During the last episode of As the Egypt Turns and Cairo General Hospital we learned that…
1. Egypt is out of money. It’s even out of other people’s money.
2. The Muslim Brotherhood is in a prolonged conflict with the Egyptian police, soccer fans and now bakers.
3. The Egyptian revolution largely happened because of a spike in the price of bread.
And now on this episode, the Brotherhood is trying to ration subsidized bread leading to angry protests by bakers. While a protest by bakers wouldn’t be taken too seriously in the United States, in Egypt and some parts of the Middle East bakers are very important because the food supply hinges on bakeries.
Egypt’s bread and fuel are subsidized by the government to control the impact of food and fuel prices. If the price goes up too much, riots begin and governments get overthrown.
The Muslim Brotherhood’s solution to the fuel crisis and bread crisis was to find ways of providing subsidized products only to the poor. This sounds good on paper, but in practice worked out really badly with fuel leading to shortages, lines and protests.
Now the Brotherhood is trying the same thing with bread limiting access only to a set amount of cheap loaves for smart card holders. And the new policy is already off to a great start.
Egypt plans to start rationing subsidised bread, a minister said on Tuesday, taking a risky step to curb the budget deficit by restricting supplies of cheap loaves vital to the poor.
The government will start rationing “after two months,” Supply Minister Bassem Ouda said. Trials of a rationing system using electronic smart cards will begin in the restive Suez Canal city of Port Said and its suburb Port Fouad.
The cheapest subsidised loaves are sold for 5 piastres, or less than 1 U.S. cent.
Tempers are already rising over higher prices. Bakers are threatening to strike, accusing the government of owing them 400 million pounds ($59 million) in overdue subsidies. Ouda said on Monday that the bakers would face legal action unless they called off the strike action.
Abdullah Ghorab, head of the bakers’ association which represents 25,000 private bakeries across the country, said on Tuesday that imminent strike action had been postponed as they seek a meeting with the prime minister in two days’ time.
Around 200 bakers protested outside the Supply Ministry on Tuesday, saying that the government wanted them to sign a contract that would set the price for subsidized flour at a level they found too high.
“If they don’t change this, we will close our shops,” bakery owner Mohamad Sharaf said. “We will not be able to work because we will not pay out of our own pockets.”
The bakers, who had travelled to Cairo from around Egypt, also complained of corruption in the bread sector. Rising fuel and ingredient costs have hit their businesses hard, bakers say.
The government spends over $5.5 billion a year on food subsidies, which also cover items such as rice, oil and sugar. A slide in the Egyptian pound’s value is pushing up the bill, as much food has to be bought for dollars on international markets.
An extended baker’s strike would probably put the kibosh on the Muslim Brotherhood regime for good. But Qatar has run out of money to pump into the Brotherhood. It’s too busy using that money to subsidize the Muslim Brotherhood revolution in Syria. And the IMF isn’t coming through with the cash until reforms take place.
And oh yes, they picked the perfect place for a trial run of the bread rationing system.
The cities earmarked for the bread rationing trial, Port Said and Port Fouad at the Mediterranean mouth of the Suez Canal, have seen violent protests in recent weeks over death sentences handed down on local soccer fans for their role in a stadium riot last year when more than 70 people died.
This should go swimmingly.