Al-Sisi’s new budget: Stealing from the poor to support the billionaires

The new fiscal year starts on July 1. This year’s new budget is far worse than that of the previous one. The parliament approved the government’s plan, which included some clauses that did not take into consideration the current economic difficulties the Egyptians are going through because of the coronavirus pandemic. On the contrary, it further increased their burdens. Shockingly, the plan contained other clauses designed to support billionaires.

The new budget showed a decrease in the government support of the citizens by a total of 18 per cent. Although tens of thousands of people lost their jobs because of the pandemic, an amount of only EGP 140.7 billion was allotted to their support compared to EGP 171.8 billion in the last fiscal year that ended on June 30, 2020.

A paper published by the Egyptian Initiative for Personal Rights (an Egyptian non-profit organisation) and entitled “Despite expected continuity of the pandemic, COVID-19 is missing in government fiscal plans” mentioned the almost non-existent response of the government to the unprecedented pandemic.

The paper explained that food subsidies were one of the most prominent categories upon which spending was cut as the amount allotted to that category was decreased by more than EGP 3.5 billion to become EGP 84.4 billion after it was originally EGP 89 billion in the past fiscal year. At the same time, the government added EGP 1 billion to the amount allotted to the support of the exporters to increase from EGP 6 billion in the past year to EGP 7 billion this fiscal year, whereas the Egyptians are suffering a state of extreme austerity according to the Central Agency for Public Mobilisation and Statistics’ study.

The organisation stated that government entities are getting the lion’s share by receiving up to 49 per cent of the government support, most of which will be used to pay off the government debts to the pension funds. These payments should have been put under loan repayment because they are used to repay some of the government’s debt and are not considered citizen support nor social expenditure. The organisation revealed also that more than EGP 18 billion of the support is directed to unknown government institutions, and the reasons for the support have not been announced.

The paper explained in detail the amount allotted by the government to the health sector, which is the first line of defence against the pandemic. That sector was allocated EGP 93.5 billion in the new fiscal year compared to EGP 73.1 billion in the past year, in contrast to the Minister of Finance, Mohamed Maait’s, promise before the parliament to raise spending on health to EGP 258 billion.

The organisation indicated in its paper that the budget allocations for health, regardless of corona pandemic, include EGP 3.33 billion for the Public Healthcare entity, in addition to some other objects of expenditure that are not detailed in the health allocations. Among those expenditures are increasing the allocations for health insurance and treatment at the state’s expense to amount collectively to EGP 10.6 billion, besides EGP 885 million for the support of comprehensive health insurance for those with limited means among social security pensioners. The paper commented that the total of the reported procedures amounts to only a quarter of the increase designated by the plan for the health sector, and it is anybody’s guess how the rest of the money is spent.

The paper pointed out that government expenditure on health has increased by about EGP 20 billion. Even though this increase is not enough to face the corona pandemic, the available data does not explain how three-quarters of that increase is spent, which makes it impossible to make sure that the money allotted to health is well spent, nor to monitor it.

Despite government assurances that the amounts allocated to health, education, and scientific research match their percentages set in the Egyptian constitution, the organisation said that the government is planning to increase the percentage of Gross National Product (GNP) spent on health from 1.19 to 1.37 per cent. This increase, however, is still less than half of the constitutional minimum for the public expenditure on health, which was stated in article 18 of the constitution as follows: “The state shall allocate a percentage of government spending to health equivalent to at least three per cent of Gross National Product (GNP), which shall gradually increase to comply with international standards.”

According to the organisation, this percentage is the third lowest percentage of spending on health in the past seven years.