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Egypt President defends recent price hikes

July 7, 2014

CAIRO (AP) — Egypt’s President Abdel-Fattah el-Sissi defended Monday his recent decisions to partially lift subsidies on fuel that caused a public outcry, calling them a necessary “bitter pill” to revive his nation’s ailing economy.

In a nationally televised speech, el-Sissi went through figures for budget deficits and government debt to explain to the public last weekend’s steep fuel price hikes, a long-awaited move to curb the country’s massive subsidies program that eats nearly a quarter of the state budget.

In a half-hour-long speech, el-Sissi defended the bold move, saying that other leaders have shied away from introducing such reforms in fear of public upheaval.

“Was there another choice? By God, no. Could we have delayed it? It was already years late,” said el-Sissi, using the Egyptian Arabic vernacular.

All fuel prices went up effective Saturday by as much as 78 percent, causing panic among the public and a political outcry. Economists described the hike as a first move toward putting the country on the path to economic reform.

El-Sissi said common wisdom would have dictated that he hold off on the decision to reduce subsidies to maintain his popularity, particularly since he doesn’t belong to a political party that would rally support for his economic measures.

“But I have God first, and then all of you Egyptians,” he said.

Likening the current conditions to the times of multiple wars with Israel in the last century, el-Sissi said Egypt is at war to rebuild following turmoil, urging people to be patient and put up with the austerity measures.

He also warned Egyptians against taking advantage of the lifting of subsidies to raise prices unreasonably. Those who don’t heed his calls, he said, will have to answer to the law.

“We are waging a war to build Egypt in the face of many challenges — economic, political and security challenges, inside and outside of Egypt,” he said.

The price hikes have caused shock and confusion on the streets, with some taxi drivers going on strike to protest the steep fuel rises, which they complain were not translated into a proportionate hike in fare rules.

A number of political parties have also come out against the increases. On Monday, the liberal al-Dustor party called the economic decisions unfavorable to the poor and said they were hastily passed. “It would have been more useful to look for ways to push economic activities, encourage investment, and adopt real austerity measures in terms of government spending,” the party said in a statement.

There has not been an outpour of public anger against the new decisions. Most Egyptians, in a country where nearly half of the population of 86 million live in poverty, are still reeling from the news, which included also a gradual increase in the price of electricity, a new property tax and a rise in cigarette prices.

But el-Sissi said the government also moved to cushion the price hikes, introducing a minimum wage for public sector workers, hiking pensions and making more foodstuffs available in state-run outlets selling at discounted prices.

The military on Monday said it was deploying its buses for the public to use to counter unregulated price increases in usually cheap and ubiquitous private transport put in effect by some drivers.

El-Sissi again leaned on Egypt’s wealthy, urging them to donate to a fund he created called “Long Live Egypt” which he said he will personally oversee to help push development programs that will tackle unemployment, estimated at over 13 percent, and drive growth rates.

“This is the time of the haves,” he said, saying he expects to raise more than $7 billion for that fund.

“Are you not going to stand by Egypt?” he said, prodding the business community and Egyptians abroad to donate, a demand he has made repeatedly in most of his speeches. “There must be billions at my disposal, not from the state budget, to create investment opportunities.”

To drive the point home, el-Sissi was filmed donating to the fund at a Cairo bank earlier Monday. It was not clear how much he put in, but he had vowed in an earlier speech to donate half of his personal wealth and half of his monthly salary.

Mega development programs promised during his election campaign were put off until after the holy month of Ramadan, he said, which ends in late July and sees productivity ebb because believers abstain from food and drinks from dawn to dusk.

El-Sissi also accused Islamists, a reference to the Muslim Brotherhood group he ousted from power last year, of using religion to increase their attacks on him and his programs.

“Don’t forget there is a faction that doesn’t know God and is ready to destroy the Egyptian state, and is working on that and thinks this is a sacred war,” he said. “Beware! Religion is being used as a tool to destroy nations.

“This will not happen in Egypt, God willing.”

He described this conflict as regional — a reference to the current chaos in Syria, Iraq, and neighboring Libya — and said it threatens the world.

“This region is being destroyed now,” el-Sissi said. “We should not let that happen.”

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