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In Egypt erupted diabetes crisis

Egypt is facing a food crisis: an acute shortage of sugar in the country. The food crisis has been going on for several weeks, and the tension in the country has reached a high level.

Many stores were sugar-free, and on social networks they spread images of empty shelves and long lines.

In those stores where sugar is sold, prices have doubled.

A wave of protests is raging across the country. Recently, a taxi driver set himself on fire in Alexandria, protesting against high food prices.

Increasingly, buyers are turning to the black market, but prices are also rising there.

import problem

This crisis was the result of a combination of internal and external factors.

Egypt consumes more sugar than it produces. Egypt consumes about 3 million tons of sugar per year, while its own production provides only two thirds of the required amount - just over 2 million tons per year.

Shortage is covered by sugar imports.

However, the increase in government tariffs on foreign sugar, as well as high world prices and a lack of foreign currency — all these factors impede sugar imports to Egypt.

In addition, it is important to note the fact that sugar is a state-subsidized product for which cards are issued.

However, as part of the program of cost-cutting measures that the government needs to receive an IMF loan of $ 12 billion, the government was forced to cut sugar subsidies.

Egyptian authorities blamed speculators for the shortage of supplies, and the media for swelling panic.

Food Minister Mohamed Ali El-Sheikh announced that the country has enough sugar for four months, while the cost of subsidized sugar increased by 40%.

As foreign media say, this year, sugar prices in world markets have risen sharply, which was associated with adverse weather conditions in Brazil, which is the largest sugar supplier in the world. Thus, according to estimates, sugar in world markets has risen in price by almost 46%.

At the same time at the beginning of the month, import duties on sugar were abolished.

All this led to the fact that illegal trade is developing in the country. And in turn, this led to an increase in the number of arrests on suspicion of speculation.

Thus, the media have already reported on several cases when citizens of the country were arrested who were suspected of intending to sell subsidized sugar at inflated prices.

Larger problems

Sugar is not the only product whose shortage is noted in the country.

Sugar, cooking oil, a number of medicines - these products have also been in short supply in Egypt in recent months.

In general, the country's economy is in an unfavorable situation. It is noted that the country still comes to life after the revolution in 2011.

In addition, if before, tourism was an important source of budget and currency revenues, then after the terrorist attack occurred on board a Russian aircraft, Russia and the United Kingdom banned entry to this country.

And tourists from these two countries made up the majority of the tourist flow.

Undoubtedly, this could not have had a negative impact on the economic situation in the country.

Analysts believe that the poorest segments of the population are waiting for even greater difficulties in the future.

They believe that there will be a shortage of other types of goods in the country, for example, a fuel subsidy will be reduced. However, for the most important goods, such as bread, the subsidies should be maintained.

Analysts believe that a program to reduce costs in the country is inevitable, since the long-running system of subsidies is not viable.

The shortage of sugar is also a reflection of another, larger problem in the economy of Egypt.

Stable and significant depreciation of the Egyptian pound has a negative impact on the economy.

The American dollar is trading at 17-18 Egyptian pounds. A week ago it was pounds 15-16, a month ago - 13. All this led to the fact that many factories and enterprises were closed.

The growth of the budget deficit, which reached 12%, as well as the decline in other indicators - all this led to the fact that the country's economy now needs emergency assistance. That is why the government agreed to an agreement with the IMF to issue a loan of $ 12 billion for three years.

It is unclear when Egypt will be able to overcome the crisis. The country really needs this loan, as well as the restoration of confidence in its economy.

However, Egypt now faces a huge number of problems: the shortage of water, sugar, terrorism, the collapse of the tourism industry, the staggering rates of population growth in the country with 93 million inhabitants. All of these factors, taken together, pose a real threat to the stability of the country.

IMF loan

In order to get a loan of $ 12 billion from the IMF, the Egyptian authorities need to fulfill a number of fund requirements.

Thus, to obtain a loan, Egyptian banks on Sunday began to trade freely in the interbank market for the first time in history.

The weakest exchange rate of the national currency was 16,55 Egyptian pound for dollar.

Now all the attention is on the IMF, which links the final approval of the loan with the liberalization of the exchange rate by Egypt and the reduction of energy subsidies: both requirements were met last week.

Egypt regards this agreement as a key factor that will restore investor confidence in the country's economy, which is in a very unfavorable situation with 2011.

Economists point out that these measures could fuel inflation, which in recent months has been at a record high for the current decade.

Food shortages and mass protests

Food shortages and related protests often become precursors to larger-scale events in the country, which often lead to dramatic consequences, including a change of government.

So, at the beginning of 2008, the global food crisis broke out.

The UN, the World Bank, the International Monetary Fund, the World Food Program and the Food and Agriculture Organization in March 2008 announced the threat to the global food crisis community.

By 1 April 2008, the crisis has already swept 39 countries of the world, threatening to spread to other countries. Starting with 2007, there was a sharp increase in food prices in the world (almost 40%), which hit the poor of the planet hard.

Among these countries was Egypt.

According to UNESCO, prices for soybeans increased by 87%, for wheat - by 130%, for rice only from January to March, 2008 g. - by 20%.

This phenomenon is associated not only with the advancement of consumption growth rates over the growth rates of rice production, but also with the 40 measures of rice exporting countries that restricted its exports, especially by such major producers as China, India, Vietnam, Indonesia and Egypt, due to the growth in domestic consumption.

During January-March 2008, the rise in food prices led to an increase in the number of hungry people on the planet for 75-100 million people.

A special role was played by speculation in the global food market. Another important factor that triggered a rise in food prices was high oil prices during the 2000s.

Only from July 2007 to July 2008 crude oil rose in price from $ 75 per barrel to $ 140 - followed by a jump in the cost of basic foodstuffs from $ 160 to $ 225.

The most interesting thing is that it was the Arab countries that were most susceptible to the increase in food prices. In the top ten of the world's largest food importers (calculated as a percentage of GDP), more than half of the positions were occupied by Arab countries - Lebanon (3,9%), Algeria (2,8%), Egypt (2,15%), Morocco (2,10%), Saudi Arabia (1,85%) , Libya (1,7%).

In Egypt, this price hike led to widespread unrest. Subsidized bread softened the blow from the rise in food prices, but food prices still rose, which particularly affected the condition of those who spent most of their money on food.

Thanks to the subsidized bread, the Egyptians did not face the threat of famine, but a sharp increase in food costs generated a psychological effect, the significance of which was actually quite large. It got to the point that in the spring of 2008 in Egypt “bread” riots were recorded.

Although the Egyptian leadership tried to take the necessary efforts to resolve the crisis, the “bread riots” dealt a significant blow to the prestige of power.

In the spring of 2008, the portraits of Mubarak were burned for the first time, who in the eyes of outraged people was responsible for the situation.

Then in the spring of 2008, the youth “6 Movement of April” was created, which will play an important role in the events of the Egyptian revolution almost three years later.

After the troubled 2008, the Egyptian leadership increases subsidies, major grain purchases are made.

However, in 2010, a sharp rise in grain prices occurs again: over the 8 months, wheat prices have doubled. Unrest due to rising bread prices was avoided, but the blame again fell on Mubarak and his entourage.

Egypt was vulnerable to the food crisis, as it imported up to a third of food consumed and up to 60-70% of wheat consumed.

Especially painful was the rise in prices for wheat and, consequently, for bread - thus, the food crisis turned out to be in this case the bread one.

As a result, it can be noted that rising prices for products, as well as food crises - this is a good reason for the opposition to shake up the situation in the country, which more than once in history has led to a change in the current government.

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