Friday, September 21, 2012

Egypts wage slaves

Ali Mazen, a day laborer, barely makes enough in Cairo to buy food for his family back home. He can’t imagine how he would cope if basic food prices were to rise. “The money I make now barely covers my own expenses. I wait for weeks to gather enough money to go home,” he tells Egypt Independent. “I don’t know what to tell my children anymore.”

Om Shahenda, a domestic worker who lives with her three daughters, is unimpressed by the new government’s actions so far to help her feed her family. Widowed and in her late 50s, she says she can no longer keep up with rising prices. “At times, I have no money at all at home,” she says. “On a recent occasion, I had to the sell the last bag of sugar to a nearby coffee shop to afford transportation to a house I work at.” She’s not hopeful that political leaders’ actions will be able to change her situation any time soon. “Where is Morsy now? Collecting money from the world — money that we never see,” she says.

Economists warn that a food crisis could take place within months if several domestic and international factors don’t improve significantly. Egypt is in a precarious situation, being heavily dependent on food imports. Egypt imports 40 percent of its total food and 60 percent of its wheat.

The 2012 World Bank Global Monitoring Report warned that North African and Middle Eastern countries were seriously behind on their Millennium Development Goals of providing affordable and nutritious food to the poor. People in the region remain susceptible to international food price fluctuations due to governments’ reliance on food imports, the report says.

If a food crisis does happen, it seems many consumers could end up losing doubly. Food prices will increase while their income is decreasing. Egyptians spend an average of 44 percent of their total income on food-related items. Amid rising prices, factories could increase layoffs in an attempt to reduce expenses. Unemployment would lead to reduced income per family, further straining their ability to obtain food.  Data released by the Central Bank of Egypt shows that, nationwide, total savings have dropped by nearly a third since last year. Many people have essentially been dipping into their savings to make it through the past 20 months of unrest. When those savings run out, an even greater number of people will be struggling to put food on the table.

The conditions are ripe for a full-on food crisis. Some experts warn that Egypt could go the way of Yemen, which has been in the grip of a food crisis for more than two years. Yemenis also revolted against their leader last year, ending Ali Abdullah Saleh’s 33-year-reign, which many said was plagued with suppression, economic turmoil, inequality and corruption. His regime left behind a population, like Egypt’s, of which half lives on less than $2 a day. According to the United Nations Office for the Coordination of Humanitarian Affairs, the number of food-insecure Yemenis has doubled over the past two years. This translates to roughly 10 million nationals, or 44.5 percent of the population, of whom 5 million need immediate assistance.

In recent years, food price volatility has been in part attributed to food commodity speculators who bet on the price of wheat or other foodstuffs in the near future. Traders have become increasingly active and bold in recent years, speculating over the weather and crop yields.

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