Over the last two years, my barber’s political allegiance has swung like a pendulum. Invigorated with hope after the revolution, scissors-armed Hassan saw a new Egypt where economic power would finally shift away from the privileged few and into the hands of the people, including small business owners like himself. It was the chance for new leaders with fresh solutions to guide Egypt to new peaks. Hassan, along with a majority of his countrymen, helped the Muslim Brotherhood’s Freedom and Justice Party and the Salafist Nour Party win 65 percent of the seats in the November 2011 People’s Assembly elections, and 83 percent of the Shura Council soon after. Come May 2012, Hassan saw no improvement in his countrymen’s livelihoods, and he put his vote behind liberal presidential candidate Amr Moussa. Hassan had become increasingly aware that the Islamists lacked the experience needed to run a country and its economy. By the time the runoffs came around, Hassan could not pick between the lesser of two evils. The pride that Hassan felt two years ago, along with ownership in the political process, have all but disappeared today. Showing no interest in the upcoming parliamentary elections, Hassan now fantasizes about resurrecting Mubarak or a return of military rule. Back then, he had regular customers and could earn an honest living.
Ultimately, what it boils down to is the feeling of deception among the average low- to middle-income earning Egyptian. Promises of economic empowerment were replaced by increased hardship. Be it barbers, taxi drivers, or kiosk owners, the complaints are consistent – fewer customers, leaner tips, and higher bills. Consumption patterns have indeed changed in the last two years. According to a survey released this month by the government’s think tank – the Information and Decision Support Center (IDSC) – nearly two-thirds of respondents said they cut their own consumption to compensate for lower income. In fact, 57.5 percent of Egyptians did not have enough income to make ends meet in May 2012, up from 45 percent in the same month a year earlier. Basic goods such as medicine and mobile phone services have already seen price increases; the former due to rising import costs in the wake of the Egyptian pound’s depreciation, and the latter a result of proposed tax increases. Anticipated price increases, especially in the energy sector, are set to hurt households further. Gasoline price increases of three to five times are now on the agenda, for example. Truck drivers worry about diesel shortages and Hassan may see fewer customers this summer if frequent power cuts mean he cannot keep his barber shop cool.
IDSC reported that the average monthly family expenditure in May 2012 was 1,265 Egyptian pounds (Then approximately $200). With prices going up, the figure is expected to be considerably higher this year. As expenses go up, there has not been any serious progress on raising the farcically low monthly minimum wage of 34 Egyptian pounds ($5), which has not changed since it was set in 1984. Attempts to implement a 700 Egyptian pound minimum wage in January 2012 fizzled, and today the Shura Council is debating a 1,200 minimum – a figure labor activists criticize for being outdated and below the 1,500 that would constitute a living wage. It is doubtful that any meaningful legislation will pass until the House of Representatives (as the People’s Assembly is now referred to) is elected.
The widening gap between expenses and earnings is increasing the economic vulnerability of a significant portion of the population. In 2010, the African Development Bank classified 48 percent of Egyptians as belonging to a ‘floating class’, constituting those who earn between $2 and $4 per day. These are people like Hassan, who are already hanging on by their fingernails and now run the risk of being pushed off the cliff.
Economic hardships have been exacerbated by a growing number of strikes and demonstrations: last year saw 3,300 strikes, almost tripling from 1,300 a year earlier. Sit-ins and protests increase the strain in large swaths of the labor market from tour guides to microbus drivers, and pack a significant macroeconomic impact: this month, Finance Minister El Morsi Hegazy said that labor unrest has been causing daily economic losses of $15 million.
Worsening economic conditions have eroded Egyptians’ faith in new leaders. In turn, the development of Egypt’s nascent political process is set back by frequent voter shifts. This fuels a vicious cycle that leaves the political sphere immature and unstable.
The Egyptian public opinion polling company Baseera has been regularly checking the political pulse. President Mohamed Morsi’s approval rating tumbled from 78 percent at the end of his first 100 days in office to 53 percent at the end of January and to 49 percent at the end of February. While this may indicate a growing discontent with Morsi, disillusioned voters are not enthusiastic about the alternatives either.
As coalitions form and coalesce at a quickening pace, many Egyptians are struggling to keep up with who’s who and what they stand for. This month, Baseera found that more than one-third of Egyptians have not even heard of the leading opposition movement, the National Salvation Front. Of those who had heard of the movement, more than half oppose their policies. The latest development is the birth of the ‘National Revolutionary Movements’ bloc last week, with an ambiguous goal of linking revolutionary action to political action.
One can understand why the Hassans of Egypt have lost faith in the political process. Some parties have called for boycotting elections while others refuse to participate in shallow ‘National Dialogue’. Meanwhile, parliamentary election dates were announced, changed, canceled, and appealed – all within a month.
To win Hassan back, politicians must remember the reason for his initial excitement. He needs to be able to regain his voice. Aside from high level National Dialogue, politicians should create a platform to involve Egyptians at a more grassroots level. Hassan wants to know where his taxes are going, he wants to understand why so little is being spent on healthcare and education. The more average Egyptians understand the budget process, the more invested they will feel in the overall economy, and the more willing they will be to accept some painful cuts for the greater good. Ideally, policymakers should build a mechanism to involve citizens, but at the very least, they should make the budget more transparent. Every finance minister during the transition has said the budget is available for anyone to read, but parts remain unintelligible to even the financially-trained eye. In a just-released 2012 index by the International Budget Partnership, Egypt fell into the lowest category for budget transparency, scoring 13 out of 100 with “scant or no information”. A simplified version of the budget would be a good start to eventually making the budgetary process more participatory.
While there are no quick-fix solutions, greater transparency and a clear reckoning with structural issues is an essential first step. As I left Hassan with a generous tip this month, I lamented that this immediate injection will do nothing for him in the big picture. Sadly, for the disenchanted and disenfranchised Egyptian, the current political circus is not yielding any attractive alternative for the longer term.
Mustansir Barma is a political economist and is presently the Senior Economic Researcher with the American Chamber of Commerce in Egypt.
Photo: Hossam el-Hamalawy
Image: Workers%20Strike%20Hossam%20al%20Hamalawy.jpg