Inflation blues

Given the present rates, Sahar El-Bahr suggests, poverty will no longer be the exclusive attribute of the poor

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Al-Douweiqa is the poorest part of Mansheyet Nasser where stories of death and sickness abound

Mostafa Hamdi, 63, former civil servant, had a heart attack after his eldest son, 25, asked him for an extra LE2 a day from the household fund; the son had needed it for transportation to and from work. Hamdi's health was in bad shape and he was under financial pressure. All three of Hamdi's sons -- aged 25, 22 and 20 -- are university educated, but, when they are not unemployed, they can only find vocational work, for no more than LE200 a month -- from 7am to 10pm.

Their pay is spent entirely on the household, except LE2 a day for transportation (which the eldest now wanted to raise to LE4). After the incident, Hamdi's family could not afford the LE2,000 deposit required for admission to a private hospital; all the public intensive- care units were full. And the family could only watch while Hamdi died.

According to official statistics, Hamdi's family is representative of almost half of Egypt's population. Even more alarming is the fact that many of those now below the poverty line originally belonged to the middle class but have since suffered the brunt of inflation and unemployment -- the two most pressing issues for Egyptians, according to a recent survey by the Cabinet- affiliated Information and Decision Support Centre (IDSC).

Poverty is not restricted to the poor as such, but has recently afflicted the middle class as well. Accountant Zein Mansour, one of five million government employees who are the breadwinners for up to 20 million, would rather the government discontinued its annual bonus and dealt with inflation instead.

To make ends meet, Mansour has a private-office job in the evening; he works from 9am to 11pm every day: "I earn LE600 as a monthly salary and I have two daughters who go to school. Out of LE600, I must pay for private lessons and food. They each have a single glass of milk every day; milk is now LE4.50 a kilo.

I also pay for electricity, water, transportation, phone bills; on very rare occasions I buy my daughters new clothes. Whenever one of them falls ill I have to borrow money for the doctor and medicine."

The family depends on cheap, high-calorie food. A California University Research Institute for Nutrition Technology study which surveyed the eating habits of 12 000 families in 20 Egyptian governorates shows that 32 per cent of Egyptian children suffer from malnutrition, 20 per cent are underweight and 70 per cent are anemic -- all of which hinders physical and mental growth, as well as the ability to learn. Mona Safeat, a doctor at the Medical Insurance Authority, where she is visited by hundreds of anemic children, corroborates this information: "Malnutrition is very common among students in public schools; but the healthy food I have to prescribe is expensive -- some fruits and vegetables which used to be among the cheapest are not affordable."

Even more disturbing are the findings of the Dialogue Human Rights Centre, an NGO that conducted a study on crimes reported in mainstream Egyptian newspapers from March to June 2006: poverty is the main, direct motive for 200 crimes, half of which were killings; 80 crimes were committed in Cairo Governorate, 30 in Giza.

Among the crimes: a mother who threw her baby son into the Nile because she could not afford to buy him milk; an educated young man who formed a gang to rob pedestrians; a government employee who killed his wife after she asked him for money to buy a kilo of meat.

Nor is this to be taken lightly: in a projection by Adrian White, Analytical Social Psychologist at the University of Leicester, published in September 2006 and based on the findings of over 100 surveys covering some 80,000 people worldwide, Egypt came at the bottom of the Arab list in terms of happiness and its associations -- health, wealth and access to education -- ranking 151st on the global scale, and only marginally higher than Sudan, which ranked 173rd. Likewise, the latest United Nations Development Programme (UNDP) report (2006): Egypt ranked 111th among 177 states (compare to Palestine: 100th; the Emirates: 29th; Israel: 23rd; Qatar: 39th; Libya: 64th; Tunisia: 87th; Algeria: 102nd; Syria: 107th).

According to Mohsen Zahran, Professor of Urban Planning at the University of Alexandria, the figures are alarming and should prompt immediate action. Ranking 111th has wide-ranging implications: education, health care, drinking water and sewerage, life expectancy (some 7.8 per cent of Egyptians are expected to die before the age of 40, according to the UNDP report), the use and production of technology, political life and female participation are going downhill; on the other hand, unemployment, hunger and malnutrition, illiteracy, disease, pollution, violence, crime, social inequality and pollution, by contrast, are on the rise. Over the past year alone, inflation has risen to such a degree that it now affects basic needs like food, which takes up half of the average household budget; analysts say that this has probably increased the number of the poor and those living below the poverty line, but the survey figures have not yet been updated.

"We don't need statistics to tell us the prices have gone up," Eman Lotfy, a teacher, scoffed. "It is obvious in our daily life, and in that of others around us -- doormen, maids, workers, homeless children, beggars. Most Egyptians are worried about the price of onions, which has gone up to LE5 a kilo; an egg is 60 piastres." Reflecting this, Reda Assem, a mini-market owner, complained of the instability of the prices of basic commodities, which rise on a monthly basis, he said: "Customers simply stop buying, the goods accumulate in the store and I have to sell at a discount to cover my overheads." How may the situation be remedied?

The government, claiming to be "a government for the poor", has repeatedly promised to curb inflation, with slogans like "Bread first"; "Subsidised basic commodities untouchable"; and "The free market for the benefit of the poor". Plans to raise living standards and improve public services are constantly declared.

However, Prime Minister Ahmed Nazif has recently declared, "In Egypt, we follow free-market policies and we have to accept its consequences. It is very difficult to overcome these consequences." He added that the decrease in customs will have a positive impact on consumers not in the short term, but rather in the middle and long terms.

In his annual speech before the People's Assembly a few months ago, Nazif admitted that inflation had reached 12 per cent due to the increase of international prices, bird flu and last July's rise in domestic oil prices, indicating that inflation would go back down quite soon and pointing out that what is important is that there should be an even higher rise in incomes -- which, he claimed, is already the case.

Meanwhile, Minister of Social Insurance Ali El-Mouselhy said that a number of social programmes aimed at helping the poor are soon to be implemented; by the end of the year, he announced, a database will have been established to determine the number and location of poor people. He also stressed that the ministry's strategy for the future involves increasing the number of families receiving social insurance by one and a half million, and the value of pensions received from LE80 to LE 100 per family.

Yet economists like Ibrahim El-Essawy, consultant at the National Institute for Planning, are sceptical, pointing out that the ruling National Democratic Party (NDP) has been making promises to reduce poverty for over 25 years and nothing ever materialised; the government, they insist, is more interested in businessmen than the poor. El-Essawy says government slogans are divorced from the policies on the ground, which actually encourage inflation rather than curb it: "The minister of commerce stated clearly that Egypt abides by the rules of the free market, and thus will not control the price of any commodity." Nor does it have the means to control the market, he added.

Subsidising basic commodities with LE54 billion is construed as a pretext for financial losses on the part of the authorities providing such commodities and the rise in internal public debt. As Head of the Central Agency for Auditing (CAA) Gawdat El-Malt put it while addressing the government at the People's Assembly, "Do not make the poor your scapegoat." El-Malt says it is corruption, mismanagement and wastage, as well as the launching of huge national projects without the benefit of feasibility studies, that are at the root of the LE511-billion internal debt -- no longer within safe limits -- and the LE61 budget deficit. El-Essawy further explained that of 20 commodities subsidised in the 1970s, only three other than bread remain: sugar, rice and oil. He said that free health and education will also be abolished. Out of the LE54-billion subsidy, the government declared, LE45 billion is allocated to fuel. But Magdy Sobhy, economist at Al-Ahram Centre for Political and Strategic Studies, questions that figure: "I am very confused. Given that Egypt produces oil, how come the government declares subsidising energy with LE45 billion and in the same breath raises the price of petrol and diesel oil by about 30 per cent?" Indeed according to Hamdi Abdel-Azim, professor at El-Sadat Academy for Management Sciences, it all started with that 30 per cent increase last July -- not only transportation but everything, down to medicine and pampers, house rent and electricity, went up as a result. Sobhy added that a decrease in inflation would not be well- received by businessmen, whose political and financial interests the government protects. Abdel-Azim agrees: inflation has to do with the emergence of a new class of tycoons who monopolise the market for basic commodities through exporting, importing or production; and they are supported by the government at the expense of the majority of Egyptians.

"Businessmen," Abdel-Azim lamented, "are so spoiled by the government they obtain massive privileges, but what do they give the country in return?" According to El-Essawy, the government encourages the rich to get richer, the poor poorer; it provides businessmen with loans and tax exemptions regardless of the implications of their projects for the majority. Sobhy's gloss on this is even more disturbing: in effect, the government subsidises the rich. El-Essawy, for his part, is critical of what he describes as "the lack of planning in any field". He cites the shortage of agricultural crops, a result of the fact that farmers are allowed to plant whatever they see fit. The government would remove the word planning from the dictionary if it could." Privatisation has been accelerated, he added, giving way to private-sector inflation. For his part, Sobhy cites haphazard economic policy, with strategic commodities like onions and potatoes exported without regard for the needs of the local market -- there is a blackout on export figures, he says.

Hegazy Ahmed, a taxi driver, believes inflation to be a plan of the government's intend to distract people from such issues as corruption and democracy -- the government even managed to deprive people of their values, their conscience and morality: "When you have to strive so fiercely for your livelihood you can't think of anything like ethics." Ahmed, another interviewee, was brought up in a big family of eight children; and he wanted to have a big family of his own. He has only a daughter and a son, 15 and 16, respectively: "And I cannot endure their expenses. Sometimes I almost hate them. I pay LE8 a day for bread alone." Contrary to the Sadat era, when they demonstrated after the price of bread doubled, Ahmed says, Egyptians now are cowardly and submissive. The 1977 "Bread Uprising" -- to which he refers -- Mohamed El-Sayed Said, deputy director of the Al-Ahram Centre for Political and Strategic Studies, considers the last real protest of a national issue. Since then the government has always subsidised that most strategic of commodities: bread. For her part, Hoda Zakareya, sociologist at Ain Shams University, foresees, rather, terrorism, crime and further corruption, for which poverty is an excellent breeding ground. She complains that the cheapest vegetables are now among the most expensive, citing the phenomenon of people scouring through rubbish for food: "Every day the newspapers run articles warning against inflation, but the government turns a deaf ear to the poor -- who in turn no longer believe a word the government says."

Sadly, Zakareya points out, while rich businessmen the world over play a humanitarian, charitable role in their societies -- witness Bill Gates's charitable foundation last year -- in Egypt they are controlled by greed; they suck the blood of the poor, and the state is guilty of joining them in this nasty game. They also provoke the poor through displays of extravagance. Asked why Egyptians demonstrate for Palestine and Lebanon but not against inflation, Zakareya says this is a different matter: "Egyptians will not rally peacefully raising banners that beg the government to do something about inflation -- I expect the outbreak of a massive, scary revolution, a Revolution of Hunger -- and it will start in the shanty towns and squatters' areas in Cairo." According to National Institute for Planning statistics, the inhabitants of shanty towns make up nearly a quarter of the population: 17.7 million. The poor have incredibly destructive power, Zakareya insisted, which no one is aware of because it remains latent: "Poverty means humiliation, it means suppression. What do you expect of humiliated, suppressed human beings? The rich have to take this into account. They cannot live among squatters and expect to be safe for long. They must never underestimate the power of the poor."

As poet Farouk Gouweida put it while speaking on a TV talk show, all of Egypt's political parties have shed their credibility except for one -- the Party of the Poor, for whom the various governments have never cared effectively. The government never thought of using their labour power to bolster production and provide work: "If the national banks failed with the rich, who pocket the loans and run away, they haven't once tried with the poor." Gouweida warned of the same danger as Zakareya: that thousands of Egyptians join the Party of the Poor every day due to the absence of equity and the accumulation of wealth in the hands of a new class. "Poverty doesn't include only the most impoverished, it has invaded the middle class as well -- who can stand the inflation? -- with professionals, employees, farmers, and workers left helpless. They do not protest because they are busy surviving." Yet no bank has been established for the poor. The poet referred to Bangladeshi economist Mohamed Yunus's Grameen Bank, which won him the Nobel Peace Price last year. "We should learn from others," he said, "rather than buying into the official fairy tales of subsidy or complaining of overpopulation."

The story of a shanty town

BUILT by Gamal Abdel-Nasser and named after him, Mansheyet Nasser is one of the biggest ashwa'iyat (shanty towns) in Egypt, and one of the poorest residential areas, with 550,000 inhabitants on six square kilometres. Al-Douweiqa is the poorest part of Mansheyet Nasser: residents live in three-square-metre rooms practically inside a mountain, without the benefit of basic services like potable water and sewerage -- which is drained into mud channels dug into the surface of the narrow streets to be eventually disposed of. Water comes from public taps controlled by individuals who charge money per gallon of water. Nearby, Al-Zabbalin (the Rubbish Collectors') sends noxious fumes into Al-Douweiqa from burning rubbish, and the smell mixes with that of human waste. Stories of death and sickness abound, as do those of Christian missionaries offering help to Muslims. Landslide frequently cracks and even demolishes some of the living quarters; the cracks conceal scorpions. When fires break out, they cannot be extinguished because the fire engines cannot make it into the narrow passageways.

Sanaa, who lives in such a room, was over the moon because she had received a bed from a charitable association. The room had been completely bare except for two blankets for her and her six children. Sanaa and her children collect plastic containers and sell them for 75 piastres a kilo; she makes LE100-130 a month. Sanaa is divorced; her ex-husband, a vegetable vendor, will not pay the expenses of his children. "I want to move from the mountain as soon as possible," Sanaa said. "I'm afraid of losing another child; five years ago I lost a daughter who died from a scorpion bite. But thank God the next year I gave birth to two twin girls." Another child, seven, has leukemia: "I take him to the hospital twice a week for chemotherapy. The doctor said to feed him well -- meat and fruit. He said his health depends on it. So I told him that means he will die, then. May he die peacefully. There was no way I could afford such food." Sanaa's priority is her children's education; they all attend school. Like many of her neighbours, Sanaa believes this is the only way out of poverty -- yet, tragically, this is no longer easy, or true. According to Aziz Afifi, a member of the board of the Engineering Group Association for Aids, an NGO working in Al-Douweiqa, a mafia of private tutors who blackmail the parents exists in the public school: only those who pay LE50-70 a month will see their children pass the exams, regardless of their actual results. "Sometimes," Afifi explained, "the result sheet would include failed students, who would miraculously change once their parents paid the tutors." Some even sell what little furniture they have to pay: "The result is that it's very common for students who have reached the final year of prep school to be unable to read or write; some could not even write numbers." The NGO provides free private lessons for primary and preparatory school students in all subjects: "The teachers start with a literacy class; we hire them from nearby areas because those in the local schools cannot cooperate with us because they are threatened by the headmaster... They have even threatened the students who come to our classes."

Who are the poor?

ACCORDING to recent UN criteria, the poor are those living on less than US$2 a day (that is, LE11.4 a day, or LE342 a month); those on less than US$1 a day are below the poverty line. The latest Human Development Report (2006) estimates that 44 per cent of the Egyptian population -- about 35 million people -- are poor; but experts say the number is far higher now, especially in the light of recent inflation. In 2003, the report says, Egyptian average income was $1,220 compared with $2,611 in other Arab countries; the 10 per cent rise government employees receive counts for little in the light of inflation rates. According to the Egyptian Chamber of Commerce, the prices of basic commodities like vegetables, fruits, meat, oil, rice, sugar and milk have witnessed an unprecedented increase of up to 160 per cent over a single year (2006); the Ministry of Development's own estimate is 153.5 per cent. It is worth noting that the same commodities had risen by no more than 50 per cent over the previous 14 years. Official statistics indicate that Egyptians spend up to 40 per cent of their income on food. According to the latest survey of the Central Agency for Statistics (conducted all the way back in 2001), the poor spend 57.7 per cent of their income on cheap, calorie-rich food -- bread being the main source, followed by sugar and oil -- and 10 per cent on education. A Shura Council Financial and Economic Committee report estimates that families spend up to 30 per cent of the household budget on education, particularly private tuition, which amounts to LE15 billion annually.