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Subsidy cuts and lending criteria spark unrest


Food and fuel subsidy cuts and the International Monetary Fund's policy-based lending combine to make a recipe for social unrest in Egypt.

Associated with two separate loan agreements with the International Monetary Fund (IMF), the inflationary pressure driven by food and fuel subsidy cuts has been a common feature behind Egypt's large-scale social unrest on at least two occasions: in 1977 and in 2011.

The backdrop

Egypt’s modern history has witnessed two intense waves of social unrest, namely the 1977 bread riots and the 2011 and 2013 revolutionary uprisings.

At the heart of these two incidents, a common factor stands out: the imposition of austerity measures by the IMF as a precondition for Egypt's loan eligibility.

Before the 1977 bread riots, President Anwar Sadat reduced governmental subsidies on a number of essential food items, thereby igniting deadly riots. Following this, Sadat was compelled to withdraw these measures (Beinin, 2005, p131; Cook, 2014, p3; Kandil, 2012, p169; Marfleet, 2013).

Between 2004 and 2008 and in response to IMF loan conditions, President Hosni Mubarak gradually cut fuel subsidies. This triggered widespread fury across the nation which eventually led to Mubarak's departure amid the 2011 uprisings (Abouleinein, El Laithy, & Khayr Al-Dīn, 2009, p6; Castel, 2012, p1).

The escalation

It is widely believed that Egypt’s 2011 and 2013 uprisings comprised a mix of economic, social and political grievances. Furthermore, scholars and intellectuals are in agreement on the critical role of food and fuel price hikes in triggering unrest and escalating conflict in this country (Harrigan, 2012; Sachs, 2015, pp318, 411; Werz & Max Hoffman, 2013).

As for politics, in the absence of representative governance while articulating and enacting the loan agreements, the lack of transparency and inclusion necessary to formulate public consensus over the common objectives being pursued, the timeframe within which these objectives are to be realized and what is meant to be an equitable distribution of the economic burdens, are definitely to incur interruptions and reversals.

From an economic perspective, massive national debts and budget deficits have repeatedly forced Egypt to resort to entering into IMF agreements, which typically impose fiscal restructure which is aimed at reducing governmental spending by utilising subsidy cuts. Enforcing those financial and macroeconomic reforms has repeatedly resulted in costly long-term political and social implications (Abdel Haliem, 2014, p4; Corroto, 2012). In a country where 45% of its citizens live on less than $2.00 a day, along with significant unemployment and annual inflation exceeding 10% over the past decade (The World Bank, 2013), the slightest rise in food or fuel prices is generally met with wide-scale outbreaks of violence.

Given the relative inelastic demand of basic goods, particularly food and fuel, the financial burden of those reforms has been felt by those with a lower socio-economic level. These households generally spend the highest proportion of their disposable income on such basic goods (Abouleinein et al, 2009, p2).

The event

Our methodology detects several events of multiple deaths occurred in Egypt due to wide-scale violence outbreaks and protesting activities related to rising food prices.

Within the timeframe specified by the methodology, the data we obtained, mostly between February and April 2008 as well as later in 2010, show events of several deaths from violent conflicts that were related to the availability or affordability of food.

Similar events occurred due to wide-scale violent outbreaks also related to the availability and affordability of fuel. Mid-2013 witnessed several instances of these types of events. They usually involved separate stories about incidences whereby the frustration of needing to stand in long queues ignited violent clashes that resulted in the death of one or more citizens.

Early intervention

Sustainable development inevitably demands comprehensive social, political and economic reformations to avert potential implications of social unrest. Such strategic direction dictates democratic governance that would insure equitable distribution of economic proceeds and burdens, enhanced resource management and environmental accountability, as well as inclusive, accountable, transparent, and efficient state institutions.

However, early intervention mechanisms entail strengthening social safety nets, and improving social spending by efficiently targeting the most vulnerable social segments. It also requires immediate pursuit of alternative renewable energy sources while encouraging lifestyle changes and promoting thrifty and environmentally friendly behaviour.

Key themes

Food shortages, fuel shortages, government, inflation, poverty, subsidies, unemployment, unrest, police, queuing.


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  2. Abouleinein, S., El Laithy, H. and Khayr Al-Dīn, H., 2009. The Impact of Phasing Out Subsidies of Petroleum Energy Products in Egypt. Cairo: Egyptian Center for Economic Studies.
  3. Beinin, J., 2005. Political Islam and the new global economy: the political economy of an Egyptian social movement. CR: The New Centennial Review, 5(1), pp111-139.
  4. Castel, V., 2012. Reforming Energy Subsidies in Egypt. African Development Bank.
  5. Cook, S. A., 2014. Egypt's Solvency Crisis. New York: C. o. F. Relations: Council on Foreign Relations.
  6. Corroto, P., 15 January 2012. Entrevista a Jacques Rancier: Hablar de crisis de la sociedad es culpar a sus víctimas. Transl. (Jacques Rancière interview: Democracy is not, to begin with, a form of state). Publico. Retrieved from http://www.publico.es/culturas/416926/hablar-de-crisis-de-la-sociedad-es-culpar-a-sus-victimas [Accessed 7 May 2019].
  7. Harrigan, J., 2012. Did Food Prices Plant the Seeds of the Arab Awakening? Paper presented at the International Food Policy Research Institute/Economic And Social Commission For Western Asia conference, A Food Secure Arab World. Beirut, Lebanon.
  8. Kandil, H., 2012. Soldiers, Spies and Statesmen: Egypt's Road to Revolt. London: Verso Books.
  9. Marfleet, P., 2013. Never going back: Egypt's continuing revolution. International Socialism, 137.
  10. Sachs, J. D., 2015. The Age of Sustainable Development. New York: Columbia University Press.
  11. The World Bank, 2013. Inflation, consumer prices (annual %). Retrieved from http://data.worldbank.org/indicator/FP.CPI.TOTL.ZG
  12. Werz, M. and Hoffman, M., 2013. Climate Change, Migration, and Conflict. Washington, DC: The Center for American Progress, Stimson, and The Center for Climate and Security.


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