Abdel Fattah El-Sisi received the Human Development Report in Egypt for the year 2021 in mid-September, and the Egyptian political system celebrated the report, which was released after a 10-year absence.

The report hailed the achievements of the post-2013 regime. Its introduction sustained its path, despite the repression associated with its creation, stating that “Egypt has seen many major political, social and economic developments since the revolution of January 2011, culminating with the events of June 2013, when the country was able to end political conflicts and extremism and regain control of its capabilities. The country then begins a new phase aimed at achieving sustainable economic and social development, strengthening political stability and security, fighting terrorism, protecting borders, improving public services, consolidating the principles of governance, and fighting against corruption.”

In its summary, the report notes: “Various international institutions have hailed the success of the economic reform process in Egypt. The International Monetary Fund (IMF), in successive reports on the performance of the Egyptian economy, has said that the Egyptian economy continues to perform well despite less than positive global conditions. This performance had led to an increase in the growth rate to 5.4% for fiscal year 2020/2021, while the budget deficit decreased to 7.6% of GDP and the unemployment rate to 7.3%. . “

It is important to explain some concepts so that the picture is clearer; GDP is the gross domestic product, which is the final value of all goods and services in a country during a specific period of time, and it reflects the economic situation of the country by estimating the size of the economy and the rate of growth from this country. There are several ways to calculate it, but the expenditure method is one by which the GDP figure can be maximized if the country is low productive, so it will be appropriate to look at the Egyptian case through this.

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The calculation of GDP by accounting for expenditure includes expenditure on infrastructure such as bridges, including the construction of prisons, schools and hospitals, as all state expenditure is included in the calculation of this value. . The growth rate is calculated by comparing the new year with the previous year. If the gross domestic product of a country was 100 billion dollars and it became 102 billion dollars the following year, the annual growth rate of that country would reach 2%.

According to the Egyptian Minister of Planning, the growth rate in Egypt could reach 5.4% by the end of this year, but will the picture be so bright if we focus on the detailed situation away from the total numbers ? In other words, do these “positive” figures reflect the reality of citizens in terms of wages and prices?

In mid-March, Sisi decided to increase the minimum wage from 1,200 Egyptian pounds to 2,400 Egyptian pounds (1 USD equals about 15.6 Egyptian pounds), and the total increases in wages, bonuses and pensions will reach 92 , 5 billion Egyptian pounds (about 6 billion dollars), but is 2,400 Egyptian pounds enough for a family of four?

According to the Central Agency for Public Mobilization and Statistics, the inflation rate increased in October 2021 by 7.3%, against 4.6% in 2020. The Agency attributed this increase to the rise in prices of meats, poultry, dairy products, types of cheese, eggs, fish and seafood, cereals and bread, rent for housing, private transportation costs, newspapers, books and stationery, expenses for preschool and basic education, expenses for higher education, secondary and technical education expenditure and health expenditure.

The Egyptian Minister of Supply also announced an increase in the price of a liter of vegetable oil from 21 to 25 Egyptian pounds, from November. According to the minister, Egypt imports 97 percent of its crude oil needs. The Egyptian government has also increased the prices of domestic and commercial gas at rates ranging from 4.2% to 6.4%, while the gas prices for high consumption factories (iron, steel, cement, fertilizer and petrochemicals) increased by 28%. cent, to reach $ 5.75 per million thermal units. The increase comes at a time when global gas prices have fallen 8% to $ 4.89 per million thermal units.

These increases will cause food prices to rise to varying degrees, including rising gas prices, which has resulted in higher prices for building materials, as well as prices for the fertilizers on which the agricultural sector relies and, therefore, the prices of vegetables and fruits.

The increase in the prices of meat and poultry is due to the significant increase in the price per tonne of food, which fluctuates between 8,100 and 8,150 Egyptian pounds, against 5,000 Egyptian pounds last year. Egypt imports about 80 percent of the corn, beans and soybeans used in poultry and animal feed.

In view of these increases, which are distributed between basic food needs, housing and transport needs, is it possible to rely on government data which gives positive macroeconomic indicators? This assumes it is correct.

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According to the French economist Jean-Pierre Sereni, “the financial strategy of the Egyptian government since its 2016 agreement with the International Monetary Fund (IMF) has consisted in generously remunerating foreign capital in order to finance the national budget deficit as well as the current account balance of payments deficit. Year after year, its overall financing needs flirt with the incredible figure of 35% of GNP, while even in 2020, when the Covid-19 pandemic peaked, they never exceeded 10%. in the main western countries. Cairo offers some of the highest interest rates in the world, 13-14% per annum for loans in local currency, 7-8% for loans in foreign currency. According to the American rating agency, Bloomberg, which closely monitors 50 emerging countries, Egypt’s real interest rates (nominal rate minus inflation rate) are the highest in the world “, adding that” consumers are forced to pay for the hando uts to foreign speculators.

This is the equation proposed by the Egyptian political system: allowing inflation so that consumers bear the bills for irrational government spending on infrastructure, ignoring the priority focus of spending on education and health. In exchange for this inflation and popular spending, borrowing and debt increase, consuming 90.6% of the Egyptian gross product. With these terrifying numbers, the political system still cries out for reform, and international institutions and governments give unrestricted support to one of the most brutal repressive regimes in the world.

This article first appeared in Arabic in Arab21 December 14, 2021

The opinions expressed in this article are the property of the author and do not necessarily reflect the editorial policy of Middle East Monitor.