gypt seems to be entering into a vicious circle where politics are impacting negatively on the economy while economic policies and performance add to the fuel of political instability. Street politics that have been driving the Egyptian scene for the past two years seem to be giving in for a more powerful engine — the economy — that is slated to shape the country’s future in the short-term at least.
Two developments have taken place recently to support this claim.
The three main rating agencies have downgraded Egypt’s economic performance describing the outlook as ‘negative.’ (...)
However, all eyes will be focused on the wheat production this year to see whether the hopes of a bumper crop will materialize, thus reducing the possibility of facing up to the tough choices of spending more on wheat imports or reducing the bread subsidy, which amounts to a political suicide given the current inflammable climate.
Memories are still fresh about the famous Cairo riots of 1977, when the late President Anwar Sadat curbed the bread subsidy, and smaller riots in 2003, and five years later, which were both driven by high food prices and low wages and salaries. That in the end led to the food subsidy program.
Alsir Sidahmed / Arab News