Egypt President defends recent price hikes

Published on NewsOK Modified: July 7, 2014 at 1:44 pm •  Published: July 7, 2014

CAIRO (AP) — Egypt's President Abdel-Fattah el-Sissi defended Monday his recent decisions to partially lift subsidies on fuel that caused a public outcry, calling them a necessary "bitter pill" to revive his nation's ailing economy.

In a nationally televised speech, el-Sissi went through figures for budget deficits and government debt to explain to the public last weekend's steep fuel price hikes, a long-awaited move to curb the country's massive subsidies program that eats nearly a quarter of the state budget.

In a half-hour-long speech, el-Sissi defended the bold move, saying that other leaders have shied away from introducing such reforms in fear of public upheaval.

"Was there another choice? By God, no. Could we have delayed it? It was already years late," said el-Sissi, using the Egyptian Arabic vernacular.

All fuel prices went up effective Saturday by as much as 78 percent, causing panic among the public and a political outcry. Economists described as a first move toward putting the country on the path to economic reform.

He said common wisdom would have dictated that he holds off on the decision to reduce subsidies to maintain his popularity, particularly since he doesn't belong to a political party that would rally support for his economic measures.

"But I have God first, and then all of you Egyptians," he said.

Likening the current conditions to the times of multiple wars with Israel in the last century, el-Sissi said Egypt is at war to rebuild following turmoil, urging people to be patient and put up with the austerity measures.

He also warned Egyptians against taking advantage of the lifting of subsidies to raise prices unreasonably. Those who don't heed his calls, he said, will have to answer to the law.

"We are waging a war to build Egypt in the face of many challenges — economic, political and security challenges, inside and outside of Egypt," he said.

The price hikes have caused shock and confusion on the streets, with some taxi drivers going on strike to protest the steep fuel rises, which they complain were not translated into a proportionate hike in fare rules.

A number of political parties have also come out against the increases. On Monday, the liberal al-Dustor party called the economic decisions unfavorable to the poor and said they were hastily passed. "It would have been more useful to look for ways to push economic activities, encourage investment, and adopt real austerity measures in terms of government spending," the party said in a statement.

There has not been an outpour of public anger against the new decisions. Most Egyptians, in a country where nearly half of the population of 86 million live in poverty, are still reeling from the news, which included also a gradual increase in the price of electricity, a new property tax and a rise in cigarette prices.

Continue reading this story on the...