CAIRO - Around the time the Egyptian currency hit a record low, an article this month about the country's sharp economic downturn was quietly slipping off the front page of one of its leading newspapers.
As editors knew, Egyptian censors can be sensitive to any
public hint of a crisis,
especially when the government shares the blame.
The item was buried inside.
The price of eggs has skyrocketed in Egypt.
For many, they are now considered a luxury Photo.Mohamed Abd El Ghany/Reuters
However, the Egyptians did not need to read it to realize that the rug was being pulled from under their feet.
Crisis
Food prices are stratospheric.
Money is worth half what it was a year ago.
For many, eggs are now a luxury and meat is no longer on the table.
For others, weighed down by school fees and medical bills, the
middle-class life
they worked so hard for is slipping away.
"Right now, we don't see anything on the horizon. Nothing," says Mai Abdulghani, 30, a communications officer at a Cairo nonprofit.
Her husband, a design engineer,
works four jobs
to support himself, and the car and children they had planned are not a possibility this year.
Egyptian President Abdel Fattah al-Sisi.
Courtesy of the Egyptian Presidency.
via REUTERS
"All I do is think about how we will survive on our budget just to feed ourselves," he says.
"Every time we visit the supermarket, my blood boils."
The crisis came to the fore in February, when Russia invaded Ukraine, shaking countries across the Middle East.
In Egypt, the fallout from the war exposed deep flaws in the way President
Abdel-Fattah el-Sissi
and his lieutenants had managed the economy, exposing his authoritarian leadership to dangerous levels of criticism from both public opinion public and its foreign partners.
Under pressure, the government has been forced to commit to far-reaching
changes
that, if implemented, could deliver growth, but are haunting Egyptians.
When the war broke out, the
Russian and Ukrainian tourists
who once made up a third of Egypt's visitors largely disappeared, along with most of the imported wheat that feeds its population.
Foreign investors fled, taking some $20 billion with them.
In a country heavily dependent on foreign products, the combination of factors - dollar shortages, high import prices and huge public debt payments due - spelled disaster.
For the fourth time in six years, the El-Sissi government requested a bailout from the International Monetary Fund, which granted it
$3 billion
over four years, much less than before and with much stricter conditions.
Egypt had long used dollars to prop up its currency, the pound, and thus maintain Egyptians' ability to buy imported goods.
The IMF has forced him to let the value of the pound
slide and fluctuate
without interference.
In a demand that strikes at the heart of the Egyptian power structure, the IMF is also demanding that Egypt sell off some state-owned companies to raise money and strip military-owned companies of tax breaks and other privileges, allowing private companies to
compete .
.
El-Sissi's government, which came to power in 2013 through an army takeover, had ceded control of a huge swath of Egypt's resources to the military, which had long run a shadow economy in expansion.
Those assets included military-owned pulp and cement factories, hotels and movie studios, and experts warned this was
stifling growth.
Under el-Sissi, Egypt spent billions on flashy megaprojects like
a new capital, highways, bridges, and presidential palaces
, declaring them essential for development.
Financed primarily with
debt
, the spree enriched military-owned companies without producing significant jobs, housing, or other benefits.
Now, under the terms of the loan, Egypt has agreed to
cut spending.
"They are really stuck. Due to the reckless behavior of the regime in managing the economy, Egypt is now extremely vulnerable," said Timothy E. Kaldas, an analyst at the Washington-based Tahrir Institute for Middle East Policy.
"This deal with the IMF is keeping them from failing, but it's putting a lot of conditions on them in a way that they haven't done in the past."
Since the last loan agreement, foreign investors have slowly returned.
Dollars have returned to Egypt and imported goods are leaving the ports, leading to expectations that inflation will ease from 21%, the highest level in five years.
But most Egyptians will continue to struggle, as they have for years as the government cut spending on public health, education and subsidies.
Despite a $12 billion loan from the IMF in 2016, the economy
struggled
to generate stable jobs or reduce poverty.
Even before the coronavirus pandemic began, which devastated the Egyptian economy in 2020, the World Bank estimated that almost 60% of Egyptians were poor.
Many more are now falling into poverty, though Egypt has of late tightened welfare programs and
postponed cuts
to subsidized bread.
At Abwab Elkheir, a charity that helps 1,500 families across Egypt, donations are dwindling and costs are rising.
Its founder, Haitham el-Tabei, has had to stop accepting new cases and reject requests to increase cash donations.
Last year, the organization began receiving more calls from middle-class families whose salaries no longer covered medical treatment or school fees.
"These are people who used to be able to live on their salaries, but suddenly they were in need," he explained.
When prices began to skyrocket in March, Abdulghani, the communications officer, and her then-fiancé decided to marry six months early.
It was a race against inflation:
If they married quickly, they thought, they could pay one rent instead of two and furnish an apartment before appliances became too expensive.
They honeymooned in sunny Upper Egypt.
A week later, back in Cairo, the price of the two air conditioners they wanted to buy had doubled:
now they could only afford one.
Today,
eggs, milk and cheese
for a month cost four times as much as a year ago;
beef, chicken and fish almost triple.
Abdulghani's insulin injections cost
seven times as much.
"Prices were going up like an uncontrollable fever," says Abdulghani, whose master's degree from a British university was, not long ago, the kind of degree that would have guaranteed him a middle-class lifestyle.
"This is not normal, paying all that money just for the basics."
As costs rose, the Egyptian pound slumped, falling from about 16 to the dollar a year ago to almost 30 now.
Abdulghani's husband has been laid off from four different jobs as companies cut costs.
Now he's juggling four new jobs, coming home from the office at 6 p.m. only to work remotely until 1 a.m.
Now he commutes by public transportation instead of Uber, and the couple has stopped eating meat for half the week.
Even so, his wife estimates that they spend
four times more
than before on food and transportation.
"Everyone at the checkout counter talks to each other in disbelief about prices, how we're going to survive like this," he says.
Concern
Unnerved by mounting resentment from a public that already ousted a president once, in the 2011 Egyptian Arab Spring protests, the government has blamed the crisis on the Ukraine war and the pandemic.
State-controlled television channels broadcast segments showing
Europeans complaining about inflation,
as if to remind Egyptians that even rich countries are suffering.
"Have we gotten into some adventure where we've squandered Egypt's funds?
No, circumstances are difficult for everyone.
This crisis is not ours," el-Sissi said in a speech last week.
"But Egypt is
paying the price
, as is every country in the world."
He also scolded concerned Egyptians on social media:
"Enough already!"
But even some normally pro-government voices have risen in complaint.
"In every Egyptian home, rich or poor, there is a state of worry and fear for the future," Amr Adib, a prominent television presenter, said on his show this month.
Analysts say Egypt's promises to boost private sector growth could bear fruit within a few years if the government doesn't sidestep or stall them, as it has done many times before.
Given the dominance of the military, they are unlikely to easily give up their privileges and benefits.
However, Egypt has run out of other life preservers.
Kaldas said the IMF had included monitoring and enforcement mechanisms in the deal that could leave Egypt with no choice but to comply.
Even if military factions resist, he said, criticism from normally pro-government figures suggests some in power understand
the economy needs change.
However, even if Egypt follows through on its commitments, the military could retain control of the assets by selling them off to private companies run by retired officers, said Sarah Smierciak, a researcher at Harvard's Middle East Initiative.
The military already exercises control over some ostensibly private companies run by those cronies.
Egypt has also not committed to curbing military control of land and natural resources, which are far
more valuable
than its companies.
"Stripping these groups of their privileges is unrealistic, politically speaking," he said.
"Even if all official military enterprises were to be privatized - and that is something that will never happen in the foreseeable future - it would still be a relatively small dent in the economic resources that the military controls."
c.2023 The New York Times Company
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