Egypt Boosts Food Aid, Pensions to Ease Pressure on the Poorest

  • Food ration card subsidies raised by 140%, pensions by 15%
  • Government struggling to balance reforms with stability

Egypt boosted food ration aid provided to the country’s neediest, looking to alleviate some of the mounting price pressures that have burdened the population and could present risks to the government as it pushes ahead with reforms aimed at reviving the economy.

The measures announced Tuesday include raising ration card subsidies by 140 percent per person and increasing pensions by 15 percent. The moves, announced by President Abdel-Fattah El-Sisi in a televised event, come amid growing criticism of the government after parliament approved a controversial maritime border agreement that transfers two Red Sea islands to Saudi Arabia. El-Sisi’s critics had decried the pact as tantamount to trading Egyptian land for Saudi money -- a claim the president and other officials have repeatedly dismissed.

The border deal has become a focal point for opposition at a time when many in the nation of 93 million are struggling with the costs stemming from the November decision to lift currency controls. That move, which was key to securing a $12 billion International Monetary Fund loan and winning investor confidence, helped propel annual inflation to over 30 percent, halved the pound’s value against the dollar and placed the government in the tenuous position of trying to advance a reform program without stirring unrest.

“The day will come when we will all be in a better position than we’re in,” El-Sisi said in televised comments Tuesday, arguing that the government began the reform process because delaying it was no longer an option. “We’re not selling you fantasies.”

El-Sisi has repeatedly urged Egyptians to show patience with the reform program, arguing he inherited a country that had been mismanaged for decades -- most recently by his Islamist predecessor Mohamed Mursi, who was pushed from power in a military-backed popular uprising in 2013.

Egyptians, however, have shown increasing frustration with the calls for calm. Nearly half the population lives on or near the poverty line, and officials have stressed that a key priority now is to combat inflation.

The controversy surrounding the border pact with Saudi Arabia has only fueled that disquiet -- with the initial announcement last year triggering the largest protests against El-Sisi since his election. Parliament’s vote put the issue again at the forefront, particularly as the approval of the border pact came despite Egyptian court decisions that had had invalidated the agreement and the transfer of the two islands, Tiran and Sanafir. Adding a new layer of uncertainty, the Supreme Constitutional Court on Wednesday halted the implementation of dueling lower court rulings on the deal.

In addition to the political flap over the pact and the economic woes, repeated militant attacks on security forces and the country’s Christian minority have raised questions about the effectiveness of El-Sisi’s aggressive campaign against Islamists.

Against that backdrop, the government is under pressure to ensure that the costs of economic reforms do not translate into broader unrest while also working on cutting spending -- a key part of the reform effort.

The boosts in aid announced by El-Sisi promise to further test the budget. The ration card allocation increase will cost 85 billion pounds ($4.7 billion) under the fiscal 2017-2018 budget, compared to 45 billion pounds this fiscal year, El-Sisi said.

“Do you believe that the nation has the opportunity to give, but that it doesn’t?” he asked.

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