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Egypt’s middle class cuts costs as IMF-backed reforms take hold
- The world lender has long backed measures in Egypt including a liberal currency exchange market and weaning the public away from subsidies
Cairo: Egypt’s economy has been in crisis for years, but as the latest round of International Monetary Fund-backed reforms bites, much of the country’s middle class has found itself struggling to afford goods once considered basics.
The world lender has long backed measures in Egypt including a liberal currency exchange market and weaning the public away from subsidies.
On the ground, that has translated into an eroding middle class with depleted purchasing power, turning into luxuries what were once considered necessities.
Nourhan Khaled, a 27-year-old private sector employee, has given up “perfumes and chocolates.”
“All my salary goes to transport and food,” she said as she perused items at a west Cairo supermarket, deciding what could stay and what needed to go.
For some, this has extended to cutting back on even the most basic goods — such as milk.
“We do not buy sweets anymore and we’ve cut down on milk,” said Zeinab Gamal, a 28-year-old housewife.
Most recently, Egypt hiked fuel prices by 17.5 percent last month, marking the third increase just this year.
Mounting pressures
The measures are among the conditions for an $8 billion IMF loan program, expanded this year from an initial $3 billion to address a severe economic crisis in the North African country.
“The lifestyle I grew up with has completely changed,” said Manar, a 38-year-old mother of two, who did not wish to give her full name.
She has taken on a part-time teaching job to increase her family’s income to 15,000 Egyptian pounds ($304), just so she can “afford luxuries like sports activities for their children.”
Her family has even trimmed their budget for meat, reducing their consumption from four times to “only two times per week.”
Egypt, the Arab world’s most populous country, is facing one of its worst economic crises ever.
Foreign debt quadrupled since 2015 to register $160.6 billion in the first quarter of 2024. Much of the debt is the result of financing for large-scale projects, including a new capital east of Cairo.
The war in Gaza has also worsened the country’s economic situation.
Repeated attacks on Red Sea shipping by Yemen’s Houthi rebels in solidarity with Palestinians in Gaza have resulted in Egypt’s vital Suez Canal — a key source of foreign currency — losing over 70 percent of its revenue this year.
Amid growing public frustration, officials have recently signalled a potential re-evaluation of the IMF program.
“If these challenges will make us put unbearable pressure on public opinion, then the situation must be reviewed with the IMF,” President Abdel Fattah El-Sisi said last month.
Prime Minister Mostafa Madbouly also ruled out any new financial burdens on Egyptians “in the coming period,” without specifying a timeframe.
Economists, however, say the reforms are already taking a toll.
Wael Gamal, director of the social justice unit at the Egyptian Initiative for Personal Rights, said they led to “a significant erosion in people’s living conditions” as prices of medicine, services and transportation soared.
He believes the IMF program could be implemented “over a longer period and in a more gradual manner.”
’Bitter pill to swallow’
Egypt has been here before. In 2016, a three-year $12-billion loan program brought sweeping reforms, kicking off the first of a series of currency devaluations that have decimated the Egyptian pound’s value over the years.
Egypt’s poverty rate stood at 29.7 percent in 2020, down slightly from 32.5 percent the previous year in 2019, according to the latest statistics by the country’s CAPMAS agency.
But Gamal said the current IMF-backed reforms have had a “more intense” effect on people.
“Two years ago, we had no trouble affording basics,” said Manar.
“Now, I think twice before buying essentials like food and clothing,” she added.
Earlier this month, the IMF’s managing director Kristalina Georgieva touted the program’s long-term impact, saying Egyptians “will see the benefits of these reforms in a more dynamic, more prosperous Egyptian economy.”
Her remarks came as the IMF began a delayed review of its loan program, which could unlock $1.2 billion in new financing for Egypt.
Economist and capital market specialist Wael El-Nahas described the loan as a “bitter pill to swallow,” but called it “a crucial tool” forcing the government to make “systematic” decisions.
Still, many remain skeptical.
“The government’s promises have never proven true,” Manar said.
Egyptian expatriates send about $30 billion in remittances per year, a major source of foreign currency.
Manar relies on her brother abroad for essentials, including instant coffee which now costs 400 Egyptian pounds (about $8) per jar.
“All I can think about now is what we will do if there are more price increases in the future,” she said.
The world lender has long backed measures in Egypt including a liberal currency exchange market and weaning the public away from subsidies.
On the ground, that has translated into an eroding middle class with depleted purchasing power, turning into luxuries what were once considered necessities.
Nourhan Khaled, a 27-year-old private sector employee, has given up “perfumes and chocolates.”
“All my salary goes to transport and food,” she said as she perused items at a west Cairo supermarket, deciding what could stay and what needed to go.
For some, this has extended to cutting back on even the most basic goods — such as milk.
“We do not buy sweets anymore and we’ve cut down on milk,” said Zeinab Gamal, a 28-year-old housewife.
Most recently, Egypt hiked fuel prices by 17.5 percent last month, marking the third increase just this year.
Mounting pressures
The measures are among the conditions for an $8 billion IMF loan program, expanded this year from an initial $3 billion to address a severe economic crisis in the North African country.
“The lifestyle I grew up with has completely changed,” said Manar, a 38-year-old mother of two, who did not wish to give her full name.
She has taken on a part-time teaching job to increase her family’s income to 15,000 Egyptian pounds ($304), just so she can “afford luxuries like sports activities for their children.”
Her family has even trimmed their budget for meat, reducing their consumption from four times to “only two times per week.”
Egypt, the Arab world’s most populous country, is facing one of its worst economic crises ever.
Foreign debt quadrupled since 2015 to register $160.6 billion in the first quarter of 2024. Much of the debt is the result of financing for large-scale projects, including a new capital east of Cairo.
The war in Gaza has also worsened the country’s economic situation.
Repeated attacks on Red Sea shipping by Yemen’s Houthi rebels in solidarity with Palestinians in Gaza have resulted in Egypt’s vital Suez Canal — a key source of foreign currency — losing over 70 percent of its revenue this year.
Amid growing public frustration, officials have recently signalled a potential re-evaluation of the IMF program.
“If these challenges will make us put unbearable pressure on public opinion, then the situation must be reviewed with the IMF,” President Abdel Fattah El-Sisi said last month.
Prime Minister Mostafa Madbouly also ruled out any new financial burdens on Egyptians “in the coming period,” without specifying a timeframe.
Economists, however, say the reforms are already taking a toll.
Wael Gamal, director of the social justice unit at the Egyptian Initiative for Personal Rights, said they led to “a significant erosion in people’s living conditions” as prices of medicine, services and transportation soared.
He believes the IMF program could be implemented “over a longer period and in a more gradual manner.”
’Bitter pill to swallow’
Egypt has been here before. In 2016, a three-year $12-billion loan program brought sweeping reforms, kicking off the first of a series of currency devaluations that have decimated the Egyptian pound’s value over the years.
Egypt’s poverty rate stood at 29.7 percent in 2020, down slightly from 32.5 percent the previous year in 2019, according to the latest statistics by the country’s CAPMAS agency.
But Gamal said the current IMF-backed reforms have had a “more intense” effect on people.
“Two years ago, we had no trouble affording basics,” said Manar.
“Now, I think twice before buying essentials like food and clothing,” she added.
Earlier this month, the IMF’s managing director Kristalina Georgieva touted the program’s long-term impact, saying Egyptians “will see the benefits of these reforms in a more dynamic, more prosperous Egyptian economy.”
Her remarks came as the IMF began a delayed review of its loan program, which could unlock $1.2 billion in new financing for Egypt.
Economist and capital market specialist Wael El-Nahas described the loan as a “bitter pill to swallow,” but called it “a crucial tool” forcing the government to make “systematic” decisions.
Still, many remain skeptical.
“The government’s promises have never proven true,” Manar said.
Egyptian expatriates send about $30 billion in remittances per year, a major source of foreign currency.
Manar relies on her brother abroad for essentials, including instant coffee which now costs 400 Egyptian pounds (about $8) per jar.
“All I can think about now is what we will do if there are more price increases in the future,” she said.
Egypt’s Logina Salah makes history at Miss Universe
DUBAI: Miss Universe Egypt Logina Salah made history when she broke into the top 30 at the grand finale of the Miss Universe 2024 beauty pageant, held in Mexico City on Sunday, making it the first time her country has made a placement in 73 years.
The glittering night came to a close with Miss Denmark Victoria Kjaer Theilvig taking home the crown — a first for a Dane. The 21-year-old, a competitive dancer, entrepreneur, and aspiring lawyer, beat more than 120 other contestants to win the annual beauty pageant.
Miss Nigeria Chidimma Adetshina was named first runner-up, and Miss Mexico Maria Fernanda Beltran was named the second runner-up. Contestants from Thailand, Bolivia, Venezuela, Argentina, Puerto Rico, Russia, Chile, Canada and Peru also made it to the top 12.
This year’s finale featured a performance by singer Robin Thicke and was hosted by “Saved by the Bell” star Mario Lopez and former Miss Universe Olivia Culpo.
Other contestants from the Middle East and North Africa region included the UAE’s Emilia Dobreva, Bahrain’s Shereen Ahmed, Lebanon’s Nada Koussa, and Iran’s Ava Vahneshan.
The pageant, in its 73rd year, also now sees married women and mothers compete.
“I feel like the world is getting closer to including everybody. It wasn’t allowed for moms to participate, or any woman above 30, and I didn’t like participating in ‘moms pageantry’; I do not like labeling,” Salah, who is based in Dubai, said in an earlier interview with Arab News of the rules that changed in 2023.
She added: “When those restrictions were lifted, I saw it as the perfect opportunity. Pageantry was always on my mind, but I always said, ‘Let me keep it for my daughter, maybe she would be interested.’ I used to dream about it, but now the dream came back to life. I applied, and, thank God, I made it to Miss Universe!”
Reflecting on her journey with vitiligo, Salah highlighted the power of living as an example. “I do not come every day and talk about vitiligo on my platform, but living my life fearlessly and unapologetically is a message to people,” she said.
“When someone comes across my profile and they see me living fearlessly, this is an inspiration. So, I do both. I like to go out and inspire, not only for people with vitiligo, but for all young girls and women.”
Bahrain Airshow concludes with key deals, record aircraft displays
- Three-day showcase attracted over 55,000 industry professionals and visitors
- Defense forums showcased advancements in combat technology
MANAMA: The Bahrain International Airshow 2024 concluded with a flurry of major business deals, including a contract between Bahrain’s Ministry of Transportation and Telecommunications and Leonardo to modernize the country’s air traffic radar and surveillance systems.
The agreement is set to enhance Bahrain International Airport’s efficiency and safety through advanced primary and secondary radar technologies.
The seventh edition of the airshow, held on Nov. 13 — 15 at Sakhir Air Base, set a record with over 125 aircraft displayed, a 25 percent increase from the previous event.
The event saw Bahrain’s national carrier Gulf Air extending its long-standing collaboration with Amman-based Joramco, boosting maintenance, repair, and overhaul capabilities.
Other key agreements included a partnership between Infracorp and Mena Aerospace to develop specialized aircraft hangars to position Bahrain as a regional hub for advanced aviation services.
The event also saw Valo Aviation secure Bahrain’s first business jet operator license, with plans to operate 15 aircraft by 2026, and a strategic cybersecurity alliance between Iron Net and Asterion to bolster critical infrastructure protection.
Aircraft showcases
Debut appearances at the event included the US Department of Defense’s B-52H Stratofortress and flydubai’s latest static display models.
The three-day showcase, inaugurated by Bahrain’s Crown Prince Salman bin Hamad on behalf of King Hamad, attracted over 40,000 industry professionals and visitors.
After touring the exhibition, Crown Prince Salman emphasized Bahrain’s focus on priority sectors as drivers of economic diversification, national development, and progress. He highlighted the role of the kingdom’s national talent in sustaining achievements and shaping future aspirations, according to the state news agency.
He underscored the importance of strategic sectors in supporting his country’s ambitions and contributing to its comprehensive development journey under the leadership of the monarch. He also reaffirmed Bahrain’s strong tradition of hosting successful international exhibitions and conferences, stressing the importance of maintaining this legacy.
Air displays included performances by the Saudi Hawks, Bahrain’s F-16s, and the US Navy’s P-8 Poseidon, showcasing their capabilities. Static displays featured a range of aircraft, including Gulf Air’s B787-9 and the Pakistan Air Force’s JF-17.
The Saudi Hawks team showcased green, red, and white trails in a nod to the strong ties between Saudi Arabia and Bahrain.
The Royal Saudi Air Force’s Typhoon, piloted by Maj. Faris bin Ali Al-Zahrani, demonstrated its capabilities with a series of maneuvers and high-speed passes.
Organized by Bahrain’s Ministry of Transportation, the Royal Bahrain Air Force, and Farnborough International, the event underscored the kingdom’s position as a global aviation hub.
Sustainability and innovation
Sustainability dominated discussions at the Airport and Airlines Forum, where executives from Gulf Air Group, Airbus, and Rolls-Royce explored the adoption of sustainable aviation fuel and net-zero technologies. Regulatory support and innovation were highlighted as essential to making sustainable aviation fuel commercially viable.
Mohammad Al-Khuraisi, vice president of strategy and business intelligence at the Saudi General Authority of Civil Aviation, said the agency’s participation in the Bahrain International Airshow highlights his country’s achievements in aviation, showcases the key pillars of the Kingdom’s aviation strategy, and presents future investment opportunities.
Ali Rajab, GACA’s executive vice president of Air Transport and International Cooperation, said the authority’s presence at the event underscores new regulations aimed at fostering growth and innovation in the aviation sector.
Rajab added that the Saudi aviation strategy, which targets $100 billion in investment and aims to increase annual passenger numbers to 330 million, serves as the foundation for these advancements.
Defense forums showcased advancements in combat technology, including autonomous systems, AI-driven cybersecurity, and electronic warfare, emphasizing the importance of collaboration between governments and the private sector.
Aviation milestones
Bahrain International Airport was recognized as the world’s first to receive the International Air Transport Association’s Environmental Assessment Certification, aligning with the kingdom’s broader sustainability goals.
Bahrain’s National Space Science Agency also announced an initiative to train 100 students in satellite image analysis and space science, part of its STEM-focused educational efforts.
Growing reputation
At a press conference, Sheikh Abdullah bin Ahmed, chairman of the airshow’s supreme organizing committee, expressed pride in its success in attracting leading global companies and organizations.
“This is by far the most successful international airshow hosted in Bahrain in terms of connectivity, engagement, and diversity,” said Sheikh Abdullah.
He added: “Bahrain is a strategic hub for the aviation industry, and this year, we are celebrating 75 years of aviation. Bahrain has consistently played a pivotal role in fostering regional growth and innovation.”
The chairman said the numerous agreements and deals signed during the event reflect Bahrain’s growing global stature, with the strong turnout of exhibitors, participants, and visitors further cementing the kingdom’s reputation as a hub for excellence and innovation.
Sheikh Abdullah highlighted Bahrain’s ongoing success in hosting major international events, positioning it as a preferred destination for business and innovation.
“This year’s edition of the airshow has already welcomed 40,000 international and regional aerospace professionals, delegates, and visitors, with expectations to surpass 55,000 by the end of the day.”
He also said that the airshow is a key driver for the aviation sector, aligning with Bahrain’s vision for technological advancement and creative growth.
With 177 organizations participating and 80 percent of exhibitors being international, the biennial event underscored Bahrain’s commitment to its Economic Vision 2030 by fostering investment, digital transformation, and sustainable growth.
Pakistan unveils first Carbon Market Policy to attract green investment, curb pollution
- Pakistan wants to transition toward a low-carbon economy, says PM’s coordinator on climate change
- Carbon markets refer to systems that reduce greenhouse gas emissions by offering financial incentives
ISLAMABAD: Pakistan’s Coordinator to the Prime Minister on Climate Change Romina Khurshid Alam on Sunday unveiled the country’s first National Carbon Market Policy, saying that the government wanted to attract investments in green initiatives and transition toward a low-carbon economy.
Carbon markets refer to systems that aim to reduce greenhouse gas emissions by allowing companies or organizations to buy and sell “carbon credits.” This is achieved by offering financial incentives to these entities to cut emissions.
Pakistan is ranked the 5th most vulnerable country to climate change, according to the Global Climate Risk Index. In 2022, devastating floods killed over 1,700 people and affected over 33 million, with economic losses exceeding $30 billion. International donors pledged over $9 billion last January to aid Pakistan’s flood recovery but officials say little of the promised funds have been received so far.
“Let me say this confidently that Pakistan is now ready to lead, innovate and collaborate with local private sector as well as international partners for the development of carbon markets to attract investments in green initiatives for achieving climate goals under the Paris climate pact,” Alam said in a statement.
Alam was attending an event held at the Pakistan Pavilion in Baku, during the sidelines of the global COP29 climate conference, to launch the country’s first carbon market policy. The event was attended by members of international civil society organizations, delegation members of different countries, academia, researchers, policymakers and journalists.
“By participating in such markets, Pakistan can incentivize businesses and industries to adopt cleaner technologies and practices,” she said.
Alam said the success of Pakistan’s carbon markets will depend on its ability to collaborate with international partners.
“We welcome partnerships with international investors, organizations, and governments to ensure that this market becomes a regional and global success story,” she said.
Pakistani Prime Minister Shehbaz Sharif, who spoke at a number of events at COP29 earlier this week, used the forum to highlight the need to restore confidence in the pledging process and increase climate finance for vulnerable, developing countries.
The main task for nearly 200 countries at the COP29 summit from Nov. 11-22 is to broker a deal that ensures up to trillions of dollars in financing for climate projects worldwide.
‘Bright is an understatement’ says Golf Saudi CEO about the sport’s future in the Kingdom
- Noah Alireza speaks to Arab News about the Aramco Team Series, the GoGolf programs and producing homegrown talent
On a weekend that included the start of the WTA Finals in Riyadh, WWE Crown Jewel, as well as the Riyadh, Jeddah and Dammam derbies in the Saudi Pro League, you could be forgiven for thinking there was any space left for any other sporting event to shine.
But golf’s Aramco Team Series — Riyadh, however, more than held its own and even drew in higher crowds than some of the rival events. The aim, said Golf Saudi CEO Noah Alireza, is to spread the golfing gospel.
“Our focus on global events comes with a primary objective of growing the game locally,” Alireza said. “(At Aramco Team Series) we (saw) a really vibrant crowd thatwas really getting into it.
“It’s all about creating the right environment and with this crowd being here as a captive audience, we, as much as possible, push towards them signing up for GoGolf, the program, and converting them into future golfers.”
As the 2024 golf season draws to a close, Alireza said that his federation’s mandate is to act as an “catalyst and incubator” to create a golf industry.
“For us in Saudi, we have a blank canvas,” Alireza told Arab News. “We’re starting from scratch, and that provides an opportunity not to catch up, but hopefully to leapfrog because as is everything (in the Kingdom) today, Saudi doesn’t look at things in terms of just taking what was there and bringing it here. It’s taking and learning from what was, and doing it better.
“So for us to grow the game in Saudi Arabia, our primary focus today is on the development of innovative supply and infrastructure, and hopefully when we build it, the demand will catch up and that’s how we're going to hopefully be creating a viable ecosystem for golf.”
One of the ways that Golf Saudi is looking to increase participation in the game, in accordance with Vision 2030, is through its GoGolf programs.
“GoGulf is for us a complete product from end to end to get people from Saudi and living in Saudi Arabia to get into Golf. So we’re starting with a program that answers the question why golf? What is golf? And then a call to action is GoGolf. GoGolf is a three-month (program), maybe you can look at it as getting a license to drive.”
Alireza appreciates that taking up golf comes with a significant sporting and financial dedication, and GoGolf aims to give budding players an early advantage.
“Golf is not an easy game to play. In order to break that barrier, three months’ worth of free lessons, or a package of 12 free lessons, will get you the license to be able to play on golf courses and other areas. So it’s a teaching methodology, but beyond the teaching phase, there is other infrastructure under the GoGolf brand that we will be deploying in addition to other things we’ve launched outside golf courses, like Top Golf — a project that’s going to be taking place over the next year and a half.”
Alireza has a message for parents looking to introduce their children to new sports and activities: “The choices are plenty to get kids into sports, and all sports will teach kids certain traits,” he said. “Whether it is discipline, motivation and so many other traits.
“Growing up around golf, I had the opportunity to see it first hand, and golf is slightly different from other sports in that it takes up so much time and you’re moving an object, you’re not reacting to a ball, you’re having to impart impact on to a ball and a lot of time in between there are so many things that you have to exercise. Patience, resilience, determination, the seeking of perfection and getting better every day, and I believe those traits are really good traits to start to ingrain into kids, and hopefully one day from that some of the kids will specialize in golf and create those future champions that we’re looking to create.”
Alireza is bullish about golf’s trajectory in the Kingdom over the coming years.
“Bright is an understatement,” he said. “With the incredible support that we’re seeing in Saudi Arabia today across all the sectors, we have an incredible opportunity to bring the world of golf here to co-innovate with us on creating a platform that defines what future golf will be in terms of the infrastructure, golf courses, practice facilities and beyond.”
While there are several Saudi golfers already making moves in the professional game, Alireza’s aim is to see a whole generation of golfers emerging from the Kingdom over the next decade.
“I think it's important that we focus on building that generation for two important reasons,” he said. “No.1 is that creating champions is an element that we’ve seen as a story throughout history that helps generate future generations of champions.
“So when Saudi beat Argentina in the World Cup, that was a generational moment that not only created future football stars but athletes in general,” Alireza said. “Everyone could now believe if somebody that I know of that is from my city, my country can do it, then so can I. And that element, that barrier, as a threshold is extremely important. So for us, the focus on creating those champions is really important because then it goes to the second reason.”
“The second reason is that that tipping point, when that champion is created, inshallah, and our goal is to have that happen within the next five to 10 years, is that it creates a whole new generation of golfers that sustains the golf economy that we’re seeking to create.”
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