A few months ago, Egyptian President Abdel Fattah Al-Sisi shouted to the people of the country through a televised speech at the inauguration of a large food industrial park in the country: it is imperative to raise the price of big cakes.
You know, Egyptian flatbread has been priced constant for decades. The last time a price increase was solemnly announced was in 1977. During this period, Egypt has changed its presidents, signed a peace treaty with Israel, experienced the storm of the "Arab Spring"... Society is in a state of flux, but the price of flatbread has miraculously remained the same.
"Nothing can stay the same for decades." Sisi complains that it's incredible that a cigarette can now cost 20 flatbread.
A stone stirred up thousands of waves, and the voices of popular opposition rose up. Under pressure, Sisi had to change his mouth to "suspend" the price increase plan in order to "reconsider the impact".
Reporter | Xu Supei (from Cairo)
This article is reprinted from The Globe Issue 1, published on January 12, 2022, titled "Egypt: A Controversy Over a Big Pie."
1 "The bond between man and the state"
It seems strange that the president of a country shouted that the price of the pie would increase: Is there nothing more important than the pie and more worrying for Sisi? Of course. However, the flatbread is really important for Egypt and the entire Middle East.
The Middle East is made up of many different countries, ethnicities and religions and is a common home for Muslims, Jews and Christians. Despite cultural and religious differences, there are striking commonalities or intersections in diet, and the flatbread is one of them.
Pie is an important staple food for the people of the Middle East, and because of this, the "Big Cake Revolution" has become the most vivid summary of the demonstrations that have risen and fallen in many countries in the region for many years, demanding better quality of life.
On April 3, 2017, in Cairo, Egypt, an employee of a large bakery carries a flatbread. Xinhua News Agency/Ouxin
In the Egyptian dialect, the eish is synonymous with "life." Take a walk through the streets of Cairo and you'll discover how important the pie is to the Egyptian people.
When they go out in the morning, egyptians of all stripes carry bags of pies in their hands, like French people walking the streets with a bag of bag of bag sticks. Even if the pie on the tray above his head is stacked into a hill, the workers of the alley cake shop can stride steadily to the various restaurants to deliver the goods. In the restaurant, the waiter will deliver freshly baked flatbread before serving. Freshly baked flatbread is fragrant and tough, and is served with a variety of dips and grilled meats.
On April 21, 2014, in Cairo, Egypt, people share festive foods – salted fish and flatbread – in a church. On that day, it is the traditional Egyptian festival "Smelling the Wind Festival", also known as the "Spring Festival", and the people have customs such as going out to collect wind, eat dinner, and eat salted fish. Xinhua News Agency reporter Pan Chaoyue took the photo
Egypt has long provided low-cost welfare cakes to the people to ensure their basic livelihood. The general price of the marketable flatbread is about 1 Egyptian pound (about 0.4 yuan), while the government-subsidized welfare flatbread is only 0.05 Egyptian pounds.
On the one hand, the subsidy model is simple and easy to operate, and the public recognition is high. On the other hand, academics criticize the subsidy model as expensive and inefficient, and prone to waste.
Bill Sadiki, a non-resident researcher at the Doha Research Center of the Brookings Institution in the United States, commented that the subsidy model is a modern version of the "bread and circus" of the Roman Empire that distracts the people's attention by meeting their superficial needs: the government subsidizes the basic necessities of the people to meet their basic needs, thereby maintaining the stability of the regime. Sadiki believes that subsidies are one of the important pillars of so-called "pie democracy".
And what Sisi is shouting about raising prices is precisely this 0.05 Egyptian pound welfare pie that many economists have criticized. In Egypt, more than 65 million people can currently buy 5 welfare pies at a low price every day.
The last time Egypt solemnly announced a rise in the price of welfare pies was 44 years ago. In 1977, the then Sadat government, in exchange for an International Monetary Fund loan, agreed to its reform requirements and announced the abolition of basic food subsidies, including flatbread subsidies.
Sadat's move was not exchanged for loans, but in exchange for riots in many cities in the country, hundreds of thousands of people marched and demonstrated, and people shouted slogans such as "Where is our breakfast" and "Egyptians are starving" to express their fiercest opposition to the government's cancellation of subsidies.
When the unrest subsided, more than 1,000 people were arrested, more than 550 injured and more than 70 killed. The Egyptian government terminated its loan program with the IMF and food subsidies returned. The price increase of the flatbread will not be solved.
Subsequent presidents have easily dared not touch the sensitive and dangerous issue of the pie subsidy, so that in today's soaring prices, the welfare pie can still maintain a historical price that Sisi complained about as "incredible".
"Making the pie affordable for the poor has been an informal social contract between citizens and governments for decades." Egyptian political scientist Amar Hari Hassan argues that the symbolism of the pie is much more than just a consumer product, "in fact, it defines the bond between man and the state." ”
Therefore, the price of flatbread increases, first of all, it is difficult to enjoy subsidies in large cakes and maintain low prices, which has become the "common sense" cognition of generations of Egyptians: flatbread should and must be so cheap, and continue to be cheap. This also led to Sisi's attitude towards the price increase of the pie so entangled, "wanting to touch but retracting his hand".
The other side of the problem is that Egypt's poverty problem is serious, and the welfare pie does play a "charcoal in the snow" function for many Egyptians. According to data released by Egypt's Central Public Mobilization and Statistics Agency (CAPMAS), the poverty rate in Egypt reached 29.7% in fiscal 2019-2020. Almost 3 out of 10 Egyptians live below the poverty line, which is the lowest poverty rate in Egypt in 20 years.
People shop for vegetables at a Saturday market in Ayat, Giza Province, Egypt, on June 6, 2020
2 This pie "must be moved"
Since the price increase of the big cake is so dangerous that it may even trigger social unrest, why not continue to shelve this issue?
"Some people might say, leave the [price increase] matter to the Prime Minister or the Minister of Supply." No, I will take up this responsibility myself before my country, my people. Sisi said sadly in his speech.
It has to be said that the food industrial park in Sisi Ribbon Cutting is located in sadat city in Menufia province. The city was named in honor of former President Sadat. Sisi chose to announce the price increase of the pie here, I don't know if it is a coincidence of history, nor do I know if his heart will ripple a little bit of the heroism of inheriting the unfinished business of his predecessors, where he fell and where he got up.
The official reason for the increase in the price of welfare pies is that the Egyptian government needs to fund nutritious meal programs for students.
Sisi said the government is working to provide better nutritious meals for Egyptian students, and given that the cost of each meal is 5 to 7 Egyptian pounds, the project will cost 77 billion Egyptian pounds per year, and in order to subsidize this project, "welfare pie will have to increase in price".
Even if it is not to subsidize nutritious meals, Sisi's desire to increase the price of the pie is understandable. In the fiscal year ending June 2021, flatbread subsidies amounted to nearly 45 billion Egyptian pounds (us$2.9 billion), more than half of the total food subsidies and equivalent to 1.8 percent of total state spending.
On March 9, 2017, at a bakery in Cairo, Egypt, a little girl checks a baked flatbread. Xinhua News Agency/Reuters
In addition to internal factors, namely the allocation and pulling of the limited government budget among various issues, the international community's demand for economic reform in Egypt has become the main external pressure on the welfare pie price increase.
In 2016, Egypt re-struck a deal with the IMF to implement a three-year economic reform program in exchange for a $12 billion loan. Among them, reducing various subsidies to benefit only the people who need it most in Egypt is one of Egypt's commitments to the reform of the IMF.
Due to the lessons of the 1977 "Big Pie Riots", Egypt has long had a certain "avoidance" attitude towards cooperation with the IMF. At the beginning of his tenure, Sisi was determined to rely on his own development advantages, self-reliance and initiative to lead Egypt out of the development dilemma after the upheavals in the Middle East in 2011.
But a sudden air crash dashed Egypt's hopes of recovering from years of turmoil without foreign aid.
On October 31, 2015, an Aeroflot plane crashed on Egypt's Sinai Peninsula, killing all 224 people on board. After the crash, Russia suspended its route to and from Egypt. In the same year, after a comprehensive assessment, the OECD considered Egypt to be a security threat and a high-risk country that was "not conducive to foreign investment".
"The crash shattered Egypt's hopes of using tourism as a locomotive for economic recovery." Jamal Zahran, a professor of political science at the Suez Canal University, said the Aeroflot crash forced Sisi to turn back to the IMF for help.
For three years, starting in 2016, Egypt kept its reform promise to gradually reduce subsidies for fuel, electricity, gas and food. A sharp reduction in subsidies has been successful in reducing government spending, leading to improvements in Egypt's macroeconomic indicators. At the same time, however, the cost of reform is passed on to the poor and the middle class, and rising prices are increasing, increasing the burden on people.
On the same day that Sisi delivered his "Pie Price Increase Speech," a new storm of protests was triggered. Sisi's price increase plan was denounced by netizens on Egyptian social media, the Arabic label "#除了我们的大饼" went viral on Twitter, and a video of Sisi vowing in a television interview a few years ago that he would not raise the price of the welfare pie was also re-dug up and widely circulated online.
The storm of protests on the Internet led to an emergency halt to price increases and the government began to re-examine policies to reduce subsidies.
3 The bread of the poor, the bread of the welfare
What happens next?
In fact, since 2020, the Egyptian government has gradually reduced the size of welfare flatbread, reducing the weight of each pie from 130 grams to 110 grams, and will be reduced to 90 grams in 2021. "Big pie becomes small pie", isn't this a disguised price increase?
At the same time, the Sisi government has been promoting a number of reforms in the field of food subsidies: not only raising the subsidy threshold, transforming general subsidies into more accurate subsidies focusing on vulnerable groups, but also striving to improve the efficiency of subsidy projects and reduce the loss and waste of procurement and storage links.
It can be seen that although the issue of the price increase of the big cake is tricky, Sisi has indeed taken practical actions to change the situation that the price of the welfare cake has not increased for decades, and to take a small step forward in the direction of a modern economy.
Looking back at history, welfare pies have played a variety of important roles in different periods of Development after World War II in Egypt: during nasser's period, the government provided workers with cheap food and distributed free pies to promote the country's industrialization process; during sadat, further expanded food subsidies became a compensation mechanism to offset the negative impact of its neoliberal reforms; during the Mubarak period, the continuous expansion of Egypt's poor groups made the welfare pie even more difficult to shake the psychological defense line...
In the new era, the Sisi government is trying to dominate the original intention of returning to the welfare pie: to re-turn the big cake into the big cake of the poor and the big cake of welfare. It's just that this transformation is destined to be difficult, and people sweat for it.
In addition to the problem of Egypt's high poverty rate, the rapid rise in international food prices since the outbreak of the new crown pneumonia has dealt a heavy blow to Egypt, a populous country in the region and the world's largest wheat importer.
Inevitably, this will make the president have nightmare associations. Perhaps to Sisi's relief a little, is the international recognition of years of economic reforms.
Egypt was named by the IMF as the only country in the Middle East and North Africa region to achieve positive economic growth in 2020. In 2021, Standard & Poor's confirmed Egypt's credit rating as "B", the fourth consecutive time since the outbreak that the rating has remained stable. In 2021, various loan funds from international organizations such as the IMF and the World Bank were injected into Egypt many times. Despite the continued multifaceted negative impact of the pandemic on global and regional cross-border investment, Egypt remains The largest recipient of foreign investment in Africa in 2020.
At the same time, it is both practical and symbolic that in August 2021, six years after the Aeroflot crash, Russia and Egypt fully resumed direct flights, and Egypt's tourism industry ushered in a new recovery opportunity. Of course, due to the impact of the epidemic, the recovery and development of Egypt's tourism industry is still difficult to be satisfactory.
Returning to Sisi's speech, although the blockbuster news of the increase in the price of welfare pie has occupied the headlines of major media for a while, the focus of the speech - providing nutritious meals for Egyptian students, is still lamentable, how to make people eat enough and eat well, has always been a big problem in this country that shares more than 95% of the desert pool area with nature.
As Sisi put it, "almost nothing can remain unchanged for decades," and likewise, the standard of living of the Egyptian people cannot remain unchanged for decades. The pie is a problem, but not the whole problem – since Nasser's time, round after round of clamor around Egypt's democratic political crisis has, in the final analysis, an echo of Egypt's quest, wall-bumping, and re-inquiry on the road to modernization.
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