By May 28, 2013 Read More →
Debating Energy Subsidies in Egypt

Debating Energy Subsidies in Egypt

The Egyptian subsidies regime is an economic and political minefield. Fiscal transfers that swallow up, by some estimates, around 25 percent of state expenditures are patently unsustainable – but with forty percent of Egypt’s population on or below the poverty line ($2 per day), these subsidies form a vital lifeline for Egypt’s poorest. So while the state can’t afford to keep paying out, it cant risk drastic cutting back, either. Often forgotten in the debate is the wider context in which these transfers occur: subsidies for food and fuel have traditionally been deployed by the state as part of the Nasser-era social compact, in which Egyptian citizens traded political rights in exchange for economic ones. Thus is the subsidy regime intimately tied to popular perceptions of the state’s legitimacy – although the latter’s ability to pay out is increasingly tenuous. As the debate over how to reform an inefficient and corruption-riddled system rages on, Farah Halime at Rebel Economy reviews the Morsi’ government’s performance, arguing that

In fact, major government measures have actually aggravated the problem. 

How so? Continue reading Reinventing Egypt’s Energy Subsidies

Posted in: Egypt, Middle East

About the Author:

William Oliver is Nabateans’ editor for international economics and Middle East current affairs. He obtained his degree in History from the School of Oriental and African Studies in London. While his studies focused on the Middle East in the 18th and 19th centuries, William has a long-standing interest in international finance and the political economy of development. William’s work is aimed at understanding how the Middle East integrates with the global economy, and into the wider geopolitical landscape.

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