In a stormy session before parliament on Tuesday, Prime Minister Mustafa Madbouli insisted his government had succeeded in changing Egypt’s economic outlook for the better. MPs begged to differ, arguing that Egypt’s economic reform programme had negatively affected the lives of millions of Egyptians.
Many MPs singled out Minister of Supply Ali Moselhi for particular criticism after two million citizens had their ration cards withdrawn.
Madbouli began his hour-long statement by warning that Egypt was facing a non-conventional war.
“This war seeks to create a state of confusion, spreading disillusion and undermining public confidence in state institutions, including the presidency,” said Madbouli.
Madbouli claimed the hostile media campaign targeting Egypt, led by television channels broadcasting from Turkey and Qatar, was at the forefront of this non-conventional war that sought to turn people against the army and security forces.
“They know they cannot attack Egypt in a conventional war because the Egyptian army is very strong,” said Madbouli. “But Egyptian citizens will never let chaos hit Egypt again. We must all work to protect the security and safety of the nation.”
Madbouli told MPs that “when some citizens took to the streets two weeks ago the authorities responded in a legal and professional way.” He praised the police who moved to defuse the situation “firmly, and without committing any violations”.
Madbouli said his government was an extension of that of his predecessor Sherif Ismail.
“In this sense the government was formed when President Abdel-Fattah Al-Sisi came to office in 2014, against a backdrop of difficult local and regional conditions. Egypt had passed through political upheavals, security conditions were bad and the economy, infrastructure and basic services like water, electricity and natural gas, were on the verge of collapse.”
To save the country from crumbling it was necessary to move in two directions, said Madbouli. Mega-projects had to be implemented to reduce unemployment, and an economic reform programme adopted to improve fiscal conditions.
“When Al-Sisi took the first step towards implementing this programme in November 2016 Egypt’s basic food and fuel needs were threatened. Foreign exchange reserves stood at just $15 billion, barely enough to cover two months’ worth of imports.”
Now, said Madbouli, “foreign exchange reserves stand at an unprecedented $45 billion, unemployment has fallen from 13 to seven per cent, economic growth is 5.6 per cent, its highest in 10 years, inflation has dropped from a high of 33 per cent to 6.7 per cent and the budget deficit is just 8.2 per cent of GDP.”
The government had taken steps to mitigate the impact of economic reforms on the poorest sections of society, said Madbouli. “We adopted a number of social protection programmes. We upped minimum wages from LE1,200 to LE2,000, offered cash subsidies through the Takaful and Karama programmes, increased the number of citizens with ration cards, implemented the decent life initiative, and went ahead with a number of mega-development projects to reduce unemployment.”
Responding to attacks against the minister of supply, Madbouli said the budget allocation for ration cards increased from LE35.5 billion in 2014 to LE89 billion in 2019.
“When we decided to automate the ration card system we discovered that millions of people who had them were not entitled to the subsidies. Their names were removed so that the resources available could be directed to those people, the poorest in society, who really need them.”
Some MPs pointed out that 1.8 million citizens whose ration cards were withdrawn have now had them reinstated, and that an additional 100,000 families have been shown to be eligible for the food subsidies.
Other MPs argued vociferously that the results of the economic reform programme had not trickled down to the poorest members of society.
Atef Nasser, spokesperson of the Future of Homeland Party, accused Madbouli of painting a rosy picture of life in Egypt.
“His statement suggests that the Egyptian people live in a state of prosperity,” said Nasser. “The reality is that citizens cannot afford the costs of the economic reform programme. Too many people struggle to pay their electricity and water bills. Too many receive inadequate care in government hospitals.”
Abdel-Hadi Al-Qasabi, leader of the majority Support Egypt coalition, pointed out that the number of Egyptians living under the poverty line has hit a record 32 per cent, yet even so “most cabinet ministers refuse to come to parliament to answer questions.”