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Egypt gives subsidy preference to the most vulnerable

Move comes amid hikes in prices of different goods and services in Egypt where 40 per cent of the population is poor

Image Credit: Supplied
Residents buy subsidised bread at a bakery. Ration cards will shortly be distributed to Egypt’s disadvantaged groups.
Gulf News

Cairo: Egypt on Wednesday said that its decades-old ration system, would give “vulnerable groups” preferential access to subsidised food.

Ration cards were to shortly be distributed to Egypt’s poorest and disadvantaged groups, state media reported.

The would-be beneficiaries include seasonal workers, street vendors, the jobless, divorcees and orphaned children.

People with special needs and chronic ailments are also covered by this “exceptional” decision, the media added, citing government officials.

Employees at state or private sector with a monthly salary of up to 1,500 Egyptian pounds (Dh250) will be entitled to these cards, which give holders access to subsidised food, including bread, cooking oil, sugar and rice.

Up to four members of each eligible family will benefit from the new system, the Supply Ministry said.

The ministry insists the decision would not exclude current beneficiaries of the ration system, but did not say how many people would benefit from the new arrangement nor how did the special categories would impact other ration card holders.

Around 71 million Egyptians of the country’s 95 million people already benefit from the food subsidy system.

Some lawmakers, however, criticised the government for setting LE1, 500 as the maximum monthly salary for employees eligible to apply for a new ration card.

“Eligibility criteria have not been discussed between the parliament and the government,” MP Mohammad Abu Hamed said.

“This sum [LE1,500] is nothing in our time. It marks the poverty limit. Therefore, considering income as the sole yardstick to specify who deserves subsidy is rejected. Other criteria such as the number of family members should also be taken into account,” Hamed, a member of the pro-state coalition, Egypt Support, told private newspaper Al Watan.

Last month, a deadline, set by the government, expired for ration card holders to update their data in an attempt to trim the system that costs Egypt billions of dollars annually.

A total of LE 86 billion has been allocated in subsidy of bread and other food items in Egypt’s public budget for the new fiscal year that began in July.

The government has repeatedly urged those who do not desperately need the subsidised food to voluntarily give up their ration cards in order to avoid unspecified fines.

Egypt’s efforts to revamp state subsidies come as the country is experiencing one of its worst economic crises in decades.

Last November, Egypt floated its local currency and has since cut state subsidy on fuel twice as part of tough economic reforms.

The measures have secured Egypt a bailout loan of 12 billion dollars from the International Monetary Fund over a period of three years.

However, the moves have unleashed hikes in prices of different goods and services in the country where around 40 per cent of the population are believed to live under the poverty line.

In recent months, Egyptian authorities have worked to boost social support for the poor in an effort to cushion the impact of economic reforms.

In June, President Abdul Fattah Al Sissi doubled the value of subsidized food that ration card holders can buy every month.