Fate of impoverished uncertain under Egypt’s neo-liberal aspirations 

Adham Youssef
7 Min Read
As Egypt is mobilising all its resources to hold the Economic Summit, some issues arise, which could cause unfortunate consequences for low-income citizens (DNE Photo)
As Egypt is mobilising all its resources to hold the Economic Summit, some issues arise, which could cause unfortunate consequences for low-income citizens (DNE Photo)
As Egypt is mobilising all its resources to hold the Economic Summit, some issues arise, which could cause unfortunate consequences for low-income citizens
(DNE Photo)

Long before the 25 January Revolution, the Egyptian state was struck by a more class conscious, angry wave of protests, now known as the January 1977 uprising, or the 18 and 19 January bread riots.

After the 1973 war with Israel, the crossing of the Suez Canal and the start of negotiations, Egyptian state media and government officials started to propagate a new Egypt. This involved greater prosperity for all citizens, after years of austerity measures that were directed towards supporting the “war effort”.

Not less than five years later, Egypt started reforms to accept “reforms” by international financial institutions, such as opening the market, facilitating foreign investment, and making way for more consumer goods.

In 1977, another government measure was to lift subsides on essential food goods, like bread, sugar, and other cooking materials, leading to full scale riots. They attacked not only signs of luxury, such as cars, cafes, and consumer shops, but also targeted police stations and government offices.

In 2015, 38 years later, “the Egyptian government is still looking to open up its market while underestimating a possible rise of the poor against some economic policies”, said Kareem Megahed, a researcher at the AUC Economic Center.

As Egypt is mobilising all its resources to hold the Economic Summit at any cost, some problematic issues arise as overseen by the regime, which activists and politicians argue can cause unfortunate consequences.

On 9 March, President Abdel Fattah Al-Sisi said the next period will include a focus on development issues, putting low-income villages on the top of the list.

However, the government has focused its efforts on consumption-based projects, where revenues are to be produced, said Megahed.

Aside from the anticipated Suez Canal project, Egypt has been witnessing a rise in services, hotels, tourism villages, entertainment and real estate.

The Ministry of Housing is set to sign a Memoranda of Understanding with 170 Saudi businessmen during the Summit, with capital of over EGP 1bn.

Furthermore, a number of investment banks are planning to fund and acquire shares in the proposed projects presented at the summit.

Finally, Egypt has unveiled plans to build a 200m high pyramid skyscraper, Zayed Crystal Spark, on a 798,000sqm area at Sheikh Zayed City in Cairo.

Ahmed Bahaa Shabaan, Egyptian Socialist Party head, said it is important to direct investment into projects that are beneficial to the “impoverished Egyptian people, and that do not harm the environment”.

He demanded that the projects should not be “consumerist and luxurious”, which will produce revenues for investors only. He further stressed the importance of having major “productive” projects.

Last year, the cabinet announced a controversial plan to import coal to offset a power crisis at cement factories. The use of coal as an energy source has been met with wide criticism from environmental activists.

One of the main campaigners against coal usage in cement factories is the Egyptians Against Coal group, who have challenged the cabinet decision to use coal in cement factories.

The campaign rejects coal due to its health risks “while less harmful alternatives exist”, adding that coal will only benefit businessmen who would prefer lower costs.

However, Italcementi, owner of Suez Cement Group, which owns five factories across the country, announced they started using coal in two of their factories. The company will be participating in the summit.

Meanwhile, Al-Sisi met the African Ministers of Environment and the United Nations Environment Program (UNEP) executive last week, and stressed the importance of giving due care to the issue of climate change.

The Egyptian Social Democratic Party said it welcomes the Economic Summit, and added that it is “necessary for the summit to satisfy the needs masses of Egyptians and not just the business class”.

The party, which was supposed to participate in the postponed parliamentary elections, said that the current government rhetoric puts a lot of trust in private real estate projects, which only target a limited kind of audience.

It also demanded that the government should openly announce its economic policies, and whether there will be a raise in prices, and their implications on the low-income segments. It added that there is a trend to depend on the status of investment as indicator of development, while ignoring the low-income, and the unemployed.

Since being sworn in as president, Al-Sisi has taken a string of decisions often classified as austerity measures, such as partially removing fuel subsidies. The consequent increase in prices was met with heavy criticism from the lower-income classes.

In addition to having no prior notice of price increases, even verbally, the government failed to formulate preventive policies to protect citizens from the skyrocketing prices, Megahed told Daily News Egypt.

However, the government argued that the move was made to reform the subsidy system and ensure delivery of petrol, diesel, and gas to homes and factories.

The extent to which the promised projects in the summit will affect Egypt’s lower-income segments is still unclear. Although the media apparatus is putting high hopes on foreign investment, the government has asserted in many of its statements that “the Egyptian citizen will feel the positive effects of the projects in no less than two years”.

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