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Cablegate: Rising Anxiety About Price Increases

VZCZCXYZ0000
RR RUEHWEB

DE RUEHEG #0150 0291018
ZNR UUUUU ZZH
R 291018Z JAN 08
FM AMEMBASSY CAIRO
TO RUEHC/SECSTATE WASHDC 7996
INFO RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/USDOC WASHDC 0374

UNCLAS CAIRO 000150

SIPDIS

SENSITIVE
SIPDIS

STATE FOR NEA/ELA, NEA/RA
USAID FOR ANE/MEA MCCLOUD AND DUNN
TREASURY FOR MATHIASON AND CONNOLLY
COMMERCE FOR 4520/ITA/ANESA/OBERG

E.O. 12958: N/A
TAGS: ECON EFIN ELAB EG
SUBJECT: RISING ANXIETY ABOUT PRICE INCREASES

REF: A. 07 Cairo 2887 B. Cairo 0090

-------------------------------
Demonstrating Against Inflation
-------------------------------

1. (U) In one clear manifestation of rising popular anxiety about
price increases, large demonstrations were held recently in two Nile
Delta cities, protesting increased prices of basic commodities such
as bread, oil, beans and rice. On January 18, approximately 2000
protestors, including members of the Wafd party and the Kefaya
("Enough") movement, demonstrated in Tanta, reportedly protesting
price increases, as well as corruption, "inherited power" (a veiled
reference to Gamal Mubarak succeeding his father as president) and
state security practices. Demonstrators allegedly raised
anti-American banners and vowed to "never allow" the U.S. Ambassador
to set foot again in Tanta (Note: The Ambassador has visited Tanta
several times to attend the famous "moulid" festival held annually
in the city. End note).

2. (U) According to press reports, on January 20, nearly 5000
people demonstrated in Mahalla el Kubra, site of large-scale labor
demonstrations over the last several months (Ref A). Demonstrators
protested high prices, chanting slogans against President Mubarak,
his son Gamal, the government and security services. Various
opposition parties including the Wafd party, the Ghadd party, Labor
and Nasserite parties, as well as Kefaya, members of the Muslim
Brotherhood (MB) and the Aafaq Socialist Center reportedly
coordinated the demonstration. Initially, only some 300 people
began the demonstration, but Mahalla residents and some textiles
workers joined in, swelling the numbers to almost 5000, according to
press and blog reports.

3. (U) The Kefaya movement also held a January 18 demonstration in
front of Al Sayyeda Zainab mosque (in a poor neighborhood of Cairo).
January 18 was chosen to commemorate the so-called "bread intifada"
of January 18-19, 1977, when mass riots broke out in response to the
President Sadat's attempt to cut food subsidies. Kefaya
demonstrators reportedly protested the GOE's plans to replace
in-kind subsidies with targeted monetary subsidies. 70-year old
Kefaya leader Dr. Abdel Wahab El Messairy, his wife and other
activists were detained, but later released, allegedly dropped on a
remote roadside miles outside of Cairo.

-----------------------
Parliamentary Criticism
-----------------------

4. (U) Rising prices also prompted criticism of the Nazif
administration from parliament. On December 31, 2007, 70 MB and
opposition MPs called for a vote of no-confidence in Nazif's
government for failing to control prices. MPs demanded information
on government measures to control prices and alleviate poverty. On
January 15, MB and opposition MPs accused the government of
incompetence and bias toward the upper classes. MB members said
economic reforms have only benefited the rich and worsened poverty.
They decried the "marriage" of authority and wealth, a reference to
businessmen serving in the current government, which they claim has
increased corruption. Several MPs characterized the recent labor
strikes and demonstrations as a "revolution of the starving." MPs
pointed to the budget deficit and public debt as examples of the
government's incompetence, referring to a highly critical report on
the state budget submitted to parliament by the Central Auditing
Agency (Ref B).

-------
Comment
-------

5. (SBU) Historically, food prices are one of the few issues that
gets the infamously passive Egyptian citizenry out into the streets.
The government is keenly aware of the potential for widespread
discontent with rising prices to erupt into mass street protests.
The GOE will no doubt continue with an ongoing PR-effort asserting
that the government and ruling party are focused on "social justice"
and improving life for Egypt's poor. It is difficult to gauge
whether such a campaign will do much to quiet the concerns of
Egyptians feeling the squeeze of food prices.
JONES

© Scoop Media

 
 
 
 
 
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