MPs teamed up this week to criticise the government's announcement on 9 January that it is currently considering eliminating the old commodity and food subsidies system in favour of cash payments. Parliament Speaker Ali Abdel-Aal joined forces, describing the statement issued by Supply Minister Ali Mosselhi as “provocative” and comes at a sensitive time in which the state is facing many challenges. Abdel-Aal said at a plenary meeting of parliament on Sunday morning that any government decision to change the subsidy system should be first discussed in parliament. “I stress that a shift from one subsidy system to another will be adopted only after discussion and dialogue with members of this parliament,” Abdel-Aal said. MP Sayed Abdel-Aal, leader of the leftist Tagammu Party, said he and many other MPs were taken aback by Mosselhi declaring last week that the government was considering moving ahead with a plan to eliminate food subsidies in favour of cash payments to recipients. “This is a very dangerous step and could negatively affect millions of citizens,” MP Abdel-Aal said, suggesting that this “sensitive issue should be a matter of national dialogue”. In response, Abdel-Aal said, “I want to stress that when government officials issue statements of high sensitivity to the public, they should be cautious and observe the interests of citizens first, because it is by no means acceptable that such provocative statements come at a time when the Egyptian state is facing a lot of challenges.” “Let me emphasise that there will not be any switch in the subsidy system... that food and in-kind subsidies will be kept in place and that there will never be a switch to cash subsidies unless there is consultation and dialogue with MPs first,” the speaker said. Following a meeting with the ministers of supply and finance on 9 January, Prime Minister Mustafa Madbouli said the government will move ahead with studying changing the ration card system into cash payments. According to Madbouli, “a switch to a cash system will help ration subsidies and ensure that they go only to the real beneficiaries. A number of entities are currently studying the move and also coordinating on how and when the new cash system could be implemented and then send a report to President Abdel-Fattah Al-Sisi to discuss it.” Madbouli said that there was a proposal that the new cash subsidy system be implemented on a trial basis in a number of governorates first. Speaker Abdel-Aal reminded the government that switching to cash food subsidies needed House approval. “The Supply Ministry's plans must earn a stamp of approval from the House of Representatives,” Abdel-Aal was quoted as saying yesterday. Abdel-Aal wagged his finger at Supply Minister Mosselhi for making a “public statement” on the proposed switch, which the speaker said is “provocative” for citizens under economic pressure. Mosselhi hasn't said when the government plans to make the switch, but Giza Chamber of Commerce board member Osama Al-Rifaai told the daily Al-Shorouk it could happen within two months. The new system would save 30-35 per cent of the subsidies bill in its first year (LE26.5 billion), rising to 40 per cent in the second year, the newspaper says, citing unnamed sources from the ministry and the Chamber of Commerce. The sources also say the government is mulling increasing each beneficiary's monthly allowance to LE200 from the current LE140. A number of entities are being consulted by authorities to study the feasibility of the move. There is a proposal on the table to launch the system on a trial basis in one of the country's governorates. The supply and finance ministries were in talks last summer over the planned shift, which would result in a new system that would see subsidy recipients receiving cash handouts rather than points on their ration cards with which to purchase bread. The Cash Subsidies Act, under which this new system would be governed, was sent to the House of Representatives in July 2019. Nivine Kabbag mentioned the legislation when she was sworn in as the new social solidarity minister as one of the items on her agenda.
*A version of this article appears in print in the 16 January, 2020 edition of Al-Ahram Weekly.
