President Abdel-Fattah al-Sisi reiterated on Saturday that Egypt is facing major economic challenges, saying authorities and citizens must work together and embrace reforms to overcome such dire conditions.
“We need to cooperate together, as a nation, to face the current difficult economic conditions,” al-Sisi told Egyptians during the inauguration of a petrochemical complex in Alexandria.
In the televised speech, al-Sisi talked about coming economic reforms, including reforms of subsidies.
His statement comes a few days after Egypt and the IMF reached an initial deal for a $12 billion fund facility over three years, expected to be approved by the fund’s executive board as well as the country’s parliament in the coming weeks.
The Egyptian economy in the course of 60 years, al-Sisi said, has been hit with several blows due to wars, including the 1956 war, the Yemen war, the1967 war, and the 1973 war.
What also added fuel to fire, al-Sisi said, is the perennial terrorism that repeatedly took a toll on tourism. Moreover, an increase in state salaries had led to an EGP 600 billion increase in domestic debt throughout the past four years, he added.
According to al-Sisi, salaries rose from EGP 80 billion before the 2011 revolution to EGP 228 billion yearly after it, raising domestic debt from EGP 800 billion to 2.3 trillion pounds, or a rate of 97 percent of GDP.
He added that 900,000 people have been appointed in the public sector, even though the sector doesn’t need such so many employees.
al-Sisi said that the first attempt to introduce economic reforms was in 1977, during the presidency of Anwar El-Sadat, who introduced austerity measures, including the removal of subsidies on basic goods.
The country then witnessed large-scale popular protests, known as the “bread intifiada,” leading the government to retreat on the measures.
Succeeding governments were afraid to enforce such measures, El-Sisi said, stressing that he will do whatever necessary to improve the economy.
“All tough decisions that many hesitated over long years […] to take, I will not hesitate for a second to take,” he said to applause.
He added that whatever procedures the government would undergo, they would always keep an eye on the “humble citizen.”
As pointed out in several speeches, al-Sisi said the subsidies would be “rationed” to go to those who are “worthy,” without giving much further detail.
He said that the government would inform people about the procedures that would be taken in a press conference, just like the hike in electricity prices last week.
al-Sisi defended the new tariffs for household consumers as a part of the government’s plan to phase out energy subsidies, justifying that the “simple increase” in tariffs of household brackets would save the state budget EGP 20 billion.
This is not the first time this month that the Egyptian president has discussed economic reforms.
Earlier in August, he said that “unneeded” and “indiscriminate” subsidies affect the state’s budget.
According to al-Sisi, the government is currently working on preparing a system to ensure that subsidies are only granted to those who deserve it.
The government plans to slash its total subsidy bill in the new budget by 14 percent in the current 2016-2017 fiscal year, but has refrained from specifying when and by how much fuel prices would rise.
al-Sisi also discussed the ticket prices of the Cairo metro, saying that the last price increase was twelve years ago.
Egypt has repeatedly said it would raise the price of metro tickets to offset annual losses, but has not yet followed through.
A one-way ticket of any distance costs EGP 1. However, the real cost for the metro ticket is more than EGP 10, El-Sisi said on Saturday.
New housing, cities by 2018
During the speech, al-Sisi shed light on accomplishments that he said have been made in the past two years, promising more achievements through a completion of several projects by mid-2018, the end of his first presidential term.
al-Sisi said that 70,000 km of roads and highways will be completed by the end of the period.
He also discussed government housing, saying that by mid-2018 four to five million Egyptians would live in 800,000 to 1,000,000 residential units provided by the government.
al-Sisi also said that 2018 would be the end of “unsafe informal settlements”, promising housing for an additional 850,000 to 1 million Egyptians in a separate project of 150,000 residential units.
Both housing projects will cost the country EGP 180 billion.
He added that by mid-2018, the government would be done with planning and executing a number of new cities, including four new cities in Upper Egypt.
He also discussed water treatments projects, the completion of new metro lines, and development in Sinai – all to be complete by 2018.
“The goal was to handle responsibility and we should handle it together,” al-Sisi told Egyptians by the end of the speech, before addressing Egyptian women and asking them to cut down on costs “that could be a burden on Egypt’s economy in their households.”
al-Sisi also said that by mid-2018, Egypt will have embarked heavily on water desalination, saying 10 million cubic metres of waste water coming from sewer systems, agricultural irrigation and industrial facilities will be recycled.
Another one million cubic metres from the Rea Sea water will be desalinated. he said. The target is to add to provide 3.5 billion cubic metres of water per year, al-Sisi said.
Egyptian officials and experts have long worried that Ethiopia’s under-construction Grand Renaissance Dam will diminish the country’s 55 billion cubic metre-share of Nile water, although al-Sisi, who has visited Ethiopia and addressed the country’s parliament, has told citizens “not to worry” about the project’s impact.
*The official exchange rate for $1 = EGP 8.78
source: Ahram Online