What price bread in Egypt?

Moving from an "autocracy of bread" to a "democracy of bread".

Debate rages as to the exact nature of events leading to the military ousting of President Mohamed Morsi. Was it a conspiracy engineered by the legions of personnel left in place after the departure of former President Hosni Mubarak; the failure of the police to maintain law and order and state agencies to provide adequate power supplies that whipped the people into fever pitch?

While the validity of these accusations may be a matter of contention, the challenges facing Mubarak, Morsi and Egypt’s next president are the same: how to restructure Egypt’s economy to end the crippling regime of subsidies that hamper growth and act as a drag on government finances.

Food subsidies have been used as a tool to buy loyalty and ensure stability for decades. While a continuing burden, Egypt began to feel the pain in 2008, when grain prices reached record levels and unemployment soared.

By 2010, the Egypt government’s bread subsidy bill topped $3bn a year. Much of this took the form of selling subsidised flour to local bakeries; an inefficient process system that lent itself to massive corruption. As global prices rose bakers resold subsidised flour and bread into the black market, where they could go for five or more times the subsidised rate, pushing up the price of bread for consumers.

The US contributed to the creation of the "autocracies of bread" through the provision of cheap wheat as a device to secure influence during the Cold War. Egypt’s Hosni Mubarak was the main recipient along with Iraq’s Saddam Hussein who received billions of dollars’ worth of surplus American wheat through grants and loan guarantees, while Jordan, Yemen, and other Middle Eastern countries got lesser amounts. This funding of the "social safety net" was seen as a cheap way of keeping friendly regimes in power.

In the long term cheap wheat has come at a high price; lack of investment in domestic agricultural production and a dangerous dependence on cheap imports from abroad. Bread subsidies also failed to lift the recipients out of poverty. The Middle East is the only region outside sub-Saharan Africa where the number of malnourished people has risen since the early 1990s with Egypt and Tunisia experiencing declines in the standard of living for all income groups outside of the top 20 per cent, despite the rise in GDP.

In 2008 when the price of bread soared, a wave of bread riots broke out across the MENA region. Governments intervened by raising wages, cash handouts and increased subsidies. These were short term remedies that proved unsustainable and had the unintended consequence of making more people dependent on subsidised bread.

Over the next two years a combination of factors - changing consumption patterns among the developing world’s middle class, drought, poor harvests, bio fuels and export embargoes - pushed food prices to an all-time high. The United Nations’ Food and Agriculture Organisation announced in early 2011 that food prices had surpassed 2008 levels.

The regimes in the region responded in the way they always had - with subsidies. Egypt, Yemen and Jordan increased food subsidies, Algeria, Tunisia and Morocco lifted customs duties and import tariffs on food, while Saudi Arabia unveiled a multi-billion dollar spending plan.

For hydrocarbons poor Egypt, the challenge was how to keep pace with subsidies at a time of contracting government revenue. Egypt’s food bill is unsustainable without significant donor handouts or high tourist receipts. The donors have been deterred by the policies of the Morsi government and the tourists have stayed away because of violence on the streets.

If the ousting of Morsi leads to the election of a secular leadership the donors may return. Saudi Arabia is willing to find a non-Muslim Brotherhood leadership and a new president may reach accommodation with the IMF for the release of funds. While these scenarios may stabilise Egypt in the short term and allow the government to continue to fund its food bill, donor aid will simply allow the restructuring of the Egyptian economy to be postponed until some indeterminate time in the future. The fundamental problems and grievances will be perpetuated transforming the government from an "autocracy of bread" to a "democracy of bread".

Photograph: Getty Images

JLT Head of Credit & Political Risk Advisory

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Despite new challengers, Andrew Marr is still the king of the Sunday-morning politics skirmish

The year began with a strong challenge from Sophy Ridge, who scored a coup with her Theresa May interview. By week two, though, the normal order was restored.

The BBC can declare at least one victory for its news division in 2017. In what was dubbed “the battle of the bongs”, ITV’s regrettable decision to shift the News at Ten to 10.30pm for a couple of months this year in favour of a new entertainment show means that the corporation’s flagship bulletin will be once more unchallenged. But the war among the UK’s television channels has shifted to new territory: now it’s Sunday-morning sofa skirmishes.

This year began with the equivalent of ravens leaving the Tower. The Prime Minister’s New Year interview, cherished for decades by David Frost and then by Andrew Marr, migrated from the BBC to Sky News. It was a coup for Sophy Ridge, whose new show marks the arrival of a woman into what had previously been male territory. It intensified the pressure on the BBC after the blow last year of the defection of Robert Peston to ITV, lured by the promise of his own show to rival Marr’s.

By week two, though, the normal order was restored. The biggest interviewee, Jeremy Corbyn, was on The Andrew Marr Show and his lieutenants John McDonnell and Emily Thornberry were deployed on Sky and ITV. These things matter because the Sunday-morning political programmes often generate the headlines for the rest of the day’s broadcasting and for the Monday papers; and the commercial companies want to dent the BBC’s reputation for setting the agenda. The corporation can often do it by the sheer volume of its output on TV, including the estimable Sunday Politics, and on radio; but it’s a plus for audiences if other voices can be heard.

The Andrew Marr Show has traditionally secured the A-list guests because it has by far the highest ratings. Its most powerful asset is Marr, who was a transformative political editor for the BBC and possesses, as New Statesman readers know, an original and free-thinking take on the issues of the day. The energy in the programme comes from him but he is not helped by a staid production: a predictable format, a set with a London skyline and a superannuated sofa. There aren’t many laughs. The review of the papers has become cumbersome with the addition of a statutory Brexiteer, and the supposed light relief is supplied by arts plugging of the kind that seems mandatory in every BBC News programme. We are invited, wherever we are in the UK, to pop along to the West End to see the latest production involving the actor-interviewee of the day. However, if there is a new political line to be found, Marr is the most likely to sniff it out.

By contrast, Peston on Sunday seems to have consumed a lot of fizzy drinks. It is sharp and contemporary-looking and it bounces along, thanks to the interplay between Peston and his sidekick, Allegra Stratton. It is more willing to take risks, as in the entertainingly acidic recent exchanges between Piers Morgan and Alastair Campbell, and it works as a piece of television even if it doesn’t have the top guests. It merits its repeat in the evening, when it gains a bigger audience than in the live transmission.

Guests may be more crucial to the success of Sophy Ridge on Sunday. It looks lovely in its sparkling new studio, but the prime ministerial scoop of the launch show was followed by an interview with Nigel Farage and a dull encounter with a union official. There is a commendable attempt to get out of London and to hear from the public, and it’s refreshing to locate an MP such as Tom Watson in a West Bromwich café. The programme is also trying to book more women interviewees, and one paper review featured a token man; but can it be a must-watch for news junkies or entertaining enough for a casual viewer?

There is only so much that producers can do to lure the right guests. If you meet any broadcaster these days, they immediately gripe about the attempts by Downing Street to control who appears where – which has been applied with particular vigour under the May administration: hence Boris Johnson recently appearing as duty minister on both Marr and Peston on the same morning, which neither channel finds ideal.

There is a trap, in that obtaining quotesfor the rest of the media is only part of the remit. In these uncertain political times, audiences need knowledge, too, and an interview that merely zips through the news lines of the day may add little to our understanding of policy and the choices faced by government. All of these shows feature presenters with formidable brainpower and it is perfectly possible to meld that into a programme that is worth watching.

Peston’s show makes an attempt with Stratton’s big screen to provide context and statistics, but it could do more – and it might painlessly lose some of the witless tweets that pass for interaction. It’s a further conundrum of television that Marr’s most interesting takes on current issues are often in his documentaries or writing rather than on his eponymous show. The guardians of impartiality may twitch, but viewers would benefit from him being given more freedom.

There is the rest of the world to consider, too. It was striking on a Sunday just ahead of the inauguration of Donald Trump that none of these shows had a major American player. While Michel Barnier was making the news in the weekend papers, no decision-maker from the EU was featured, either. This is not a phenomenon of Brexit: television has always found it easier to plonk a bottom on a sofa in SW1 than to engage in the long-term wooing that gets significant international guests. Yet, as we are allegedly preparing to launch ourselves into the wider world, hearing from its key decision-makers is part of the enlightenment we need, too.

Roger Mosey is the master of Selwyn College, Cambridge, and a former head of BBC Television news

Roger Mosey is the Master of Selwyn College, Cambridge. He was formerly editorial director and the director of London 2012 at the BBC.

This article first appeared in the 19 January 2017 issue of the New Statesman, The Trump era