News / Middle East

Minister: Halting Egypt's Wheat Imports was Morsi's Biggest Mistake

Mohamed Abu Shadi, Egypt's new supply minister, speaks to the media at his office in Cairo, July 17, 2013.
Mohamed Abu Shadi, Egypt's new supply minister, speaks to the media at his office in Cairo, July 17, 2013.
Reuters
The biggest mistake deposed Egyptian President Mohamed Morsi made was stopping wheat imports, Egypt's new minister of supplies said, pledging to ensure that supplies of a strategic good like wheat do not reach the critically low levels they did during Morsi's year in office.

Mohamed Abu Shadi, a 62-year-old former police general with a doctorate in economics, said Morsi's government made "incorrect calculations" regarding Egypt's wheat stocks.

The estimates made by former supplies minister Bassem Ouda, who hails from Morsi's Muslim Brotherhood, were "based on guesses, not on facts," Abu Shadi told Reuters in an interview.

When asked why Morsi's administration was unable to accurately assess its wheat stocks, a crucial issue for a country where much of the population of 84 million relies on heavily subsidized loaves of bread, Abu Shadi replied: "That was why he left."

Abu Shadi said Egypt's current stocks of wheat were enough to last until Nov. 25 adding that after the arrival of 480,000 tonnes purchased this month, Egypt would have stocks to last until the end of the year.

Abu Shadi said the military-backed interim government would aim to increase total stocks to between 5 million and 6.5 million tonnes by the end of Egypt's current fiscal year next June. He said the government currently had reserves of 3-6 million to 3.7 million tonnes of local wheat and 500,000 of imported wheat.

Sworn in last week as part of the military-backed interim government running the country, Abu Shadi is in charge of regulating wheat stocks and dealing with the subsidized fuel and bread system that eats up almost a quarter of the state's budget.

Bread has long been a sensitive issue in Egypt. Mubarak faced unrest in 2008 when the rising price of wheat caused shortages. Similar problems in the 1970s provoked riots against former President Anwar Sadat.

Egypt is the world's largest importer of wheat, but it froze its international purchase for months, from February until the eve of Morsi's overthrow on July 3, hoping for a bigger domestic crop. It was its longest absence from the market in years.

Although it also grows its own wheat, Egypt still needs huge quantities of foreign wheat with higher gluten content to make flour suitable for subsidized bread.

Abu Shadi ordered the purchase of 300,000 tonnes of Romanian, Ukrainian, and Russian wheat on Thursday, his second day in office. It dwarfed a July 2 tender of 180,000 tonnes ordered by his Morsi-era predecessor Ouda.

Mamdouh Abdel Fattah, who managed Thursday's purchase, said days after Morsi's overthrow this month that Egypt was unlikely to buy wheat from abroad any time soon.

Fattah is the vice chairman of the state grain buying agency, the General Authority for Supply Commodities (GASC). The agency typically announces tenders the night before they occur.

The 300,000-tonne purchase was the new minister's first step to boost dwindling stocks of imported wheat that Ouda told Reuters on July 11 were only enough to last for two months.

A farmer harvests wheat on a field in the El-Menoufia governorate, about 9.94 km (58 miles) north of Cairo, Egypt, April 23, 2013.A farmer harvests wheat on a field in the El-Menoufia governorate, about 9.94 km (58 miles) north of Cairo, Egypt, April 23, 2013.
x
A farmer harvests wheat on a field in the El-Menoufia governorate, about 9.94 km (58 miles) north of Cairo, Egypt, April 23, 2013.
A farmer harvests wheat on a field in the El-Menoufia governorate, about 9.94 km (58 miles) north of Cairo, Egypt, April 23, 2013.
Morsi's ousted government had said it would purchase 4 million to 5 million tonnes of local wheat but had only bought 3.7 million tonnes of home-grown wheat during the harvest which ended last month.

Re-supplying

Political turmoil and street violence since the January 2011 uprising that ousted veteran autocrat Hosni Mubarak have steadily driven Egypt into a deep economic crisis, scaring off investors and tourists and draining foreign currency reserves needed to secure critical imports like wheat and fuel.

Abu Shadi said he was optimistic that the economy would begin to recover, saying this would come as the political and security situation stabilized, but did not give details on how the government would pay for his plans for rebuilding stocks.

He said he did not have details of his ministry's budget, but said that a recent package of $12 billion in loans and grants from Gulf nations was enough to support Egypt through the transition, echoing similar comments by the new planning minister last week.

Abu Shadi said he would work to boost next season's local wheat harvest, which runs from April to June, to reduce dependence on imports.

But the minister said international purchases would continue. "We are open to everyone," he said, saying the government would "definitely" issue more tenders, though he did not specify when.

He singled out Russia, one of Egypt's main wheat suppliers, saying that his ministry would speak with officials there "within days" to discuss price and payment facilities. Russia's Agriculture Ministry offered last week to hold discussions on possible humanitarian deliveries of wheat to Egypt.

Abu Shadi dismissed that possibility: "No one gives a grant of wheat," he said.

"Protecting" subsidies

In his previous work as a senior official in the Supplies Ministry, he built a reputation for targeting theft and corruption in a subsidies scheme that is notorious for being abused.

But the current state of the supply system shows that his efforts had limited success. Bread and fuel subsidies eat up more than 106 billion Egyptian pounds ($15.14 billion) annually.

Despite his plans to purchase more imported wheat and increase local production, Abu Shadi did not reveal any parallel plans to clamp down on waste and losses in the supply system that could help to plug a budget deficit that has ballooned since the 2011 uprising.

Admitting it would not be possible to completely stop fuel smuggling or corruption in the subsidized bread system, Abu Shadi said increased security measures were the answer to targeting "criminals".

He pledged to "protect" the subsidies system for "those who need it", and said any reforms to the system would only happen after securing broad consensus from all groups with the consumers of the products being the priority.

Reform of the broken system was viewed as a prerequisite to securing a $4.8 billion loan from the International Monetary Fund that Morsi's administration had sought this year.

Months of talks ran aground with the government unable to agree to steep cuts to the unaffordable food and fuel subsidies.

He also said the government would go ahead with a smart card system pushed by Morsi's government in an attempt to reduce the state's expensive energy bill, another step towards meeting the IMF's terms for the loan.

"We will complete the system of smart cards... it will be the beginning of the citizen's right to obtain the quantities they want and after a period, we will determine the consumption amount for citizens."

($1 = 7.0025 Egyptian pounds)

You May Like

IS Militants Release 49 Turkish Hostages

Turkey's state-run Anadolu news agency reports that no ransom was paid and no conditions accepted for the hostages' release; few details of the release are known More

Photogallery IS Attacks Send Thousands of Syrian Kurds Fleeing to Turkey

Syrian Observatory for Human Rights says more than 300 Kurdish fighters crossed into Syria from Turkey to defend a Kurdish area from attack by the Islamic militants More

Video Sierra Leone's Ebola Lockdown Continues

Thousands of health workers are going door to door in the West African country of 6 million, informing people of how to avoid Ebola, handing out soap More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Fears Ebola Outbreak ‘Beyond Our Capability to Contain’i
X
Jeff Seldin
September 20, 2014 10:28 PM
Each day brings with it new warnings about the deadly Ebola outbreak already blamed for killing more than 2,600 people across West Africa. And while countries and international organizations like the United Nations are starting to come through on promises of help for those most affected, the unprecedented speed with which the virus has spread is raising questions about the international response. VOA's Jeff Seldin has more from Washington.
Video

Video Fears Ebola Outbreak ‘Beyond Our Capability to Contain’

Each day brings with it new warnings about the deadly Ebola outbreak already blamed for killing more than 2,600 people across West Africa. And while countries and international organizations like the United Nations are starting to come through on promises of help for those most affected, the unprecedented speed with which the virus has spread is raising questions about the international response. VOA's Jeff Seldin has more from Washington.
Video

Video Iran, World Powers Seek Progress in Nuclear Talks

Iran and the five permanent members of the U.N. Security Council plus Germany, known as the P5 + 1, have started a new round of talks on Iran's nuclear program. VOA State Department correspondent Pam Dockins reports that as the negotiations take place in New York, a U.S. envoy is questioning Iran's commitment to peaceful nuclear activity.
Video

Video Obama Goes to UN With Islamic State, Ebola on Agenda

President Obama goes to the United Nations General Assembly to rally nations to support a coalition against Islamic State militants in Iraq and Syria. He also will look for nations to back his plan to fight the Ebola virus in West Africa. As VOA White House correspondent Luis Ramirez reports, Obama’s efforts reflect new moves by the U.S. administration to take a leading role in addressing world crises.
Video

Video Migrants Caught in No-Man's Land Called Calais

The deaths of hundreds of migrants in the Mediterranean this week has only recast the spotlight on the perils of reaching Europe. And for those forunate enough to reach a place like Calais, France, only find that their problems aren't over. Lisa Bryant has the story.
Video

Video Westgate Siege Anniversary Brings Back Painful Memories

One year after it happened, the survivors of the terror attack on Nairobi's Westgate Shopping Mall still cannot shake the images of that tragic incident. For VOA, Mohammed Yusuf tells the story of victims still waiting for the answer to the question 'how could this happen?'
Video

Video Militant Assault in Syria Displaces Thousands of Kurds

A major assault by Islamic State militants on Kurds in Syria has sent a wave of new refugees to the Turkish border, where they were stopped by Turkish border security. Turkey is already hosting about 700,000 Syrian refugees who fled the civil war between the government and the opposition. But the government in Ankara has a history of strained relations with Turkey's Kurdish minority. Zlatica Hoke reports Turkey is asking for international help.
Video

Video Whaling Summit Votes to Uphold Ban on Japan Whale Hunt

The International Whaling Commission, meeting in Slovenia, has voted to uphold a court ruling banning Japan from hunting whales in the Antarctic Ocean. Conservationists hailed the ruling as a victory, but Tokyo says it will submit revised plans for a whale hunt in 2015. Henry Ridgwell reports from London.
Video

Video A Dinosaur Fit for Land and Water

Residents and tourists in Washington D.C. can now examine a life-size replica of an unusual dinosaur that lived almost a hundred million years ago in northern Africa. Scientists say studying the behemoth named Spinosaurus helps them better understand how some prehistoric animals adapted to life on land and in water. The Spinosaurus replica is on display at the National Geographic museum. VOA’s George Putic has more.
Video

Video Iraqi Kurdistan Church Helps Christian Children Cope find shelter in churches in the Kurdish capital, Irbil

In the past six weeks, tens of thousands of Iraqi Christians have been forced to flee their homes by Islamic State militants and find shelter in churches in the Kurdish capital, Irbil. Despite U.S. airstrikes in the region, the prospect of people returning home is still very low and concerns are starting to grow over the impact this is having on the displaced youth. Sebastian Meyer reports from Irbil on how one church is coping.


Carnage and mayhem are part of daily life in northern Nigeria, the result of a terror campaign by the Islamist group Boko Haram. Fears are growing that Nigeria’s government may not know how to counter it, and may be making things worse. More

AppleAndroid