Tension in Egypt shows potency of food crisis

from USA Today

By David J. Lynch, USA TODAY
CAIRO — Well before 8 o'clock on a late April morning, a line of about 30 eager customers forms at a modest bakery in this working-class neighborhood. With a global food crisis roiling countries from Asia to the edge of Europe, at least 11 people have been killed recently in such lines here, struggling to get their daily bread.

But today, the queue melts away within moments. Veiled women and men in worn shirts approach a small wooden shack at the end of a narrow alley, hand over the equivalent of a few cents and leave holding a plastic bag filled with nine flat loaves of bread. Over the next half-hour, until the bakery runs out of its only product, the line waxes and wanes.

There's no panic, no desperate scrambling for sustenance — a tentative sign of success for an emergency government plan that involves dramatic increases in spending on bread subsidies and the use of Egyptian soldiers as bakers.

"Now we're able to find bread," says Dalia Hafez, 40, seated on a nearby curb in a cappuccino-colored headscarf. "Thanks God, the crisis is over."

For now, anyway. But the aftershocks from the food trauma here are only beginning to be felt. Tensions are continuing to build in this key U.S. ally, evidence that the global food crisis — the product of factors ranging from unusual weather in producing nations to increased competition for grains from biofuels programs — is now about much more than food.

"This crisis threatens not only the hungry, but also peace and stability," the head of the United Nations World Food Program (WFP), Josette Sheeran, warned in a recent speech.

That's certainly true in Egypt, the most populous Arab nation, recipient of $1.8 billion in annual U.S. foreign aid and a critical link in global trade sitting astride the Suez Canal. Its authoritarian government is faced with mounting labor unrest, profound public dissatisfaction over a yawning gap between rich and poor and questions over who will lead Egypt in the coming years.

In this deeply unsettled atmosphere, images of Egyptians scrapping for subsidized balady (bal-a-DEE) bread have left the government on edge. Proof of just how sensitive the issue remains could be seen in the response of Egyptian state security to a USA TODAY correspondent's visit to a second bakery later that April morning.

As the reporter and his translator left the bakery in the Rod El Faroq neighborhood, they were blocked by a plainclothes security officer. The man demanded the memory card from the reporter's camera, saying the images it contained — of men baking bread — posed "a threat to Egypt's national security."

The reporter and his translator were surrounded by at least seven policemen in white uniforms. Some threatened the bakery owner with prison for speaking with a foreign journalist.

The journalists were detained for five hours. Egyptian officials said no pictures could be taken in their country without advance government approval. The camera's memory card was returned, damaged.

That Egyptian officials regard photos of bakers at work as potentially incendiary is a measure both of bread's unrivaled importance in the Egyptian diet and of the government's concern that continued public discontent over food supplies could metastasize into something more threatening.

Officials here have good reason to be worried. In 1977, an abortive government effort to reduce the bread subsidies that are a lifeline for most Egyptians sparked widespread rioting, which led to dozens of deaths and forced the government to abandon its plans.

"People in Egypt may be considered passive or silent, but there's a limit to this. And when they reach that limit, one day there will be a popular explosion," said lawyer Esam Salam, interviewed at a cafe near Cairo's train station.

Former Pentagon official David Schenker, who lived in Cairo in the early 1990s and is with the Washington Institute for Near East Policy, returned here recently for a visit and was stunned at the sour public mood.

"I was shocked," he says. "I find it very scary."

An emergence of chaos

The Egyptian government has provided heavily subsidized bread for decades as a way to guarantee social peace in a nation where the nasbaseeta, or simple folk, have little control over the larger forces that buffet their lives.

The frustrating bread lines are mostly gone, but soaring prices for other foods are adding another burden to a population already under enormous stress. More than 40% of Egypt's 80 million people live on just $2 a day — what millions of Americans spend for a cup of coffee. Almost 20% get by on daily income of just $1.

On April 6, the latest in a string of mounting protests by disaffected workers seeking higher pay to keep up with double-digit inflation boiled over into riots in the textile capital of Mahalla.

Last week, in a rare show of public dissent, a Cairo University student heckled Prime Minister Ahmed Nazif during a speech.

The simmering unrest comes amid questions over Egypt's political future. President Hosni Mubarak — in office since the 1981 assassination of his predecessor, Anwar Sadat — turns 80 on Sunday. He is grooming his son Gamal to succeed him, but in this nominally democratic nation, many Egyptians resent the notion of what they regard as a "Pharaonic" succession. Opposition groups have called for Egyptians to stage a general strike on the president's birthday.

"We believe if the situation remains as it is, there will be the emergence of chaos in this country," says Ashraf Badr El-Din, a member of parliament from the opposition Muslim Brotherhood.

A worldwide threat

Bread plays a unique, almost mystical, role in Egyptian life. This is the only Arab country where people call the staple aish, or life, rather than khubz.

In the simple dusty villages far from the major cities, Egyptians developed 82 different types of bread, using corn, sorghum and barley as well as wheat, says Ahmed Khorshid, the government scientist known as the "father of bread" after a lifetime of research on the subject.

With the introduction of state subsidies in the 1960s, wheat bread became the standard. Today, Egypt is the largest importer of wheat in the world, placing annual orders of about 7 million tons, or roughly half its annual consumption.

Egypt's current predicament is just one facet of a global mosaic: 37 countries face a crisis over food, according to the United Nations' Food and Agriculture Organization.

Weak or embattled governments in some of the world's poorest nations could be pushed to the brink of anarchy or beyond by the life-or-death pressures of scarce or expensive food.

Already, Haiti's government has been driven from office by violent protests over prices that are 50% to 100% higher than last year. Seven other countries — Egypt, Cameroon, the Ivory Coast, Senegal, Burkina Faso, Indonesia and Madagascar — have suffered food riots.

Global food prices have risen 73% since 2006, but the increase for certain products has been even more dramatic. Edible oils are up 144%; cereals, including wheat and rice, are up 129%; dairy products have doubled in price.

World Bank President Robert Zoellick says the developing world's higher food bill will erase the past seven years of progress in reducing poverty. And prices are expected to remain elevated at least through 2009.

In Egypt, soaring food costs are straining government budgets and threatening to undermine 4-year-old economic reforms. Those market-oriented initiatives have spurred economic growth to an annual rate of 7% but are predicated upon sharp reductions in Egypt's bloated public subsidy bill.

The government was preparing to reduce spending that keeps food artificially cheap, but the global crisis forced Mubarak to reverse course.

Now, instead of cutting subsidies, he's dramatically increased them, staving off public discontent at the cost of a larger government deficit.

A government-fed problem

The WFP has labeled the spreading food crisis a "silent tsunami." But Egypt's food problem is no natural disaster. It's been compounded by government policies that distort markets.

The government keeps bread almost free — one loaf costs less than a penny — by subsidizing the wheat used to produce it.

However, the system is vulnerable to widespread corruption.

In recent months, as the global market price of wheat rose steadily higher, bakers began selling their subsidized flour to private bakeries rather than using it to make bread for the poor. Fifty-pound sacks of flour purchased from the government at a steep discount could be resold on the black market for roughly 10 times the subsidized price.

Diversions of subsidized flour occurred even as rising prices at the private bakeries caused more people to switch from buying their higher-priced bread to the cheaper version sold at the subsidized stores.

Market-priced bread, which had cost about 4 cents per loaf, jumped to almost 10 cents apiece as world grain prices soared. With less flour available to make bread even as more customers demanded it, the result was scarcity and long lines.

In March, Mubarak ordered the army to begin baking bread and distributing it through hastily established kiosks. Officials promised an end to bakery lines by the end of April.

By last week, there were indications that the acute phase of the episode had passed. But with food prices rising across the board at better than 20% annually, grumbling remains.

"The people are angry with the increase in prices. We don't know how to make ends meet," says Om Hashem Shaban, balancing on her head a torn white sack full of fresh bread.

Like the poor elsewhere, Egyptians cope with higher food prices by cutting back on expenditures for education and health care, says Bishow Parajuli, WFP country director.

To cope with fast-rising prices, Shaban says her family, including five children, eats less and occasionally skips meals. Most days, the menu usually consists only of bread.

Rice, Shaban says, "is more of a luxury item."

About 60 miles north of the Egyptian capital lies the country's agricultural heartland. Less than 3% of Egypt's territory is arable land. The best of it is found in the rich farmland of the Nile Delta.

Under a broiling sun, farmers trade rumors of the next move in commodities prices. Despite high prices for their crops, farmers here feel beset on all sides.

Their irrigation systems lack adequate maintenance. The cost of seeds and fertilizer has skyrocketed. Many pay rich landowners ever-higher rents for the right to work their modest lands. Those who own their own simple farms end up with smaller and smaller plots as each generation's inheritance subdivides farms among several sons.