Egypt’s most vulnerable households don’t have enough money to buy food, clothes and shelter.
That’s the frightening conclusion of the Egyptian Food Observatory’s latest government survey.
Of the 1680 households surveyed (and 7532 household members) in September 2012, 86% said their income was insufficient for covering total monthly needs including for food, clothes and shelter, up from 74% in June 2012.
As food prices have steadily increased over the year, income levels have remained static as the country’s fragile economic climate impacts salaries.
The knock-on affect of this has left many families adopting increasingly extreme coping strategies, the report says, the most common of which has prompted families to consumer cheaper foods and borrow food or money.
The report says:
“Consuming cheaper food items” overtook “borrowing” relative to the previous quarter, suggesting that vulnerable households are adopting more radical coping mechanisms where incomes do not suffice.
Other coping strategies adopted included; reducing food intake either by reducing food portions or the number of meals, buying on credit.
But then we reach the heart of the Egyptian food problem.
Bread and other carbohydrates make up the bulk of vulnerable households’ daily consumption. Bread subsidies, already widely recognised as imbalanced and unequal, are contributing to this food divide.
The report spells out the biggest flaw in the subsidy system:
All Egyptian citizens are entitled to three loaves of subsidized “Baladi” (local) bread per day. But there is no database listing households entitled to the subsidy, and thus no control over how much bread each person can access.
Anyone can queue at bakeries licensed to produce Baladi bread and can purchase up to 20 loaves at a time at the subsidized price of 5 piaster per loaf. Better-off Egyptians often do not take up this entitlement due to the queuing time involved and the poorer quality of subsidized to commercial bread.
In addition, the ingredients for making this bread are purchased at low or no cost from the government, but bakers charge their customers a similarly low price of 5 piaster that is barely sufficient to cover their production costs. It has forced the creation of an unofficial black market for premium quality local wheat that is free of stones and contaminants. This wheat is used to produce better quality bread for commercial sale at 25 or 50 piaster per loaf, depending on the quality.
Aside from providing further evidence of how the country’s subsidy system wastes billions of dollars, this report highlights the human cost of misdirected, ill-thought-out subsidies.
It is well known that any limitations to Egypt’s water supply, a vital resource and sometimes a matter of national security, has been aggressively opposed by officials keen to protect the Nile’s badly needed fresh water.
But in the aftermath of the January 25 revolution in 2011, it is becoming increasingly clear that Egypt is not only squandering its water supplies to the detriment of other African countries who get a much smaller share of the river’s water, but that Egypt’s growing population is demanding more water to cover its unsustainable farming practices.
Ten countries are involved in a decades-long conflict over Nile Water rights and billions of cubic metres of water. On one side, seven East African countries want more water from the Nile, and on the other stands Egypt and Sudan, who get 90% of the river’s water under colonial-era accords and strongly oppose the move.
It is no surprise then that Egypt has repeatedly said it will reject any deals that do not preserve its historic, and dominant, water rights.
Just this week, Egyptian minister of irrigation and water resources Mohamed Bahaa Eddin said the country refused to sign the Entebbe Framework Agreement, which would redistribute Nile water shares among Ethiopia, Rwanda, Uganda, Kenya and Tanzania.
Even though Egypt get’s the lion’s share of water, which stands at 51 billion cubic meters annually, the quota still does not satisfy its needs.
In fact, the country indicated this week it needs another 7 billion cubic meters to meet domestic demand.
Rebel Economy spoke to Karim Assir of the Signet Institute, a Cairo-based think tank, on why Egypt’s demands to not only keep its dominant share of water but also fight for more underlines deeper problems for the country. [Text within square brackets are additions by Rebel Economy]:
How does Egypt use water inefficiently?
Karim Assir (KA):
The choice of using flood irrigation [a dated method of irrigation where gallons of water are literally pumped over crops], as well as the choice of cultivating water inefficient crops, and the agricultural sector puts the biggest strain on this country’s resources.
I think anyone who lives in Cairo also sees the way water is used improperly each morning, when shop owners and bawabs [the Arabic word for "doormen"] hose down cars and sidewalks, and while this may be just an anecdotal example it highlights a major issue which is that water is not viewed as a scarce resource here.
In addition, the wealthier Egyptian households become, the more water they will likely consume water directly – i.e. through heavier use of household appliances, landscaping etc, or indirectly, i.e., through consuming more food, products which have heavy water footprints.
What is the biggest strain on water resources?
KA: Wheat crops require lots of water. As does rice and other staples of the Egyptian diet, but demand for these crops is also very high. It is not be a good use of the country’s resources to become self sufficient in these crops. [That is despite calls from the government to move toward self sufficiency and boosting domestic production to lessen the burden on imports].
The natural water resources that Egypt has (Nile and groundwater resources) available are put under stress by a growing population, and given that this dynamic won’t change in the future, the problem threatens to become more severe. The majority of Egypt’s population is settled inland, along the Nile, which makes supplementary sources of water like desalination a less viable option for the Egyptian government, since water would have to be pumped from the coast and would add significantly to its cost.
The tariffs on water do not help. As with everything here, water is subsidised. Egyptians pay about 20% of the actual cost entailed in producing and delivering water to households.
How can the state alleviate these pressures and inefficiencies?
KA: The government’s approach to water scarcity has been inaction, as with many other issues, and their options are limited. However, one proven way to begin limiting demand for water is to increase its price, so that’s one place they could start. Encouraging the cultivation of water efficient crops and landscaping would help. Also, Egyptians need to be made aware that water is scarce, otherwise they really have no incentive to use it more efficiently.
All these factors combined make it difficult for Egypt to argue that it should maintain its share of the Nile water, let alone ask for more, since other Nile Basin countries face similar structural problems and high demand for water.
Even though water is subsidised and cheap for all to use, like Egypt’s other subsidised goods (oil, gas and food), the richest reap the benefits. Water inequalities have become more stark following the revolution and slums across the country are suffering from lack of resources.
If Egypt wants to viably argue for a better deal with its African neighbours, the best place to start is at home. Increasing the price of water would instantly mean a reevaluation of farming methods. Flood irrigation would be limited and therefore the types of crops grown would change. Part of the problem is mismanaged food subsidies and an agricultural sector that has to import wheat to meet demand. If this system was overhauled, it would alleviate pressure on farmers providing subsidised bread.
Of course, this must happen in unison with a framework of policies that will provide new crops in place of the old, and deep education for Egyptians to highlight that water is a non-renewable resource that does not flow endlessly.