Study On The Contemporary Egyptian Food Subsidies

Due to lack of supply and the implementation of rationing, subsidy system in Egypt came out at the World War II period, when Egypt was in troubled times. Subsidy system has been settled at Nasser times in 1950’s, then expanded at the reign of Sadat, and continuously adjusted in the reign of Mubarak. After development of decades, it came into being a large and complex system which includes food, energy and etc. Among various subsidies, food subsidy bore more blame about disadvantages to economy, because of its visible every-day effect. It related to livelihood of people directly and affected almost everyone in everyday. The food subsidy of Egypt could divide into two main parts: bread & flour subsidy and ration card subsidy. Three main factors of Egypt food subsidy are social welfare goal, unacquirable food self-sufficiency, and the American food aid. Although food subsidy could help a lot in keeping social stable and buffer the price shock, it also got huge encumbrance to Egypt financial at the same time. The cost of subsidy increasing brings a big trouble to government. The government has been adjusted the food subsidy, like decreasing items, at both Sadat and Mubarak times, however, it only draw strong opposition. Once government touches food subsidy it will excite the financial and social problem that long-term accumulated. Then the emotional people may come out to street and blow of their steam.What seems to be owned by the low degree of self-sufficiency of cereal that cannot fulfill people’s needs. Actually it reflected that concentrating of industry development give rise to the slow development of agriculture and unbalanced economic development. In the process of modernization, government accumulated the capital of industry development by low wage. But they couldn’t built a modern industry system, which led to low labor productivity and high unemployment rate. In case of stable society, government made the subsidy up for low salary. For a long time, food subsidy institution has been became a symbol of social compact between Egypt government and their people, that also permeated into most part of Egypt such as polite, economy, and society.