According to data released by the Central Agency for Public Mobilization and Statistics (CAPMAS), annual inflation in Egypt reached 26.5% last month, up from 21.9% in December 2022. The figure was just 8% in January 2022, before soaring after the outbreak of the Russian-Ukrainian war the following month. Commodity prices in Egypt continued to rise in January, with an average increase of 6.6% for bread and cereals, and 20.6% for meat and poultry.
In January, the Central Bank of Egypt announced that the annual core inflation rate had risen to 31.2%; a figure well below that recorded by various international rating agencies, which put the rate at around 101%, ranking Egypt 6th in the world, among the worst countries in terms of high real inflation rates.
This unprecedented inflation, accompanied by a historic devaluation of the Egyptian pound, is having a daily impact on the social climate in a country that is experiencing a significant increase in protest movements in both the public and private sectors.
Decline in salaries and purchasing power:
The depreciation of the Egyptian national currency against the US dollar is at its lowest level since 2016, exacerbating an already difficult economic situation in a country suffering from rampant inflation and a worrying decline in its foreign exchange reserves.
In December 2022, the Egyptian government received financial assistance from the International Monetary Fund (IMF) against which substantive economic reforms were implemented.
As with the brutal devaluation of 2016, which also took place in exchange for an IMF loan, it is the middle classes and the poorest groups that suffer the consequences first. At the time, President Abdel Fattah El-Sisi called the economic reform programme “the hardest in Egypt” and urged “mothers to make sacrifices” to keep the country’s finances afloat.
According to the World Bank (WB), the new economic conditions have put nearly 60% of Egypt’s 104 million people below or just above the poverty line. The new median income in the private sector, which is more generous than the civil service, is now 2,700 Egyptian pounds, or $87. This means that people who were above the poverty line may now be close to it, as the official average annual salary is 2,150 euros. The people affected by this situation are not eligible for government support, which makes their daily lives even more difficult.
The repercussions of this situation are particularly felt by graduates who have find jobs abroad. Those who do manage to do so join Egyptians abroad who send almost 30 billion euros each year to their families.
Worn out and revolted workers:
Since the beginning of the year, Egyptian workers have been holding a series of strikes and sit-ins to press for what they consider to be “legitimate” demands: regular wage increases, indexed to the rate of inflation, new bonuses and allowances as well as social assistance.
Recently, it was the workers of the company Kiriazi, specialised in the manufacture of household appliances, that organised a large demonstration to denounce the attitude of their administration, which refused any negotiation on the demands for regular wage increases. In media statements, the protesters claimed that their salaries have not been increased for years and that they are no longer sufficient in the face of general inflation. They added that the company has proceeded to abolish the allowances and all the benefits they previously enjoyed.
This large-scale strike was followed by several other movements organised by workers in the industrial sector, whose companies continue to claim that they are not in a position to carry out wage increases because of economic problems due to import restrictions, lack of foreign currency and falling profits.
With no way out, the unions are calling for strikes in the face of repeated, yet ineffective, police repression. If the authorities are indeed increasingly ferocious in suppressing trade union freedoms and stifling social movements, this does not seem to affect the will of Egyptian workers to defend their demands.
Thus, since the beginning of 2023, Egypt has been marked by major strikes that have had a significant impact on the entire country:
- the strike of the workers of the Kiriazi company in the governorate of Cairo
- the strike of the workers of the MAC company, a subsidiary of the Oriental Weavers Carpet company in the governorate of Ach-Sharqiya
- the strike by workers at Leoni Wiring Systems, a company specialising in the production of electrical harnesses for cars, in Cairo
- the sit-in by workers at El Nasr Castings, dispersed by the police
- the strike by workers of Al-Webriat Samannoud in the governorate of Gharbeya
- the sit-in by workers at the Qena cement factory in Upper Egypt
- the strike of taxi drivers in Port Said
- the strike of security personnel at Baltim Hospital in the governorate of Kafr el-Sheik
- the strike of the workers of the Egyptian Company for the Production of Styrene in Alexandria
They all had the same demands and denounced the same practices including the absence of collective bargaining, abusive dismissals, the suppression of social benefits, and the deterioration of working conditions and trade union work.
A repressive police response:
The multiplication of protestors, synonymous with the extent of the economic, social, and political crisis that the country is going through, has led to a drop of more than 30% in production in Egyptian factories according to several observers.
While the majority of workers are making financial demands, others are increasingly denouncing the repressive measures with which the authorities respond to any social movement; be it in terms of labour legislation, which restricts the right to unionise to certain categories, or in terms of the often excessively violent police responses.
Faced with the spread of these movements, the Egyptian authorities have arrested and sentenced several trade union leaders in an attempt to oppress them. Some of these leaders are known for their opposition to privatisation policies and the marginalisation of the role of independent trade unions.
Peaceful protests are being suppressed by a government that is trying to limit the social impact of the economic crisis by all means. In the context of an inflationary recession, however, these attempts are in vain and the movements continue and multiply throughout the country. The Egyptian Center for Public Opinion Research Takamul Misr, estimates that 213 strikes took place from January 2021 to January 2023. However, these strikes are not always covered by the media, due to censorship by the authorities.
Companies, both public and private, are also subject to the government’s controversial policy choices. With instructions to stifle protests before they even begin, many companies are forced to find ways to prevent themselves from becoming a target of the authorities. With little room for manoeuvre, they try to reason with employees to avoid protests, but are unable to respond favourably to employee requests.
As the war in Ukraine continues to impact the global economy, Egypt seems to continue its free fall into the unknown as the regime does everything in its power to suppress the voices of those who dare to speak out for their rights.
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