Egypt election 2018: Sisi's statements contradict the facts on the ground

CAIRO —  Promises galore as Egypt's military strongman Abdel Fattah el Sisi is most likely elected for a second presidential term. Egyptian officials often come up with empty statements: the economy is stable; and people should not worry about their welfare as they will soon notice a remarkable improvement in their lives.

Such announcements are out of step with reality. Egyptians are still struggling to make ends meet and provide for their families. 

An economic downfall amid political instability led to the ouster of conservative  president Mohamed Morsi in July 2013. Ever since then, the new Sisi government has tried to jump-start its ailing markets and economic output. 

"My monthly income was slashed to less than half of what I was making last year,” Nasser al Sayed, a taxi driver from the Maspero triangle in one of the slums in downtown Cairo, told TRT World.

The father of four children, Sayed explains that people rarely hire taxis as they prefer cheaper transportation such as public buses to reduce costs.  

As business is slow, Sayed’s foremost concern is feeding his family. 

Their meals, he says, have been reduced to cheap cheeses and beans. 

"Sometimes it could take months before we can afford meat," he says. 

He has stopped paying for his children’s private tuition, despite the low-quality teaching they receive in public schools. And Sayed struggles to pay his water and electricity bills, which he considers too high for a house with only one bedroom and a living room.

“Years ago I could live on a monthly budget of less than $30 (EGP 500 ). My modest dream was to move to a bigger house in a better neighbourhood and to buy a new taxi instead of my current car which costs me repair expenses,” he said.

In November 2016, the International Monetary Fund (IMF) approved a three-year $12 billion loan for Egypt, a move intended to boost the collapsing economy. The IMF also demanded the currency be floated to overcome the country’s foreign exchange reserve shortage.

Tough living conditions followed the state's reformist economic policies which included a series of decisions, from reducing subsidies on energy to devaluing the local pound. 

More than a year later, these moves have cast a shadow over the lives of the underprivileged and middle classes, in a country where at least 28 percent of the population lives below poverty line, according to 2016 official statistics. 

The common perception among Egyptians is that prices have increased hugely. And official indicators of economic growth and GDP figures do not reflect people’s real living standards.

The middle class too has been hit by the wave of price hikes.  Many of them have been forced to cut their spending and have given up on what are now considered “luxury goods.”

Mohamed Salah, a 33-year-old accountant, said his life “was turned upside down” when the government relaxed controls on the Egyptian pound, letting markets decide on the currency's value.  He said the middle classes had already been facing challenges since the 2011 revolution, and the toppling of Egypt's long-time dictator Hosni Mubarak had caused countrywide economic instability. 

The government’s new economic policies have put young Egyptians with supposedly stable jobs in a precarious situation, Salah argued.

“Most of us relied on previous savings to support our monthly incomes but after the flotation (currency devaluation), our savings lost nearly 40 percent of their value, and so did our salaries. At the same time, prices increased by more than 50 percent especially that the flotation was accompanied by decisions to increase customs and VAT,” Salah said.

Salah assumed the government would enforce parallel policies aimed at protecting citizens such as salary increases and the expansion of free services provided by the state. But the situation turned out to be worse than expected," he said.

“At this stage even salary increases won’t be good enough since the labour market is degrading and all the capital is being poured into the state’s megaprojects,” he said.

As the government has been spending less on public services while raising the prices of energy, water and electricity, poverty is expected to increase.

Journalist Wael Gamal, who specialises in economic affairs, explains that the system adopted by the Egyptian government is based on a vision for economic growth and better conditions for all citizens, disregarding the fact that only rich people have benefitted from such policies ever since the Mubarak regime.

Instead of offering subsidised essential services, the government replaced subsidies on energy and food with cash subsidies, directed at the poor. 

But the cash-to-poor policy backfired, according to Gamal. The subsidies did not reach the poor, citing reports of corruption in the government.

“Actually, low-income citizens saw their social protection is shrinking. Cash subsidy is non-proportional to increasing inflation rates in front which government-provided cash becomes of minor value,” Gamal said.

While the middle classes and the underprivileged share the same reasons for their struggle, speculation is rife that the middle class will “disappear,” or in other words merge with the working classes.

“Certainly, recent policies negatively affected a sector that was previously quite stable,” Gamal said. “However, their endurance cannot be compared to the vast majority of Egyptians living on less than $60 a month (EGP 1,000)."

Another question is whether the Egyptian neo-liberal economic model put forward by an oppressive political regime would achieve the desired results. Since 2014, the state has led a crackdown on political opposition, freedom of expression and vehemently attacked the press. Hundreds of youth were imprisoned and human rights defenders say the trials lack transparency, both in civilian and military courts.

“It does not look promising,” said Gamal. “Such models have historically showed little success, further challenged by keeping up with the trending global economic crisis in the past years. But what does economic success mean without freedom or satisfaction? Only more socio-economic inequality.”

Several experts believe the IMF loan is only a means to an end to solve the economic crisis. The government policies were supposed to adopt IMF's requirements, including lowering the budget deficit and raising production to create jobs, especially for women and youth, and protect the most vulnerable groups in society during the process of adjustment.

But the data points to a disturbing reality. Egypt’s youth make up more than 20 percent of the population. Among them, 27 percent are unemployed, according to the Central Agency for Mobilisation and Statistics (CAPMAs).

With presidential elections taking place between March 26-27, the Egyptian people have been exposed to the government's blatantly wrong statements which highlight so-called economic achievements. 

Brushing aside the lingering issue of increasing poverty and the shrinking middle class, the government is adamant on spending large sums on building what it calls "new administrative capital," which costs a whopping $45 billion. 

The Egyptian people purchased investment certificates for the Suez Canal expansion, which cost $8 billion, hoping to be reimbursed after its completion. But the reports suggest hardly anyone has been reimbursed so far. 

In a TV interview, Sisi was asked what benefit national projects brought to the people and about the continuous price hikes. 

But Sisi carried on with his monologue, boasting about his governance, saying services provided to people have improved. He cited how gas cylinder prices have dropped to 30 Egyptian pounds per piece, while it's available at 130 Egyptian pounds.

The country is staring at a new wave of price increases in the near future, particularly in fuel, transportation and electricity.

“I hope the day will come when I can provide for my family without being in debt,” said al Sayed, the taxi driver.