Austerity bites but weary Egyptians respond with just fitful protests

Egyptians and Jordanians have responded in starkly contrasting fashion to fresh austerity measures introduced as the price of loans from the International Monetary Fund (IMF).

Their spirit crushed by five years of severe repression, last month Egyptians staged fitful protests over a hike in transportation fees while Jordanians took to the streets for more than a week over taxes and bread, bringing down the government and forcing parliament to reject IMF impositions.

To secure a $12 billion bailout loan, Egypt has slashed subsidies, introduced a value added tax and floated the country's currency. Last weekend, as Egyptians were celebrating Eid al-Fitr, the feast at the end of the Muslim fasting month of Ramadan, Cairo increased the prices of fuel and cooking gas.

This was the third time Egypt has raised fuel prices since austerity was adopted in 2015.

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The price of a cylinder of cooking gas for commercial use nearly doubled; the price for home consumption by 40 per cent. A litre of different grades of petrol rose by 17, 34 and nearly 50 per cent. Train and metro fares increased by 20 per cent.

Ahead of these moves, metro fares had risen by 250 per cent; drinking water by 45 per cent and electricity by 26 per cent.

These measures, adopted ahead of the IMF’s delivery of the $2 billion fourth tranche of the loan, could send the cost of food, transport, water and electricity soaring. The increases are meant to wipe $2.8 billion from subsidies in the 2018-19 budget.

In response to the hikes, opposition lawmaker Haitham al-Hariri said: “While I don’t oppose economic reforms, they could be implemented gradually and in a better way to avoid the disastrous impact on poor people.”

Nearly 30 per cent of the 96 million Egyptians lives below the poverty line. Egyptians have not flocked into the streets because they fear the harsh crackdown on all dissidence adopted by the military since it took power in 2013.

More than 100,000 Egyptians are in prison, 60,000 of them political prisoners. Newspapers, television channels, and human rights organisations have been shuttered. To divert public attention from the latest price increases, 3,477 prisoners were released on the first day of the Eid.

Jordan

In Jordan, prime minister Hani al-Mulki resigned following mass protests and was replaced by Omar Razzaz, former World Bank economist and current education minister.

Sixty people were arrested during demonstrations, many carrying blades; 42 police officers were wounded from gunshots and fireworks. Demonstrations drew more people than protests during the 2011 Arab Spring and were attended by mainly secular, middle class people rather than fundamentalists.

The authorities handled them with kid gloves instead of an iron fist. Few of Jordan’s 15,700 prisoners are politicals.

Jordanians deeply resent the tax increases and abolition of bread subsidies demanded by the IMF in exchange for a $723 million loan meant to lower public debt. The draft law, now withdrawn, called for a five per cent tax increase on employees and 40 per cent on companies.

Fuel prices have increased five times this year and electricity bills have risen by 53 per cent. Jordan's capital, Amman, is the region's most expensive city. Due to conflict in neighbouring Iraq and Syria, Jordan has made heavy investments in the military and security agencies while the country's infrastructure and educational system require upgrading.

A country with few natural resources and a population of 9.5 million, Jordan is severely strained by the influx of 1.3 million Syrians in addition to 66,000 Iraqis and ha--lf of the region’s five million Palestinian refugees already settled there.