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Tensions run high as Egypt trials bread rationing plan

Source : Al Arabiya with Agencies / 21 Mar 2013

Egypt ministers on Tuesday announced controversial plans to introduce a smart-card system that limits the amout of subsidized bread citizens can buy.

The government would start rationing “after two months,” Supply Minister Bassem Ouda told Reuters earlier this week.

Besides cutting subsidies, the severe economic crisis has forced the Islamist-led government to introduce rationing.

Tension is already high in Egypt with the shortage of fuel, and economists have warned that restrictions on bread sales could cause a “revolution of the hungry.”

Hundreds of bakers on Tuesday descended on Cairo to protest over the level of subsidy offered by the Egyptian government, which they say covers just two-thirds of the cost, according to Britain-based The Guardian. The case echoes the bread riots of 1977, as well as in 2008 when President Hosni Mubarak faced protests over shortages in supply.

"Rationing might reduce subsidy expenditure, but it will come at the price of increased social tension,"warned Moustapha Bassiouny, an economist at Egypt's Signet Institute told The Guardian.

Egypt's foreign reserves have more than halved since 2011. The IMF is refusing to fund Egypt a loan worth $4.8 billion until the country reduces its subsidies.


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