Sisi’s popularity shrinks as Egypt’s reform drive picks up

Sunday 09/07/2017
Making ends meet. Egyptians buy sugar from a truck in Cairo. (AFP)

Cairo- Tough economic reforms are causing Egyptian Pres­ident Abdel Fattah al-Sisi to lose much of his popu­larity, threatening his prospects in next year’s presidential election and could lead to unrest, experts said.
“The president has lost most of his popularity because of the inten­sity of the reforms,” said Hassan Na­faa, a political science professor at Cairo University. “Millions of peo­ple suffer from the negative effects of the reforms on them.”
Sisi came to power following four years of political unrest and eco­nomic devastation. He said he had no option but to reform the econo­my to reduce a growing budget defi­cit, bring down the huge public debt and save the national currency.
The deficit in the fiscal year that ended in June amounted to 30%, public debts reached 107% of Egypt’s GDP and the Egyptian pound lost ground against foreign currencies.
To bring the economy back on track, Sisi significantly slashed fuel, water, electricity and transport sub­sidies, floated the national currency and requested a $12 billion loan from the International Monetary Fund.
Nonetheless, the reforms, the last of which were initiated on June 29 and included a cut of more than 30% of fuel subsidies — bringing total fuel subsidy cuts to more than 80% — sharply increased commodi­ty prices, causing millions of people to descend into poverty and further devalued the pound.
Before the flotation, one US dollar sold for 8.8 pounds at local banks. It now sells for 18 pounds. The na­tional poverty rate rose to 27.8% of the population and commodities are three times what their prices were before Sisi became president in June 2014.
Economists attributed this to “misguided” policies followed by Sisi’s government. They said in­stead of stimulating production, at­tracting investments and reducing corruption, the government slashed subsidies and raised taxes.
“The reform course chosen by these governments is causing com­modity prices to surge, consumer inflation to rise and individual in­come to be dwarfed by commod­ity prices,” said Amr el-Gohary, a member of parliament’s Economic Committee. “Social protection pro­grammes are even far from enough to shield the poor against the effects of the so-called reforms.”
The consumer inflation rate is 34% but such a downside from the reform is met by more government spending on social protection. On June 21, Sisi raised subsidies within the national food ration system by $4 billion, increasing the amount of money specified for food ration stamp holders by 150%.
The reforms are increasing an­ger at the president, even as some people concede they are inevitable. Vehicle fuel prices were raised more than 30% on June 29. The price of butane gas cylinders doubled. The government said the cuts would re­duce energy subsidies by $2 billion annually, an amount to be chan­nelled to health and education.
Social media reaction to the deci­sion was very negative. Nafaa said this had not translated into street violence because of fear of a harsh response from authorities.

“The public will most likely show this anger in the next presidential election by not voting for Sisi,” Na­faa said. “Economic conditions are witnessing unprecedented deterio­ration and I think he will pay for this in the election.”
When he led the army in pro­tecting Egyptians’ uprising against Islamist President Muhammad Morsi in 2013, Sisi was perceived as a national hero. Now, however, his tough economic policies are appar­ently causing some people to turn away from him.
Sisi does not seem to care about his popularity ratings. He has said numerous times that he cannot de­ceive the people just to be popular.
In April, he said he could have opted for a reformless course, noting that his aides warned him against the effect of the reforms on his popularity. “I cannot leave my country to go down the road to destruction to save my popularity,” he said. “I have opted for the course that will give my countrymen a bet­ter future.”
Some of the reforms are paying off. A depreciated pound is causing an unprecedented surge in agricul­tural and construction material ex­ports while imports are down. Be­fore the reforms, Egypt was on the edge of bankruptcy with foreign currency reserves at $14 billion, the lowest in two decades. Reserves have rebounded to $32 billion.
Sisi also ended Egypt’s acute elec­trical power supply deficit, made the country more secure and is re­turning Cairo to regional and inter­national political arenas.
Sisi has not said whether he would seek a second four-year term in the June 2018 presidential elec­tions. There is no formidable com­petition to him yet, but hard living conditions, Nafaa said, may lead the public to seek an alternative.
The president’s backers say in­stead of making Sisi lose popularity, the reforms are gaining local and in­ternational respect.
“Sisi is doing what should be done to reform the economy,” said Tarek Fahmi, another political science professor from Cairo University. “He is literally putting his political future in danger to rescue his coun­try from bankruptcy. The people are aware of and respect this.”