Highlights
– At least seven Egyptians die due to violent clashes or heat exhaustion waiting for government-subsidized bread
– Cost of wheat and other staples have increased dramatically in Egypt
– Government-owned bakeries selling subsidized wheat in black market
– Violent civil unrest likely to continue in the near-term; potential for large-scale rioting likely if staple prices continue to rise
Over the last month, rising bread costs have led to clashes and civil unrest as the government subsidized staple has become increasingly difficult to purchase among middle-class Egyptians. Many Egyptians, in recent weeks, have been recalling the January 1977 bread riots, when 70 people died in clashes after the government tried to reduce subsidies on the staple. Although the recent unrest over similar bread shortages has not reached such catastrophic levels, civil servants and government officials alike are deeply concerned over the potential for mass riots to occur should the price of staple goods, such as wheat, rice, sugar, oil, and cement continue to spiral upwards.
Rising international prices and competition in world markets have strained local markets in Egypt. Long queues in front of government-owned bakeries selling subsidized bread have led to a wave of discontent across the country. To date, a purported seven people have died in violent clashes and heat exhaustion due to long bread lines (Incident).
Most concerning, according to the Ministry of Social Solidarity, is the issue of bakery owners selling their daily share of subsidized wheat flour in the black market for more profitable returns. However, the government has responded relatively quickly to the critical economic situation.
Government Responds to Appease Disorder
Shortly following the spike in wheat prices and subsequent shortages at local bakeries, the government tightened their control; ensuring bakeries receiving subsidized flour would be prohibited from selling the product on the black market. According to government figures, 4,000 tons of the daily 20,000 tons of wheat supplied to government bakeries are sold in the black market. As a result, authorities have declared a cash reward of 1,000 EGP for anyone offering information about individuals involved in selling flour in the black market.
In addition, President Mubarak has ordered rice and cement exports to cease for six months in order to combat rising prices on the local market. Mubarak also ordered the army to bake more bread, as it has opened ten new large bakeries in Cairo and established approximately 500 kiosks to sell less expensive bread to the public. Mubarak has also ordered the government to use foreign currency reserves to buy additional wheat from the international market. Finally, the Ministry of the Interior has pledged to add 15 million new names to the list of those receiving cheap rations of cooking oil, sugar, and rice.
Gamal Mubarak, the President’s son and heir-apparent, has said the government “will not hesitate for a minute to increase subsidies on basic products if it proves necessary.” Gamal, who has been the vanguard of the county’s economic liberalization program, has pleaded for the increase in salaries among Egypt’s civil servants. As the country’s leading voice for economic reform and the leader of the ruling National Democratic Party, Gamal’s support for increasing salaries and his genuine concern over rising prices should be effective in correcting the current economic disaster.
The government’s swift response to rising food costs has left a good impression among many of those suffering from the current dilemma in Egypt. However, tensions continue to rise among civil servants waiting in long lines for bread and other subsidized goods. Although the government may be responding appropriately to the situation, Egyptians are growing impatient. Large-scale rioting, echoing the events of the 1977 bread shortage, is unlikely to take place in the mid-term. However, civil unrest will likely remain a concern in the near to mid-term, until the prices of staple items begin to decrease and demand for subsidized goods declines.
