Following recent talks concerning increases in electricity prices and Egypt’s initial US$12 billion deal with the International Monetary Fund, President Abdel Fattah al-Sisi said in a speech Saturday that the Egyptian economy has long suffered, given the country’s history with wars in the 1950s and 1960s.
During the inauguration of a petrochemical company in Alexandria, Sisi explained that terrorism and corruption have been additional burdens on the Egyptian economy.
“We did not start suffering from terrorism in the past two or three years. How many times has Egypt been hit hard by terrorism? How many times has it been attacked after attempts of recovery?” the president asked. “Terrorism is a tool used to harm the Egyptian state by weakening it.”
Sisi added that he is keen to confront corruption, but that it remains a major challenge to improving the Egyptian economy.
The president moved to explain that the 2011 revolution had as many detrimental effects on the economy as it did positive ones. Approximately 900,000 state employees joined the bureaucracy following the revolution after demands and protests to obtain fixed contracts, he pointed out.
“When we raise annual salaries from LE90 billion to LE228 billion now, how is this going to affect the economy?” he asked.
He also added that public debt has skyrocketed from LE800 billion in 2011 to LE3.2 trillion today, amounting to 97 percent of Egypt’s GDP.
Commenting on rising electricity prices, Sisi said that the new hikes consist of a LE1.5 increase for consumers for every 50 kilowatts, while the state will continue to subsidize 28LE per 50 kilowatts. The government has invested LE400 billion to support the country’s electricity network, he added.
“When the government worked on raising the minimum wage, you said this is too little. But when we raise electricity prices or metro tickets, you say this is too much. Do your pounds have a value and our pounds don’t?” he asked. “Do you know the real economic cost for a metro ticket? Not even LE10. The last increase in metro tickets was 12 years ago.”
Sisi also blamed previous governments for not having enough courage to take serious measures toward lifting subsidies. “They feared public reaction, but I took these decisions without hesitation.”
Sisi referred to a decision by late President Anwar El-Sadat to lift food subsidies in 1977 that was later overturned due to widespread rioting, saying, “Reforms have been postponed since then due to fears of the public opinion reaction.”
“But Egyptians will stand by me, only for the sake of Egypt,” the president declared.