Egypt: Price hikes hit workers and middle classes

Falling support for dictator Sisi portends growing opposition. 
Egyptian workers and middle classes have been hit hard by prices almost 30 percent higher in January than a year earlier. But after a period of few strikes and workers’ protests, and despite severe state repression, recent signs show this may be starting to change.

Prices shooting up

Inflation was around 14 percent even before 3rd November, when the government floated the Egyptian pound, which immediately fell by about a third against the US dollar. Since then it has fallen to half its pre-float exchange rate.

At the same time cuts in government subsidies on basic foods and fuel for all but the poorest were part of a package linked to a US$12billion International Monetary Fund loan. The loan was finalised one week after the subsidies were cut. Shortages of many goods and a new Value Added Tax of 13 percent have added to inflation. Food and drink prices rose seven percent in January alone and 38.6 percent year-on-year.

Two hundred and ten life-saving medicines became unobtainable, except at black market prices 300 percent above the original price. These included drugs for cancer, liver diseases, anaesthetics, kidney dialysis and diabetes. Government billboards on Cairo’s October Bridge and main streets reading, “Courageous reforms will make the road shorter” and “We can ration consumption, reduce our imports,” will have angered those suffering as a result. Pharmacists threatened to strike against a fall in their profit margins from 25 to 18 percent, caused by pharmaceutical companies hoarding drugs priced at pre-shortage levels to sell later at inflated prices.

Growing poverty

Only 15 per cent of the population lead a relatively decent living with reasonable access to some sort of decent education and nutrition (Central Agency for Public Mobilisation and Statistics, 2016). The rest live under “very dire conditions that leaves them with very high levels of illiteracy and malnutrition that is harsh enough to affect their physical and mental health negatively.” The government admits there are nine million children “under the poverty line… lacking the most basic, minimum level of care.”

Falling living standards hit the working class and poor hardest but middle class people are also affected. This stretches back beyond the recent fall in exchange rate. The 2015 Global Wealth Report estimated the size of the middle class as five percent of the population, almost half that in 2000 (Credit Suisse Research Institute). Middle class was defined as being “reasonably secure from falling into poverty.” Egypt, the World Bank said, was “a country with stronger downward than upward mobility.”

Although some workers have had wage increases of 50 percent since 2011, purchasing power has not kept pace with prices. Initial gains from the revolution that began on January 25th 2011 have been lost.

Fewer strikes but movement will rebuild

Strike levels fell during 2016 to their lowest level since the downfall of former president Hosni Mubarak. Around 1,736 protests on social and economic issues were recorded, slightly fewer than the 1,955 recorded in 2015. (Egyptian Centre for Economic and Social Rights) These included strikes and rallies, with 478 in the government sector and 107 in the private sector. This compares with 350-460 strikes and workers’ protests a day in February and March 2013, towards the end of Mohammed Morsi’s Muslim Brotherhood presidency.

Strikers have been arrested and tried in military courts, such as Alexandria shipyard workers. Twenty seven workers from food oil refining IFFCO Egypt were arrested in January when striking and sitting-in against low wages and unfair bonus distribution. They were imprisoned for 15 days before being acquitted by the court. Among the defendants were the President and General Secretary of the independent IFFCO Egypt Labour Union. In December 2016 100 tourism police illegally protested against a new shift system.

On February 7th 3,000 textile workers, mostly women, at Mahalla al-Kubra announced a strike over pay. The strike ended the next day after strike leaders were questioned, threatened with prosecution and losing their jobs. The 2006 Mahalla strike marked the beginning of the end for former president Hosni Mubarak’s regime. The number of workers has fallen since then from 24,000 to 15,000 but it is still the largest factory in the country. The recent short strike shows pressures are building and will erupt again at some point.

The explosive growth of independent trade unions after the 2011 revolution has been set back by a combination of exhaustion following the upheavals of 2011-13, heavy repression including torture, imprisonment and victimisation and also, in some cases, collusion between independent union leaders and the state. Meanwhile, in January the state-controlled Egyptian Trade Union Federation, whose leaders were appointed under the Mubarak regime, had its leadership’s term of office extended by another year by parliament’s Manpower Committee – which is dominated by ETUF members!

The 2013 Protest Law requires organisers to inform the police in advance, with large fines for disregarding this. Protesters who “disrupt public order, block traffic, or threaten public safety” face up to five years jail. President Sisi’s government was able to get such repressive laws passed after the downfall of the Muslim Brotherhood government, when there was a widespread mood for a return to ‘stability’. These short and relatively small strikes show this mood may now be starting to change. State repression against strikes and protests can hold back workers’ action for a time, but not their growing anger, which will break out again on a wider scale.

A recent Committee for a Workers’ International visitor to Egypt was told that ‘Sisi-mania’ – shirts, cakes and cookies bearing his photo – is no more. Although some older people still support him, with falling enthusiasm, his popularity among others, especially the youth, has eroded.

Sectarian attacks

A suicide bomber killed 29 in a Cairo church in December. The Coptic Christian minority in North Sinai have been subject to increasing bloody sectarian attacks by ISIS. Seven have been murdered in the past month and dozens of families have fled their homes. In 2013 Sisi had widespread support among the Copts who feared the Muslim Brotherhood’s agenda was increasing discrimination. These recent attacks are now fuelling anger and a sense that Sisi’s regime is failing to protect them.

There was a strong sense of unity between Muslims and Christians during the uprising against Mubarak, when huge crowds occupied Tahrir and other public squares. Members of each community protected the other during their prayers and many wore symbols of an intertwined cross and crescent. Rebuilding joint struggle on class issues while organising democratic community protection can defeat the sectarian attackers. The capitalist state can never be relied on for protection.

February 1917 – 100 years on

One hundred years years after the outbreak of the Russian revolution, socialists will be studying the lessons for Egypt today. Workers in Russia experienced the defeat of the 1905 revolution followed by several years of reaction and repression before class struggle built again. As the fear of the regime ebbed, new struggles developed. The women textile workers in Petrograd did not expect to spark a revolution when they marched out of their factories demanding bread, but the mood had changed from previous years and the Tsarist regime fell within five days.

Had it not been for Lenin and the Bolshevik party, a capitalist dictatorship would have been restored within months. The vital lessons for socialists today are the need to build a party rooted in the working class that links workers’ daily needs and democratic rights to the tasks of socialist revolution.

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