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Egypt MPs warn harsh economic measures could spark street protests

A large number of Egypt MPs warn that any government plans for phasing out subsidies could spark wide-scale street protest

Gamal Essam El-Din , Sunday 21 Feb 2016
Egypt parliament
A large number of Egypt MPs warn that any government plans for phasing out subsidies could spark wide-scale street protest (AP)
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Many Egyptian MPs are warning the government against "any shocking measures" that might hit hard poor and limited-income classes.

The MPs say they insisted in their meetings with Prime Minister Sherif Ismail that they will strongly oppose any further devaluation of the Egyptian pound or even any partial phasing-out of subsidies on electricity and water.

The MPs' warnings come a few weeks after they voted down the controversial Civil Service law that was targeted at reforming the government's administrative sector. MPs said the law would negatively affect the lives of 6.4 million state employees.

Anwar Al-Sadat, chairman of the Reform and Development Party, told Ahram Online that most independent MPs stand against the government taking any measures that might cause a new reduction in the lives of ordinary citizens.

"Poor citizens have suffered a lot in recent weeks due to the government's repeated devaluation of the Egyptian pound against the dollar, and they cannot bear any longer the burdens of any further harsh economic decisions," said Sadat.

Sadat disclosed that he and many independent MPs have sent the prime minister a letter warning him that any further devaluation of the Egyptian pound or phasing out subsidies on electricity and water, or raising the cost of travel on the Cairo Metro system could spark wide-scale street protests.

Sadat said independent MPs have urged the government of prime minister Ismail to concentrate instead on fighting corruption and eliminating all forms of extravagance in government offices.

"MPs told PM Ismail to seek other policies such as imposing higher taxes on business tycoons, prevent senior officials from making costly foreign visits, and stop using luxurious items such as Mercedes cars in government ministries," argued Sadat, adding that "MPs are in support of raising custom duties on imported luxury items, but not on goods that are vital to the lives of poor classes."

Mohamed Zeineddin, an MP affiliated with the Support Egypt parliamentary bloc, said that "while MPs are aware of the current dollar crisis which led Egypt's import bill to spiral out of control and exert huge pressure on the country's foreign exchange reserves, we also urge the government not to let poor classes bear the burden of this crisis."

"This is what we told prime minister Ismail in our private meetings with him, and he agreed that vulnerable classes should not bear the cost of reform," said Zeineddin, adding that "we will wait and see how the government's policy statement will come out and we will try to reach common ground on any package of economic reform measures."

Prime minister Ismail told a number of editors-in-chief in the last few days that he will not use his statement to the House of Representatives to unveil any "shocking measures."

"The government does not believe in shock tactics, and we prefer to work towards our goals gradually," said Ismail, indicating that "the new package of economic reforms will mainly focus on raising custom tariffs on many imported goods in order to both generate more sovereign revenues and give a boost to national industry."

Independent MP Ahmed Mostafa Abdel-Wahed, however, believes that the government aims to devalue the Egyptian pound to more than LE8 against the dollar.

"We warned PM Ismail against this step and told him that it would raise prices of basic goods to dramatic levels," Abdel-Wahed said, adding that he “told Ismail that when the government surprised parliament with devaluing the pound and cutting down subsidies in 1977, the result was violent street protests and food riots in Cairo and other major cities.”

Abdel-Wahed also warned that the government's policy statement comes at a time when there is a lot of resentment in parliament against the recent “arbitrary practices” of policemen against ordinary citizens.

"The government is required to fight corruption, discipline the interior ministry and rationalise spending before talking about any economic reform measures," said Abdel-Wahed, adding that "it will be like pouring oil on fire when PM Ismail comes in these tense conditions to announce harsh economic measures."

Alaa Abdel-Moneim, spokesman of the Support Egypt bloc, said MPs have asked the government to delay its policy statement before parliament.

"We told Minister of Parliamentary Affairs Magdi El-Agati that it will be quite difficult for prime minister Sherif Ismail to come to parliament on 27 February to deliver his policy statement," said Abdel-Moneim.

"Parliament will need around one month to discuss and endorse its new internal-by laws and code of conduct," he said. "Besides, we cannot discuss the statement before the House's 28 committees are created."

He told reporters that "the first of April is a very good date for the government to deliver its policy statement."

Egypt's parliament is scheduled to holding a plenary session on Sunday.

Abdel-Moneim said that before the session, parliament's internal bureau – including the speaker and two deputies – will discuss forming two committees; one for discussing president Abdel-Fattah Al-Sisi's speech before parliament on 13 February and another one on reviewing the government's new amendments of the controversial Civil Service Law.

The debates of Sunday's session are expected to focus on discussing a resignation request submitted by appointed MP and former high-profile judge Sirri Siam and reviewing a report on parliament's new by-laws and code of conduct.

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Magdy
22-02-2016 04:15am
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3rd revolution
A 3rd revolution is inevitable. The economy is collapsing, the Pound will be hammered, prices will go through the roof. The Government has no more cards to play; protest laws and police dogs won't stop disparate fathers with hungry kids they can't afford to feed.
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NewEgypt123
21-02-2016 06:15pm
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2+
Keep the Pound Strong
In response to Sam Enslow: I agree with most of what you said, but I think the government must continue to support the value of the pound. Egypt, as an overwhelmingly net importer, must have a strong pound or else it will gut its economy. The only way for Egypt to safely float the pound is to build factories to serve domestic demand, and eventually export to earn FX. I strongly believe that Egypt could also become a shipping titan dominating shipping between Europe and Asia rather than being just a pass through. Egypt has the shipyards, manpower, and a competitive advantage in the Suez Canal. By allowing Egyptian shipping companies using Egyptian crews and Egyptian made vessels; Egypt could revive its economy through the shipping industry. I have always asked myself why Egypt doesn't become a naval and shipping power.
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expat
21-02-2016 09:06pm
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egyptian made vessels???
ok,then please let ONLY egyptians on board and no value goods...the quality of egyptian products is known well ...
Sam Enslow
21-02-2016 08:51pm
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With what?
Egypt has a shortage of dollars to support the pound. Even now this is reflected in the black market spread. However, I have enjoyed these comments. All present valid suggestions. On the jobs front, I would suggest apprentice programs as found in Germany. Egypt was known for its artisans, and many types of skilled labor are needed. Egypt must compete on quality - not price. All products must represent value for the dollar.
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NewEgypt123
21-02-2016 06:00pm
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Do Not Reduce Subsidies to the Poor
Reducing subsidies is not in Egypt's interests regardless of what Western organizations say. Egypt has 40% poor people. A reduction in subsidies to these people will be felt on the entire Egyptian society. The answer is to more efficiently deliver subsidies to the people truly in need, while cutting off people taking advantage of the system. Another solution that should be undertaken at the same time is to create a jobs program to provide jobs to the poor so that they will not need subsidies. But to get rid of subsidies for the poor is not the answer, it will hurt society. I hoped that the person elected after 2011 would've created a massive jobs plan to rebuild Egypt and employ its youth. There needs to be a new social program. Instead of conscription to the army, let youth be conscribed to a jobs corps for 2-5 years. They can build homes, roads, factories, etc. during their time, and when they leave they get a free apartment. The government would only pay for materials. Rebuild!
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Sam Enslow
21-02-2016 08:58pm
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New Deal
Trained workers are needed and the projects you suggest are good. You can kill two birds with one stone. The question is one of money and the allocation of resources. Governments do not make money. They spend it. A transition from subsidies is needed, but if Egypt can create conditions where the average worker earns a living wage, subsidies will not be necessary. Egypt needs exports. Even now it has problems importing cooking oil and other products needed by the poor. Good brainstorming.
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Sam Enslow
21-02-2016 04:03pm
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Remove unnecessary pressures
The pound must be allowed to reach its true market value or the poor will suffer more when Egypt's currency resembles that of Venezuela's Bolo. The government must deal with economic realities, but it must also, with honesty and clarity, explain the situation to the people, no grand promises or grand schemes, just the truth. The people of Egypt love their country and can and will deal with even harder timesif the see a way out. However, they must believe what they are being told. Economic hard times are hard to endure. This is why the government must take all steps to lessen other pressures on the people. Small time corruption must cease, the police must be effective but courteous, the courts efficient and rule to protect the poor as well as the rich, garbage law suits must be quickly rejected. Equally important is that journalists and, especially TV presenters, tone down the rhetoric and provide honest information on the economy. Let the people breath, stop looking to punish.Encourage
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expat
21-02-2016 09:09pm
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32+
which products,SAM
should they sell on market prices? the only ones researched are antiques,the rest,including the infamous sprout seeds,everybody can get at a beter rate from other sources...what the heck they should sell? not even their youth is worth a dime,as they are hardly better educated then illeterates for example as soldiers in yemen
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