El-Sisi Tweets Man-of-People Message as He Seeks to Calm Egypt
El-Sisi Tweets Man-of-People Message as He Seeks to Calm Egypt
(Bloomberg) -- Egyptian President Abdel-Fattah El-Sisi’s time with the tweeter-in-chief wasn’t wasted.
Shortly after returning from meeting President Donald Trump at the United Nations last week, he took to Twitter looking to bolster a man-of-the-people image following rare protests in a nation reeling from an IMF-backed economic overhaul.
“I understand the plight of citizens negatively impacted by some of the measures taken,” El-Sisi tweeted Sunday. Don’t worry, he added, “I assure them that the government is completely committed to doing what is necessary to preserve the rights” of the needy.
Over the next few days, officials highlighted that 1.8 million people had been put back on a roster for heavily subsidized commodities like sugar and oil; parliament’s speaker talked up the likelihood of political reforms; and rights groups said some of the roughly 2,000 people detained after the Sept. 20 protests had been released without charge.
The demonstrators only numbered in their hundreds. But in Egypt, where uprisings have ousted two presidents this decade, that was enough to convince El-Sisi he needed go beyond his usual calls for patience and efforts to crush dissent.
Videos by a self-exiled former army contractor that alleged widespread corruption helped inspire the protests and were directed at the mass of Egyptians who have stood by the president since he seized power six years ago.
The clips left “El-Sisi worried,” said Riccardo Fabiani, North Africa project director for the International Crisis Group.
“The softer tone makes sense,” Fabiani said of the recent overtures. “Now, the issue is what can they do to appease parts of the population that were most affected” by the economic program.
Going beyond a dose of income redistribution or tweaks to subsidy rules would run counter to the broader goal of financial stability that’s key to attracting investors, he said.
A 2016 devaluation of the pound helped secure a $12 billion International Monetary Fund loan, attracting billions of dollars in inflows from bond investors seeking high yields. But Egyptians were hit by soaring living costs, with the poverty rate climbing to 32% in 2018 from 28% in 2015.
Under the IMF-backed program, subsidies on fuel and electricity were lifted, and new taxes introduced. There were major investments in infrastructure which critics deemed wasteful but officials said were essential to attracting private sector investment.
As prices rose sharply, the government increased supplies of fruit and vegetables to markets and stepped up assistance through cash-transfer safety nets.
No Repeat
This week’s news of a subsidies row-back is not all it seems, however. The Egyptians added to the 64-million member ration-card system were people who’d filed appeals claiming they were wrongly dropped. And the reinstatements began in February, months before the unrest.
Upon his return from New York, El-Sisi stressed that a repeat of the previous weekend’s upheaval wouldn’t be allowed. But even as security officials looked to contain the unrest, the country’s top prosecutor issued a surprisingly conciliatory statement reflecting on the real hardship many face.
Officials can point to economic successes, for sure. Growth rebounded to 5.6% in the last fiscal year, when tourism revenues surged 28% to $12.8 billion. Egypt has become an emerging-markets favorite with foreign investors, who held around $18.3 billion in local debt at the end of August. Offshore natural gas field discoveries have helped cut the energy import bill.
But Egypt’s finances are still exposed to oil-price spikes, while a new flareup in terrorist violence could devastate tourism. Foreign direct investment, a key part of the government’s long-term plan, is still underperforming at just $5.9 billion in the year that ended in June, down from $7.7 billion.
The economic program “hasn’t fundamentally changed the shape of the Egyptian economy,” said Crispin Hawes, director of Idrisi Advisors in the U.K. “It hasn’t eradicated any of the core vulnerabilities.”
To contact the reporters on this story: Tarek El-Tablawy in cairo at teltablawy@bloomberg.net;Abdel Latif Wahba in Cairo at alatifwahba@bloomberg.net
To contact the editors responsible for this story: Alaa Shahine at asalha@bloomberg.net, ;Lin Noueihed at lnoueihed@bloomberg.net, Mark Williams, Michael Gunn
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