Minister of Justice Ahmed Al-Zind’s statements claiming that the average Egyptian can live on only EGP 2 daily arrived at a time when the vast majority of Egyptians are suffering from the high prices of food commodities compared to the low level of salaries provided.
Daily News Egypt spoke to ordinary people on the streets about their opinion on the minister’s statement and how they live.
“EGP 2 covers part of very small breakfast; what about the other two meals – lunch and dinner?” said an old man.
“The minister makes fun of Egyptians who get by on EGP 2. If he can live on EGP 2, so can I. However, he spends millions,” said another Egyptian man.
“I come from Upper Egypt and spend about EGP 500 to travel to Cairo, and spend about EGP 50 a day and it is not sufficient. I can buy only one piece of bread,” said another person.
“It is a funny story. If I lived in the 1930s, EGP 2 would not be sufficient, so what about electricity, water bill and other needs, as well as schools needs,” said Kamal Mortada.
“I can live on EGP 2, but the question is would ministers, judges, and members of parliament be able to live on EGP 2? It is impossible,” said another man.
“There is no logic that says a man can live on EGP 2. But the minister means we can bear the difficult economic crisis to move on from this difficult period.”
“If the prices are low I can live with EGP 2 but the prices are very high and I can’t buy anything for EGP 2, except to take a bus to close place,” said a housewife.
However, the Egyptian minister believes EGP 2 ($0.25) is sufficient for a person to survive daily, even though the World Bank announced that the poverty threshold is $ 1.9 a day (EGP 15) on 4 October 2015 based on purchasing power parity in 2011.
In Egypt, 26.3% of the population is under the poverty line, according to CAPMAS, which published a report on its website earlier this year.
According to those questioned by Daily News Egypt above, their salaries range between EGP 1,000 and EGP 2,500. However, CAPMAS said the minimum salary on the poverty line amounts to EGP 3,920 a month, which is approximately EGP 11.5 ($ 1.4) per day.
Meanwhile, Salwa Al-Antari, head of the Socialist Party’s Economic Committee said the government is responsible for easing the life of the average citizen by controlling prices and preventing monopolisation by senior traders who raise the prices.
Al-Antari added that the government should limit the profit margin in the trade of food commodities, and the Egyptian Competition Authority (ECA) and Consumer Protection Agency (CPA) should combat traders’ control in the market to help citizens and decrease inflation.
In response to Al-Zind’s statement, she said: “I want to ask the minister how much money he spends a day?”
Government seeks to control commodity prices to counter inflation effects
The government is offering new meal packages priced at EGP 30 for four persons. The packages include starches, vegetables, sauces and fruit proteins available in all consumer complexes.
However, housewife Mona Gamal said one meal is not sufficient for her, her husband and two children. In addition, her daily house budget cannot bear purchasing this meal every day.
Gamal added that 1 kg of meat costs EGP 100 ($12.80) in armed forces’ and consumer complexes, and one bottle of oil costs EGP 10 ($1,25), which is very high.
“I used to buy 1 kg of meat once a week and my husband salary is only EGP 2,000 ($252) and my children are in school and tuition fees are also very high,” she said.
In the same context, Minister of Supply Khaled Hanafy said on Monday that the government will adjust the prices of 10 basic commodities, including meat, poultry, fish, oil, sugar, rice, beans, corn, soybean, and wheat to combat the effects of inflation due to the lack of foreign currency.
Recently, the Ministry of Supply said the General Authority for Supply Commodities (GASC) would begin to import more commodities in order to reduce prices. In addition, it will offer 1 kg of meat for EGP 50 ($6.39).
A recent report by the Central Bank of Egypt (CBE) said the prices of vegetables increased by 9.71%, while consumer goods slightly increased by 0.75%, and food commodities increased by 0.19%.
The CBE announced that the annual rate of core inflation increased to 6.26% in October compared to 5.55% in September. Core inflation includes the index of consumer prices (the change in the level of prices for goods and services in retail markets).
The CBE said monthly core inflation recorded 1.23% in October, compared to 0.79% in September.
The annual inflation rate recorded 10.3% during the month of October 2015 compared to the 9.4% annual rate in September.
Egypt among world’s worst for wealth distribution: report
Egypt is among the world’s worst nations in terms of wealth distribution and the situation is getting worse, according to data from the Credit Suisse Global Wealth Databook 2015.
Credit Suisse places Egypt among the 15 worst nations for wealth distribution, ranked at number eight, with income inequality described as “very high”.
Half of Egyptians have a per capita income of less than $1,853, while the richest 1% of Egyptians controls 48.5% of the nation’s income.
The report puts the total wealth per adult at $6,983, with GDP per adult calculated at $5,508 and median wealth per adult just $1,664. Meanwhile, a total of eight Egyptians are listed as having personal wealth over $1bn.
Egypt is one of the three countries globally in which income disparity is increasing most rapidly.
Taxes represent 67% of state revenues in Egypt and tax expert Hany El-Husseiny said the current tax system contributes to the problem. Sales tax, for example, accounts for approximately 25.6% of budget revenues but does not differentiate between those on high and low incomes.
Following approval by the cabinet in March, the income tax roof in Egypt was set at 22.5%, making no further distinction between individuals on regular salaries and companies making millions, according to El-Husseiny.
The system contradicts Article 38 of the Egyptian Constitution, which instructs the tax system to develop state resources and achieve social justice and economic development.
Tax revenues in the state budget are divided into four sections: general taxes, sales taxes, custom taxes, and “other taxes”. General taxes are the taxes on salaries, industrial and commercial activities, non-commercial activities, real-estate wealth, petroleum activities, the Suez Canal, and the Central Bank of Egypt (CBE).
Sales taxes are a particular bone of contention for many Egyptians, with taxes imposed on domestic products, imported products, cigarettes, fuel and petroleum products, telecom services, and tourist hotels and restaurant services.
“The government takes our money in the shape of taxes but it imposes taxes on everything in our life without providing any services,” said Saeed Makram, an employee in a private company. He would be happier about paying sales tax on various products and services if the government were to ensure good salaries and service provision for Egyptians.