Sunday, December 09, 2007

Stopping the subsidies

The Egyptian government wants to scrap the subsidies program which provides millions of Egyptians with affordable food, transportation, water and energy.

Subsidies cost the government about 12 billion dollars a year, which is eating up a considerable chunk of the budget. The IMF and The World Bank have been pushing Mubarak to do this for over 20 years.

But this is going to be very tricky for Mubarak. Out of a population of 78 million people, there are more than 15 million who are living below the poverty line (earning leas than two dollars a day).

Scrapping the subsidies will definitely push more people into poverty.

Risky business. Let's see how it will unfold.



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