Fears Grow Over Cancelling In-Kind Subsidies in Egypt
Public Concern Over Subsidy Cancellation: Egyptian families, particularly low-income ones, are worried about the government's potential shift from in-kind to cash subsidies, fearing that cash assistance will not keep pace with rising prices.
Economic Pressures: Egypt is facing high inflation (35.2% as of late 2023) and food price surges (60.1% annual increase), which severely affect the purchasing power of cash subsidies.
Government’s Plan: The government aims to reduce its subsidy burden, which is seen as unsustainable in the long term, and shift towards cash subsidies as part of a broader economic reform plan. Officials deny that the shift is a direct condition of the IMF, though many believe IMF recommendations play a major role.
Political and Social Backlash: Critics argue that the government’s plan risks causing public dissatisfaction and social unrest, as it disproportionately affects the poor, who rely heavily on subsidized goods. MP Dawood and others suggest that cancelling in-kind subsidies could lead to greater inequality and potentially spark social unrest.
Uncertain Benefits of Cash Subsidies: While the government claims that cash subsidies could be more efficient, experts warn that linking cash assistance to fluctuating inflation rates could leave citizens worse off, especially if prices for essential goods continue to rise.
Long-Term Social Impact: The article concludes with warnings from various experts about the risk of social instability if the subsidy structure is altered without proper protections for Egypt's poorest families. In-kind subsidies are seen as a critical part of the social safety net, and their removal could increase poverty and malnutrition.
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