Government needs more inclusive, transparent strategy towards subsidy cuts: Al Nour Party

Aya Nader
5 Min Read

Recent decisions by the government to cut energy subsidies were met Sunday with a mix of condemnation, criticism, and suggestions for alternatives from Egypt’s political parties, a day after their implementation caused widespread upset across the country.

The Al-Nour Party said although the price increases were aimed at reducing Egypt’s sizable budget deficit, no practical mechanisms to achieving this had been announced. The party stressed the need to outline such measures as soon as possible, in order to prevent certain parties from “taking advantage” and doubling the suffering of lower-income groups.

In its Saturday statement, the party said that the subsidies issue is “sensitive” and suggested that the government focus on other resolvable issues “that are less harsh on citizens’ livelihoods”, including adjusting special funds, reducing the number of government advisers and cutting government spending.

The party also called on the government to employ a clearer methodology and greater transparency with citizens while addressing subsidies, while being more inclusive of political parties and civil organisations.

The Misr Al-Qawia (Strong Egypt) party also issued a statement Saturday. In it, the party said the rise in fuel and electricity prices contradicts the government’s previous pledges to not cut subsidies before making efforts to improve living conditions and alleviate burdens on the poor. The decision, the party said, instead demonstrated the government’s similarity to the regime of ousted president Hosni Mubarak, in its bias towards the wealthy.

The Socialist Popular Alliance Party, meanwhile, presented solutions including retaining commodity subsidies and ration cards system, increasing commodity quantity and quality, imposing greater quality control, and improving the subsidy targeting to ensure they reach areas of greatest need.

The party also suggested reconsidering the tax law, tightening control over the market to prevent monopolies, and applying the maximum wage policy in all sectors.

“The deficit of the state budget is not a disaster, but the causes should be specified and resolved in a way that does not shock the national economy nor favors social classes over others,” the party said their statement. “We are against burdening the poor alone with solutions and having bias towards businessmen and investors.”

The party meanwhile rejected replacing commodity subsidies with a direct cash transfer system, which they pointed out would greater expose the poor to inflation risks.

Reacting more strongly against the move, the pro-Morsi Anti-Coup Alliance said Saturday they “would not rest” until recent government decisions to increase prices of petroleum, fuel and electricity are revoked.

In its statement, the alliance pledged they would oppose the “foolish decisions” by a government they claimed “works as a servant to the interests of corruption inside and outside [Egypt]”. The statement called the decision a “crime committed by the coup authority as a collective punishment, especially the poor”.

The government’s decisions resulted in the price of 92 octane fuel rising from EGP 1.85 to EGP 2.60; 80 octane fuel from EGP 0.90 to EGP 1.6; and diesel fuel and kerosene from EGP 1.10 to EGP 1.80. The price on 95 octane fuel went up to EGP 6.25, while the price of automotive natural gas was raised to EGP 1.10 per cubic metre of gas from EGP .45.

The petroleum product price increase comes after the finance ministry’s reduction of allocations for petroleum subsidies by approximately EGP 41bn, bringing the total allocations for subsidies to EGP 100.3bn.

An increase in petroleum product prices has already led to an approximately 35% to 50% rise in transportation fares, and are likely boost agriculture and food product prices in the near future as well.

Share This Article
Follow her on Twitter @AyaNaderM
Leave a comment