In Egypt’s Bread, Signs of Economic Weakness
There is no more potent symbol of Egypt’s economic fragility than the pocket bread that is a staple of life here.
Every day, the Egyptian government allocates 25-pound bags of subsidized flour to designated bakeries to produce the Frisbee-shaped loaves, which Egypt’s impoverished and working poor buy for about eight cents per 10 loaves. But sometimes, there is not enough to go around.
While fertile land is abundant in Egypt, particularly along the Nile river, the country relies on foreign producers for nearly all of its agricultural needs — including wheat. And though the state sets prices on basic goods such as bread and heating oil, when the cost of importing commodities goes up, the underground economy flourishes. Some bakers sell their flour allotment on the black market instead of making bread, prompting shortages, long lines, and, sometimes, unruly crowds.
Egypt’s slide from breadbasket of the eastern Mediterranean to net grain importer is elemental to an economic crisis that threatens to convulse the nation. Complicit, according to economists and farm experts, is an Egyptian government that for years refused to build the infrastructure needed to produce wheat in a cost-effective way; a privatization drive that plundered Egyptian agriculture with ill-advised and often corrupt divestment deals; farmers who sold their fields to property developers or diversified into more profitable crops for export at the expense of grains; and the U.S. government, which promoted sales of American wheat in Egypt rather than encouraging greater self-reliance.
Today, Egypt imports some 80 percent of its agricultural products, and with a currency devaluation expected sometime this year, consumers are bracing for more costly foreign goods across the board. The country labors under a chronic balance of payments deficit, and inflation, already at 9 percent, is expected to increase in the coming months along with borrowing costs. Already, lines of motorists anxious about fuel supplies, another subsidized commodity, have been radiating from gas stations.
In a country where 40 percent of the population lives on less than $2 a day, subsidized bread is considered a basic human entitlement. Efforts to lift price supports have fueled riots, most severely in 1977, when then-President Anwar Sadat was forced to reinstate them, and inexpensive bread was hailed alongside freedom and social justice as the clarion call of the revolt that deposed President Hosni Mubarak a year ago. But economic distress has only intensified since Mubarak’s ouster, raising the possibility of more social instability and violence.
‘Everything starts with the farm,’ said Mohammed Barghash, who chairs Cairo’s As-Salam Agriculture Association. ‘If a country is unable to provide its own food, it is not worthy of the name.’
Not surprisingly, most of the blame for Egypt’s food insecurity is heaped on Mubarak. Two of his last three ministers of agriculture are in jail, charged among other things with allowing tainted pesticides into the country and selling prime farmland to regime cronies for a fraction of its market value. ‘Hosni Mubarak killed Egyptian agriculture,’ said economist Mohammed Gouda, who was raised by cotton growers. ‘It was not done by benign neglect. It was malign and corrupt.’