Amid Economic Crisis, Even Sugar Becomes A Luxury In Egypt

Enlarge this image toggle caption Amr Nabil/AP Amr Nabil/AP

At the huge weekly market on the outskirts of Cairo, live chickens crowd wooden cages next to tables piled with ruby-red pomegranates, deep-orange persimmons and baskets of fresh dates from the countryside.

But as Egypt endures its worst economic crisis in decades, many shoppers can barely afford the tomatoes and cucumbers that are a staple of the poor. They hurry past to a nearby square in the hope of buying cartons of government-subsidized food.

Egypt is the Arab world's most populous country, with more than 90 million people, and one of the world's biggest food importers. The protests that swept Egypt and the Arab world five years ago and frightened off foreign investors and tourists collided with decades of a deeply inefficient, state-controlled economy.

After the Egyptian government loosened exchange rates this month, the official value of the Egyptian pound plunged by almost half. One U.S. dollar bought less than nine Egyptian pounds before the devaluation, and these days buys more than 17 pounds. That means that anything imported — from sugar to medicine — became much more expensive and many items disappeared from the market.

"I went to all the shops and even if you can afford to buy sugar you can't find it," says Saleh Attiya, a furniture maker out shopping with his son.

"A kid like that — how will he drink his milk without sugar?" he said, pointing to 6-year-old son, also named Saleh. Attiya the father freely admits that his own missing teeth could be due to his habit of drinking each small glass of tea with four or five spoons of sugar. But for millions of Egypt's poor, sugar has been the only luxury they could afford.

To ease the hardship of rising prices and broad subsidy cuts required by a $12 billion bailout from the International Monetary Fund, the Egyptian government sent the army into neighborhoods with 8 million food boxes at bargain prices. Egypt's official figures indicate almost one-third of Egyptians are in poverty, defined as living on about $50 a month or less.

Near the weekly market, a crowd of Egyptians, many of them elderly, crowded around a truck with subsidized food packages for sale. They sold out within minutes, leaving people shouting, "I want a carton!" and holding up tattered bills even as soldiers slammed shut the doors of the empty truck.

The lucky ones walked away with a cardboard box containing margarine, macaroni, beans, tea, sugar and tomato paste. All for about $1.50 — less than half the normal price.

Enlarge this image toggle caption Nariman El-Mofty/AP Nariman El-Mofty/AP

The IMF loan is part of a wider economic restructuring aimed at encouraging investment and creating private sector jobs.

The plunge in the currency has also sparked a shortage of medicines in pharmacies and hospitals, from contraceptives to cancer medicines. With Egypt's weaker currency, it costs companies nearly twice as much to import drugs. They are selling some at the old prices, but some have stopped importing pharmaceuticals altogether.

The Egyptian government is negotiating an emergency plan with the pharmaceutical industry in which it would subsidize essential drugs. In the meantime, some Egyptians have set up an informal market on Twitter — offering to sell or give away extra insulin and other drugs to people in need.

Even Egypt's upper classes have been hurt by the currency plunge. At the American University of Cairo, popular among middle- and upper-class Egyptian families, students held a sit-in last week at the prospect of sharply higher tuition.

Upscale online supermarkets normally full of imported foods are now full of "out-of-stock" notices instead.

Many economists have welcomed the measures to overhaul the economy, but say they need to be part of structural rather than cosmetic change that would make it easier for companies to invest in Egypt and create jobs.

"We are a country with limited resources and we have to make choices on spending," says economist Ziad Bahaa el-Din, a former deputy prime minister in Egypt.

The economic crisis has had political implications. Some Egyptians, who remained silent as security forces killed hundreds of protesters and imprisoned thousands more over the past three years, now openly criticize the government.

Egypt's current government, led by former army general Abdel-Fattah el-Sissi, took power after a military coup toppled the previous elected government.

"You did not wake up because of the blood and now you are because of sugar and rice?" writes Mohammed Abo El-Gheit, a columnist for al-Araby al-Jadeed.

El-Din, the economist, says despite the economic misery, he isn't expecting unrest.

"On the whole, Egyptians after five years of political change do not have a lot of appetite for dramatic change and most people are really willing to endure a lot to avoid other forms of turmoil," he says.