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| --Tech & Moderator Notes |
| Egypt expects to up energy subsidies, maintain food subsidies ($10b on fuel in 2009) |
| 2011-02-03 |
| Egypt is suffocating under the weight of massive state subsidies - $11b ($1 = 6 Egyptian pounds) per year on subsidized fuel alone, and $2.67b on subsidized wheat (totaling 6.5% of its GDP of about $200b). The problem for Mubarak is that he needs to wean the public off these subsidies because of their escalating costs. The demonstrations may have been sparked by a move to cut fuel and food subsidies. According to Beltone, the government spent LE 63 billion on petroleum subsidies during fiscal year 2009/2010, 40 percent of which went to diesel and 22 percent to butane, and this figure is expected to rise to LE 67.7 billion by the end of the current fiscal year. |
| Posted by:Zhang Fei |
| #5 After which the masses get the uppity idea that they're smarter than the idiots in the stifling government bureaucracies. Then comes the revolution. Which is why Hosni won't take Zhang's advice. The Chinese Communist Party seems to have pulled it off without losing power. If the bulk of the population benefits, even if some benefit more than others, there are not enough real hardship cases to form the ranks of people who want to revolt. This is why the Chinese Communist Party is still standing - most people have benefited, such that only a fringe are deprived enough to risk their lives taking on the government. |
| Posted by: Zhang Fei 2011-02-03 23:56 |
| #4 Hosni is already hosed. If he moves, he will make them too late. Game is all over except for the crying. |
| Posted by: Alaska Paul 2011-02-03 23:17 |
| #3 After which the masses get the uppity idea that they're smarter than the idiots in the stifling government bureaucracies. Then comes the revolution. Which is why Hosni won't take Zhang's advice. |
| Posted by: Steve White 2011-02-03 20:46 |
| #2 "now now - let's not get too far ahead of our Egyptian selves. If they have increased wages, soon they'll want clean water and sewerage systems. Imagine!" |
| Posted by: Frank G 2011-02-03 19:38 |
| #1 Notice that Egypt's food and fuel subsidies are 10x the military aid Uncle Sam provides. These subsidies are the numbers that will make or break Mubarak, not the measly amount of military aid we provide him. What he needs to do is open up* segments of the economy Chinese-style to foreign investments in light industry. There is no reason that clothing currently labeled Made in China or Vietnam should not be assembled in Egypt. Egyptian wages are way lower than China's (min Egyptian wage per month is $6.50, compared to $100 for many Chinese cities), and its close proximity to Western end markets ought to be a real advantage. * Egypt's ultimate problem, like that of many Third World countries, is that the economy is relatively closed to competition. The real benefit of East Asian-style export-driven growth is political - governments do not have to stage knock-down drag-out fights against the interests representing minuscule but powerful domestic monopolies, since the markets being fought over are not only foreign (i.e. Western), but massive and unregulated (from the standpoint of market shares not being allocated based on political pull, as in most Third World countries). |
| Posted by: Zhang Fei 2011-02-03 19:21 |