Page 31 - Issue 64

Vol.1 Issue 64 ÉLITE

20 piasters a loaf. Such a step puts more education, which is sarcastic given the
more pressure on those who are in need the insignificance of the size of the bread
most while those in extreme poverty and subsidy within the state budget, which
near poverty constitute about 60% of the constitutes 2% of total government
population. Thus, we still have 64% of the spending, and that the amount saved from
population benefiting from the subsidy the reduction, 15 billion L.E, is a drop in
despite government efforts to limit the scale the ocean of the increase in spending
of benefiters, which shows how it is badly needed to reach the constitutional
needed. Moreover, bread is used to deliver entitlement for education and health
the poor calories and nutrients. On the spending, which is equal to 744 billion L.E
contrary, the government should actually and 317 billion L.E respectively.
increase the subsidy to fill the calories and And while Egypt is going through a crisis

nutrients gap caused by inflation in food of severe shortages in the pharmaceutical
prices. sector and an increase in prices ranging
Some arguments were made to support between 20-40%, in addition to the already
the unpopular decision. All of them are high inflation in health goods and service
shallow. First, the government argues that prices in the previous years, the government
the price has been fixed since the 80s, which drafted a bill that was approved by the
is not true because the government has parliament and signed by the president that
reduced its weight multiple times since would allow the private sector to manage
2014, reaching 90gm in 2020. Second, many and operate public hospitals. The bill
are calling for cash subsidies to replace the mentioned no restrictions on charged
bread subsidy, arguing that it is more prices, leaving the poor vulnerable to more
effective. However, the bread subsidy is way inflation in healthcare prices. We used to
more effective and efficient as it requires complain of bad service in public hospitals.
much less administrative costs than cash Yet, there is worse to come. Soon the poor
subsidies since the subsidized bread is an will not be able to have treatment in the
inferior good that is only bought out of better equipped public hospitals, which are
desperation. Takaful and Karama program, the ones offered to investors, and will be left
which the government keeps boasting of, only with the primary health-care centers.

has also proven to be ineffective, although These decisions represent an extension
it requires much more administrative costs and a continuity of the policy of austerity in
to determine who is worthy of cash the already insufficient social spending
transfers. According to a report published while increasing spending on infrastructure
by The Tunisian Observatory of Economy projects, which resulted in the increase of
in 2023, 55% of people that the program interest payments as a percentage of public
intends to target in the poorest 10% of the spending. Over the last decade, public
population and 75% of those in the second expenditure as a percentage of GDP in
poorest 10 per cent are wrongly excluded. Egypt fell by 10 points, decreasing from
Third, Mostafa Madbouly, the prime 31.3 percent in 2014 to 21.1 percent in 2024.
minister, argued that the government aims Between 2013 and 2023, social spending
to divert the saved resources to health and share of public expenditure has decreased

July 2024, p.31