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