books - 0 views

www.nybooks.com/...toughing-it-out-in-cairo

Egypt Sisi politics economy military intelligence surveillance rights revolution

shared by Ed Webb on 24 Mar 18 - No Cached
  • In search of my story, I got in my car and drove east in mid-May 2015 from Cairo to Suez. Nine months earlier, Sisi had announced the revival of a decades-old “mega-project” to expand the 150-year-old Suez Canal. He pledged that the project would be finished in exactly twelve months, and that every Egyptian would see “immediate returns.” I was skeptical about the promised date of completion and drove through the desert to see for myself. Celebratory billboards lined the route leading out of the city, as if the project was already complete. At the site of construction, I was told that the army had been working round the clock.The new canal was in fact inaugurated on August 6, 2015, twelve months to the day from when the project was first announced, and thousands of Egyptians took to the streets in celebration. Downtown Cairo was awash in flags and fireworks, music, flashing strobe-light shows, and animal-themed blow-up dolls as tall as townhouses whose only visible relationship to the canal might have been symbolic, in their exaggerated size. It brought back memories of the day in February 2011 when President Hosni Mubarak stepped down
  • The financing of the project under Sisi was shrewd—a tax-free public bond with certificates in denominations as low as ten Egyptian pounds (marketed to students), and a 12 percent interest rate with the option of quarterly payouts. The necessary $8 billion was raised in a week. People everywhere spoke of having put their savings into Suez Canal bonds. Lives felt quantifiably changed—I heard references to “free money.”
  • the illusion of safety
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  • human rights begin with the conditions under which we live. The revolution made life harder for us—us being the poor—so of course when they arrest these activists, I say it’s for the better, we can’t afford another revolution. We can hardly afford to eat each day
  • December, four months after the opening of the new canal, and, aside from those who had bought bonds and received the first payout, most people I heard began describing it as el-tira’a (a sewer). When I asked one woman, Sabah, a cook who juggles jobs in six homes each week, why her opinion of the canal had changed, she said: “They promised revenues and immediate returns, and now everyone says revenues are down. Where are the immediate returns? The project has failed.”
  • Sisi was no Nasser, but his nationalist credentials as a former army general lent him credibility. He also spoke the language of the street—his public speeches were matter-of-fact and colloquial
  • I kept tabs on the shrinking number of people who showed up to protest, and then on the decreasing number of protests. Only a handful of people still voiced their dissent, including Laila Soueif, the matriarch of a family of longtime activists, whose son Alaa Abdel Fattah is serving a five-year prison sentence on trumped-up charges; or the team behind the online paper Mada Masr, led by the journalist and editor Lina Attalah, who continued to publish despite scrutiny and censorship (the paper’s website was eventually blocked, along with 127 others). The risks of human rights work had become almost prohibitive, with arrests, disappearances, and travel bans all commonplace. I counted the number of activists, academics, and artists who had left the country, and friends who were emigrating. Regeni’s name often came up in conversations—his murder lingered in our minds
  • in April, the president declared that two Red Sea islands, Tiran and Sanafir, long perceived as Egypt’s, fell within the territorial waters of Saudi Arabia and would be transferred to the kingdom. Public attention shifted to this new declaration, which brought revolutionary and pro-government Egyptians together in opposition to it
  • muffled grumbles, but the answers to the others were invariably: “The government’s job is to keep us fed, and at least the country is safe again.”
  • More and more, on the streets of Cairo, in government offices, and in informal settlements on the outskirts of the city, I heard references to Syria: “We could have ended up like them.”
  • Passivity has been their particular mode of survival
  • Discontent surged in February over the shifting official accounts of what had happened to Giulio Regeni, an Italian graduate student who disappeared and was then found dead on a highway in Cairo, his body bearing marks of severe torture
  • A friend’s activist neighbor was dragged from his home in the night and disappeared for four days on allegations of being an “Islamist sympathizer” (he was not); a writer was imprisoned, on grounds of “offending public morals,” for sexually explicit scenes in a novel; gay men were being hunted by undercover police on the hookup app Grindr; a poet was jailed on charges of “blasphemy” and “contempt of religion” for calling the slaughter of sheep during a Muslim feast “the most horrible massacre committed by humans”; two women were threatened with jail for allegedly “kissing” in a car (they were not)
  • I, too, had slipped into some variation of the so-called inertia. A friend one evening described our often-dulled responses to news and events that once enraged us as a type of PTSD
  • As a result of severely dwindling currency reserves, the government was forced to implement a series of long-overdue austerity measures to secure a $12 billion loan from the IMF. The risks of implementing the loan program were described by the agency’s staff as “significant.” Morsi had considered these same measures but backed out after a public outcry. Sisi had little choice but to take the risk. First gas and fuel subsidies were suddenly lifted (causing price hikes of 50 percent), then the Egyptian pound was floated, plunging the currency from seven to twenty pounds against the dollar. Overnight, the price of milk, tomatoes, pasta, cigarettes, soap, water, sugar, oil, chicken, chocolate, bread, juice, toilet paper, matches, bananas, plumbing services, and household goods leapt
  • They want to make it impossible for us to be political
  • By August, I heard people everywhere talking about the price of school supplies. School bags seemed to be the measure of the state of things. What cost 90 pounds a year before cost 350 pounds now. Inflation was at its highest (33 percent) since 1986 (when it was 35.1 percent), and second-highest since 1958. When, over the months that followed, I asked my grocer or the man who delivered the bread or the garbage collectors how they were managing to keep afloat, the invariable answer was “baraka”—blessings from God.
  • “They say he is building a $10 million palace in the desert for himself when the rest of us can hardly eat, but what is the alternative? To be fair, he inherited a mess. At least he is a nationalist, one of us.”
  • “We would have descended into chaos had the Brotherhood stayed in power. The country would not have survived the remainder of Morsi’s term.”
  • There was a handful of people who knew what military rule would bring, who anticipated the crackdowns, the closing-in of the state. Some had forecast the outbursts of violence to come. But perhaps nobody quite anticipated that the deep state would be resurrected with such ferocity, and so unabashedly
  • When I asked a range of political figures about the surveillance, the answer I got was “paranoia”—to this day, no one fully understands the political and emotional causes that led to the revolution on January 25, 2011.
  • radicalism seems at once to undermine and to strengthen Sisi’s hold on power. The country feels more and more mired in such contradictions
  • “I admit,” a brass worker in Cairo’s old city told me one evening in November, “I’m not happy with how things have unfolded. This was never a revolution to begin with. It was all scripted from the start, by military intelligence, so what is one to do now except put your head down and try to make a living?”
Ed Webb

Under Sisi, firms owned by Egypt's military have flourished - 0 views

www.reuters.com/...egypt-economy-military

Egypt economy military KSA UAE Saudi US USA

shared by Ed Webb on 19 May 18 - Cached
  • Maadi is one of dozens of military-owned companies that have flourished since Abdel Fattah al-Sisi, a former armed forces chief, became president in 2014, a year after leading the military in ousting Islamist President Mohamed Mursi.
  • In interviews conducted over the course of a year, the chairmen of nine military-owned firms described how their businesses are expanding and discussed their plans for future growth. Figures from the Ministry of Military Production - one of three main bodies that oversee military firms - show that revenues at its firms are rising sharply. The ministry’s figures and the chairmen’s accounts give rare insight into the way the military is growing in economic influence.
  • Some Egyptian businessmen and foreign investors say they are unsettled by the military’s push into civilian activities and complain about tax and other advantages granted to military-owned firms
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  • In 2016, the military and other security institutions were given exemptions in a new value-added tax (VAT) law enacted as part of IMF-inspired reforms. The law states that the military does not have to pay VAT on goods, equipment, machinery, services and raw materials needed for the purposes of armament, defense and national security.The Ministry of Defense has the right to decide which goods and services qualify. Civilian businessmen complain that this can leave the system open to abuse. Receipts for a cup of coffee at private sector hotels, for example, add 14 percent VAT. Receipts at military hotels do not. Employees at the military-owned Al-Masah Hotel in Cairo told Reuters that no VAT was charged when renting venues for weddings and conferences.
  • The Ministry of Military Production is projecting that operating revenues from its 20 firms will reach 15 billion Egyptian pounds in 2018/2019, five times higher than in 2013/2014, according to a ministry chart. The ministry does not disclose what happens to the revenues. The chairmen of two of the firms said profits go to the ministry or are reinvested in the business.
  • “I don’t want to be a local shop. I want to be a company that has the capacity to export and compete internationally.”
  • The chairmen of two military engineering companies, Abu Zaabal Engineering Industries Co and Helwan Engineering Industries Co, said in recent years it had become much easier to access financing through the Ministry of Military Production.
  • Military companies receive an exemption from import tariffs under a 1986 law and from income taxes under a 2005 law. Cargoes sent to military companies do not have to be inspected.
  • The Ministry of Military Production signed a memorandum of understanding with China’s GCL Group last week to build a solar panel factory worth up to $2 billion. The military has taken over much of the construction of intercity roads from the Ministry of Transport and now controls the toll stations along most major highways.
  • Economists and investors say reforms tied to a $12 billion three-year IMF program signed in Nov. 2016 should lay the ground for economic expansion. But foreign investors are still shying away from Egypt, apart from those focusing on the more resilient energy sector. Non-oil foreign direct investment fell to about $3 billion in 2017 from $4.7 billion in 2016, according to Reuters calculations based on central bank statistics.  
  • foreign investors were reluctant to invest in sectors where the military is expanding or in one they might enter, worried that competing against the military with its special privileges could expose their investment to risk. If an investor had a business dispute with the military, the commercial officer said, there was no point in taking it to arbitration. “You just leave the country,” he said.
  • Egypt’s military, the biggest in the Arab world, has advantages.It enjoys financial support from Saudi Arabia and the United Arab Emirates, staunch supporters of Sisi since he toppled the group they see as a threat to the Middle East, the Muslim Brotherhood. Western powers see Cairo as a bulwark against Islamist militancy. Egypt receives $1.3 billion in military aid annually from the United States alone.
  • In 2015, the defense minister issued a decree exempting nearly 600 hotels, resorts and other properties owned by the military from real estate taxes
  • Among projects the Ministry of Military Production announced in 2017 was a plan to plant 20 million palm trees with an Emirati company and build a factory to make sugar from their dates. It agreed with a Saudi company to jointly manufacture elevators. The military inaugurated the Middle East’s biggest fish farm on the Nile Delta east of Alexandria.
  • At bustling Cairo squares, people line up to buy subsidized meat and other food handed out from trucks sponsored by the military. Sisi said he had instructed the military to enter the market “to supply more chicken to push down prices.”Some disagree with such measures on the grounds the military’s mission is to protect the country from external threats.“We have reached a point where they are competing even with street vendors,”
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