News / Economy

Preparing Egyptians for Austerity, Sissi Cuts Own Pay

FILE - Members of the presidential guard surround the motorcade of Egypt's President Abdel Fattah al-Sissi in Cairo June 8, 2014.
FILE - Members of the presidential guard surround the motorcade of Egypt's President Abdel Fattah al-Sissi in Cairo June 8, 2014.
Reuters
Egypt's new president pledged on Tuesday to give up half his salary and property and called on the Egyptian people to make similar sacrifices, in a bid to prepare the public for a period of painful economic austerity.
 
In an impromptu speech at a military graduation ceremony, Abdel Fattah al-Sissi said he had refused to sign off on a 2014/15 budget proposal following lengthy discussions this week because it was too dependent on ballooning borrowing.
 
“We said we would revise this budget because I cannot bear to accept it when it contains this level of deficit,” he said.
 
“I want to think of the children that are coming and to leave them something good, but this way we will leave them nothing. If the debt keeps accumulating like this, we won't leave them anything good.”
 
The comments appeared designed to ready public opinion for further austerity measures, such as subsidy reductions, to allow for deeper reforms of the ailing economy.
 
Egypt's budget deficit reached 14 percent of economic output in the last fiscal year, which ended in June 2013 and the economy is forecast to grow just 3.2 percent in the fiscal year that begins on July 1. That is well below the level needed to create enough jobs for its rapidly growing population of 86 million and alleviate widespread poverty.
 
The turmoil of the last three years, in which two presidents have been overthrown and hundreds of people killed in the streets, have battered tourism and investment, worsening a huge unemployment problem and pushing up the deficit.
 
The government will also have to tackle the legacy of decades of corruption and red tape and a costly subsidy system - food and fuel subsidies alone consume about a quarter of total government spending.
 
Half pay
 
Over the past two years, Egypt has depended on aid from wealthy Gulf Arab allies who sent more than $20 billion worth of grants, loans and petroleum products, according to numbers given by Sissi during his election campaign.
 
The aid has kept the Egyptian economy from sinking but Sissi said the country could not keep turning to its lenders and donors forever and would have to take difficult cost-cutting measures in order to balance its books.
 
Speaking in the local dialect of Arabic used by ordinary Egyptians, Sissi proposed to lead by example, giving up some of his own pay and vowing to apply a salary cap for higher earners in the public sector.
 
“There must be real sacrifices from every Egyptian man and woman. I take the maximum salary of 42,000 pounds ($5,900) and no one will take more than the maximum,” he said.
 
“I am going to do two things: I am not going to take half of this sum and my property, even what I inherited from my father, I will give up half for the sake of our country.”
 
It was not clear what would happen to Sissi's properties.
 
The president called on Egyptians inside and outside the country to make personal sacrifices for the greater good and said the demands of vested interests or individual factions would no longer be pandered to.
 
A news flash on state television hours after the speech said an account had been opened at the central bank to collect donations in support of Egypt's economy.
 
Attempt to break with past

Sissi's comments, and his frank and informal manner, appeared designed to set him apart from Hosni Mubarak, another former military man who was overthrown in 2011 after 30 years in power.
 
Mubarak's rule was characterized by crony capitalism, stoking public discontent that helped to fuel the uprising.
 
But his call for Egyptians to tighten their belts may ring hollow to the millions who already struggle with multiple low-paying jobs to make ends meet.
 
Sissi's message that it was up to ordinary citizens to step up and work hard alienated poorer Egyptians during the election campaign and deterred some on the poverty line from voting.
 
Successive governments have tried to steer a course between boosting revenues without discouraging investors.
 
Sissi ousted elected Islamist President Mohamed Morsi last July, following mass protests against his rule.
 
Though Morsi had failed to win the trust of the Egyptian business community or attract foreign backing, bringing the economy to the edge of bankruptcy, his downfall prompted a wave of violence and protests that only deepened the crisis.
 
But Sissi's speech is likely to be welcomed by the business community, that has long called for Egypt's economic challenges to take center stage in policy making.
 
“The elephant in the room is that historically no one discussed economics in public. At last someone is bringing the economic debate to the public,” said Angus Blair, chairman of business and economic forecasting think-tank Signet.

You May Like

Karzai's Legacy: Missed Opportunities?

Afghanistan's president leaves behind a much different nation than the one he inherited, yet his legacy from 13 years in power is getting mixed reviews More

US Urges Restraint in Hong Kong Protests

Protesters angered by Beijing's decision to only approve candidates that it sanctions for Hong Kong's leadership elections in 2017 More

Archive of Forgotten UCLA Speeches Offers Snapshot of History

Recordings of prominent voices in social change, politics, science and literature from 1960s, early 1970s now available on YouTube More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Treasure Hunters Seek 'Hidden Treasure' in Central Kenyai
X
Gabe Joselow
September 29, 2014 6:20 PM
Could a cave in a small village in central Kenya be the site of buried treasure? A rumor of riches, left behind by colonialists, has some residents dreaming of wealth, while others see it as a dangerous hoax. VOA's Gabe Joselow has the story.
Video

Video Treasure Hunters Seek 'Hidden Treasure' in Central Kenya

Could a cave in a small village in central Kenya be the site of buried treasure? A rumor of riches, left behind by colonialists, has some residents dreaming of wealth, while others see it as a dangerous hoax. VOA's Gabe Joselow has the story.
Video

Video Iran's Rouhani Skeptical on Syria Strikes

Iranian President Hassan Rouhani expressed skepticism Friday that U.S.-led airstrikes in Iraq and Syria could crush Islamic State militants. From New York, VOA’s Margaret Besheer reports the president was also hopeful that questions about Iran’s nuclear program could be resolved soon.
Video

Video US House Speaker: Congress Should Debate Authorization Against IS

As wave after wave of U.S. airstrikes target Islamic State militants, the speaker of the Republican-controlled House of Representatives says he would be willing to call Congress back into session to debate a formal, broad authorization for the use of military force. VOA’s Michael Bowman reports from Washington, where legislators left town 10 days ago for a seven-week recess.
Video

Video Ebola Patients Find No Treatment at Sierra Leone Holding Center

At a holding facility in Makeni, central Sierra Leone, dozens of sick people sit on the floor in an empty university building. They wait in filthy conditions. It's a 16-hour drive by ambulance to Kailahun Ebola treatment center. Adam Bailes was there and reports on what he says are some of the worst situations he has seen since the beginning of this Ebola outbreak. And he says it appears case numbers may already be far worse than authorities acknowledge.
Video

Video Identifying Bodies Found in Texas Border Region

Thousands of immigrants have died after crossing the border from Mexico into remote areas of the southwestern United States in recent years. Local officials in south Texas alone have found hundreds of unidentified bodies and buried them in mass graves in local cemeteries. Now an anthropologist and her students at Baylor University have been exhuming bodies and looking for clues to identify them. VOA’s Greg Flakus has more from Waco, Texas.
Video

Video Ebola Robs Liberians of Chance to Say Good-Bye to Loved Ones

In Liberia, where Ebola has killed more than 1,500 people, authorities have worked hard to convince people to allow specialized burial teams to take away dead bodies. But these safety measures, while necessary, make it hard for people to say good bye to their loved ones. VOA's Anne Look reports on the tragedy from Liberia.
Video

Video Reconstruction? What Reconstruction? Life After War in Gaza

It’s been a month since Israel and the Palestinians agreed to a ceasefire to end 52 days of an air and tank war that left 60,000 homes in Gaza damaged or destroyed and 110,000 homeless. Sharon Behn reports that lack of reconstruction is leading to despair.
Video

Video US, Saudi Arabia and UAE Hit Islamic State's Oil Revenue

The United States, Saudi Arabia and the United Arab Emirates have bombed oil facilities operated by Islamic State militants in Syria. It was a truly collaborative effort, with the two Arab countries dropping the majority of the bombs. The 12 refineries targeted were estimated to generate as much as $2 million per day for the terrorist group. VOA Pentagon correspondent Carla Babb has the story.
Video

Video Russia's Food Sanctions Raise Price Worries, Hopes for Domestic Production

Russia retaliated against Western sanctions imposed for its actions in Ukraine by halting food imports from the West. The temporary import ban on food from Australia, the European Union, Norway and North America has Russian consumers concerned that they could face a sharp increase in food prices. But in an ironic twist, the restrictions aimed at the Kremlin have made Russia's domestic food producers hopeful this can boost their business. VOA's Daniel Schearf reports from Moscow.
Video

Video Washington to Pyongyang: 'Shut This Evil System Down'

U.S. Secretary of State John Kerry is calling on North Korea to shut down prison camps and other human rights abuses following a United Nations Commission of Inquiry into "widespread and systematic human rights violations." VOA State Department Correspondent Scott Stearns reports from the United Nations.
Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.

AppleAndroid

World Currencies

EUR
USD
0.7866
JPY
USD
109.25
GBP
USD
0.6139
CAD
USD
1.1120
INR
USD
61.428

Rates may not be current.