Egypt says subsidy spending secure, to target needy

CAIRO, Oct 22 (BestGrowthStock) – The finance minister sought on
Friday to reassure Egyptians faced with soaring food prices that
the government was not trying to cut subsidy spending although
he said Egypt did want to direct it at the most needy.

Subsidies are a sensitive issue at any time in Egypt where
many rely on subsidised bread and other basics. The issue is
more acute now with urban inflation at 11 percent, food price
rises double that and a Nov. 28 parliamentary election looming.

Surging food prices and subsidised bread shortages led to
violent protests in 2008. So when global wheat prices climbed
this year, ministers in the world’s biggest wheat importer were
swift to tell Egyptians that stocks were secure and plentiful.

“There is no intention to decrease the subsidy for basic
provisions and petroleum products,” a statement citing Finance
Minister Youssef Boutros-Ghali said.

The government has previously said it expected to spend
about 101 billion Egyptian pounds on subsidies, about a quarter
of its 2010/11 budget. [ID:nLDE65R1O7]

“The general aim is to increase the subsidy (bill) if the
need calls for that,” he said, such as in cases like 2008 when
global prices rose. He added that subsidies would reach “the
really deserving” with a new smart card system.

Under the scheme, holders can buy basic goods each month at
low costs, such as rice, sugar, tea and cooking oil. From
January, canisters of butane cooking gas will be issued based on
a coupon system, the minister’s statement said.
“The government will not impose on low earners any increase
in the prices of these goods or reduce amounts with the supply
cards,” he said, adding he was working with the Social
Solidarity Ministry to ensure subsidies did not go to those who
were not in need.
(Writing by Edmund Blair; Editing by Mark Heinrich)

Egypt says subsidy spending secure, to target needy